WHAT WOULD KONDRATIEFF DO?

Navigating the craziest long cycle in history

Post-1945 K-Wave?

Post-1945 K-Wave?Korotayev & Tsirel, 2010

tech innovation

new modeof accumulation

“Each new cycle takes place under new concrete-

historical conditions, at a new level in the

development of the productive forces, and hence

is by no means a simple repetition of the preceding

cycle.”(1926)

Long cycle (inflection point)

TECH INNOVATION

- BROAD APPLICATION OF NEW TECH- “REORGANISATION” OF PRODUCTION

EXPANSION OF GLOBAL MARKET

EXPANSION OF MONEY SUPPLY

Long cycle (causation)

CAPITAL ACCUMULATESFASTER THAN INVESTMENT(GETS LOCKED IN FINANCIAL SYSTEM)

SEARCH FOR NEWTECHNOLOGY

SEARCH FOR NEW MARKETS

SEARCH FOR CHEAP MONEY

CAPITAL FLOWS INTOPRODUCTIVE NEW BUSINESSES

Prolonged, disrupted wave

1948-2008

NEW TECHDEPLOYMENTCYCLE

CHINA ENTERSWORLDMARKET

Disruption: fiat money

FinancialisationUS financial profits as % of domestic profits

Wave 5.0

• the network• information goods• financialisation• non-hierarchy• eco-determined

market

What kind of captialism is that?

Romer (1990)

Information goods destroy price formation mechanism based on scarcity

High information content to

physical goods

Corporate responses

Monopolise & own information: Apple Big Pharma CFM (Turbofan Consortium)

Global jet engine market

CFM = alliance of GE + SNECMA; EA = GE + P&W

iTunes vs CDs

Corporate responses

“Skate on the edge of chaos” Between falling prices/ expanding

demand Primark (Associated British Foods)

Corporate responses

Non-market production Wikipedia

350m users per month

Smartphone O/S market

Q2 2013

AndroidiOSWindowsBlackberryOthers

Android is an open source system

The key contradiction in modern capitalism is between this emerging possibility of free, socially produced abundant goods, and a system of monopolies, banks and governments forced to behave desperately to maintain “information asymmetry”.

That is, everything is pervaded by a fight between network and hierarchy.

World GDP Growth Rate

Wages/GDP (1948-2011)

US Real income 99% vs 1%

Gartner 2013

“By 2020, the labor reduction effect of digitization will cause social unrest and a quest for new economic models in several mature economies.

“Near Term Flag: A larger scale version of an "Occupy Wall Street"-type movement will begin by the end of 2014, indicating that social unrest will start to foster political debate.”

http://www.gartner.com/newsroom/id/2603215

What would Nikolai expect? Pent up productivity gains

From delayed tech upswing Wages drag on growth The collaborative eats the

commercial But not everywhere

Medicine, human services and materials Market forces penetrate personal life

De-financialisation?

@paulmasonnews