{Kondratieff Cycles [continued]}[26th October 1989]

[Redbook6:332][19891026:1125b]{Kondratieff Cycles [continued]}[26th October 1989]

19891026.1125

[continued]

(On these pages,* I am ignoring the J[uglar]** cycle after 1929 because it is officially non-existent, and before 1857 because it is (incomplete and) so peculiar that I wonder whether (eg) a C has been missed in 1852? But a lead*** is not impossible….

I am also querying the 1940 final K-cycle date because of the War – substituting c1950. But the War may be part of the pattern….)

*[Probably, [Redbook6:330-331][19891025:0931f]{Economic Cycles [continued (6)]}[25th October 1989]ff, to this entry]

**[[Redbook6:329-332][19891025:0931b]{Economic Cycles}[25th October 1989]ff]

***[Presumably, as in lead & lag]

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{Kondratieff Cycles}[26th October 1989]

[Redbook6:332][19891026:1125]{Kondratieff Cycles}[26th October 1989]

19891026.1125

Per E[ncyclopaedia] B[ritannica] 17:969

	Yrs					Actual Yr		Actual Degree	Regular Cycle 64-year C & M~		Yr Diff C/M~ – actual
							(Top)		C	1728		U~
		(	-1792	Contraction	-1792		Bottom	C	A~	1760	-32	late
					{1780s	per	Hobsbawm}*
/	23	1.	1792-1850	Expansion	1792-1815*	1815	Top (Crisis)	(M~)/U~	C	1792	-23	A~
58					{1840s}*
\	35			Contraction	1815-1850	1850	Bottom	R~/(C)	{A~}	1824	-26
					{1840s-1885}*
/	23	2.		Expansion	1850-1873	1873	Top (Crisis)	M~/(U~)	{C}	1856	-17	J~
46					{1855-c1897}*
\	23			Contraction	1873-1896	1896	Bottom	J~	{A~}	1888	-8
/	24	3.		Expansion	1896-1920	1920	Top (Crisis)	C	C	1920	0	G~
44
\	20			Contraction	1920-1940	1940	Bottom	M~/U~	{A~}	1952	+12
				{Expansion:	1940-c1987ff?}	*	**(‘Peaking’ is a		C	1984		R~
							gradual process)
				{Contraction:	1987ff}*				{A~}	2016
									C	2048		C~

*Amendments from:#

cf Stonier & Hague, A Textbook of Economic Theory, Ch275.7, ‘Schumpeter & Creative Destruction’ <901125>

+ Hobsbawm, ‘Industry & Empire’, p313 (Conclusion).

**<910203>

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{Economic Cycles [continued (6)]}[25th October 1989]

[Redbook6:331-332][19891025:0931g]{Economic Cycles [continued (6)]}[25th October 1989]

19891025.0931

[continued]

Rising prices, therefore, may seem good for business but they suggest the J~ point of accumulation and the inevitability of crisis: stability has already passed away. If falling prices are simply the inevitable consequence of rising prices and C, their occurrence at and around M~ need not seem so odd: in a stable situation, they would not occur there, and S~ - M~ (-U~?) would probably be simply organisation and outward action. (Presumably, a stable economic cycle, although outer circle, would be inspired by the inner circle – how, I am not sure.)

[Text extracted from ms image reproduced above:]

					C
					CRISIS
					|
	(BOOM)		R~	Rising		Falling	S~		(BUST)
				prices		prices
“Prosperity”		G~	–		☼		–	M~	RECESSION	“Liquidation”
	UPTURN
				Employment		Unemployment
			J~		|		U~
					←
					DEPRESSION
					A~

This is not all that convincing.

Curiously, this pattern or fit almost identifies the real interests of business with those of ‘basic’ Individuals* – but not quite.

The key is perhaps in appreciation that when business seems to be doing best – in the boom time ?G~ - R~ – it is in fact already fragmented and overheated beyond repair.

Clearly much more work is required to get this right.

*[See last previous entry]

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{Economic Cycles [continued (5)]}[25th October 1989]

[Redbook6:330-331][19891025:0931f]{Economic Cycles [continued (5)]}[25th October 1989]

19891025.0931

[continued]

What is much more* interesting is why the economic cycle ‘crisis’ and the Crisis at C should be roughly aligned (allowing for the lagging between 64-year C points).**

The implication is that Business [sic][,] and people (as consumers)[,] take opposite views[:] ie that the falling prices which occur after (delayed) C (leading from Crisis into Depression) are bad for business but fundamentally good for the material welfare of Individuals (ie people living simply off the land and generating new activity at the lowest level); whereas the rising prices which characterise a business ‘upturn’, at least after the initial stages, are initially good for business (if sale prices, not costs) but bad for individuals – and, eventually, for the whole economy. 

The fact that it doesn’t turn out like this – that falling prices tend to bring hard times for individuals – is because we do not live in a subsistence economy: we are all ‘in business’ to the extent that we are employed, or self-employed off the land, or require money. A self-sufficient smallholder, requiring money only for luxuries, and savings, will benefit from falling prices if he can reinvest his savings, or at least care little about them.

*[See last previous entry]

[& last previous entry but two, [Redbook6:329][19891025:0931c]{Economic Cycles [continued]}[25th October 1989]]

**I appreciate that much work must have been done by economists on this already.)

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{Economic Cycles [continued (4)]}[25th October 1989]

[Redbook6:330][19891025:0931e]{Economic Cycles [continued (4)]}[25th October 1989]

19891025.0931

[continued]

If the pattern* of lagging most at J~ and least at C~ is repeated on a larger scale – eg 8 x 64 = 512 years, and perhaps even larger – as seems indicated by the (very small) sample we have above* – then the current Stock Marker jitters (1987 and this month) are roughly where one would expect (ie shortly after C in 1984); they may get worse before they get better (ie towards S~ in 1992);** and a stronger crisis may be expected on or after the 2048 year C – in 2048ce. But

(a) knowledge of (or belief in) such cycles may help reduce their impact (or bring them about); and in any case,

[(b)] the cycle is speculative and imprecise.

*[See last previous entry but three, [Redbook6:329-332][19891025:0931b]{Economic Cycles}[25th October 1989]]

**(cf book: ‘The Great Depression of 1990’ (ref Vol … [[Redbook5:96-98][19880319:1910]{Type Cycles}[19th March 1988]] above)

[The writer’s final and published conclusion in the mid 1990s was: “Although the major depressions of the 19th Century have faded from popular consciousness, there are still enough people alive today who remember the Great Depression of the 1930s, or at least the effect it had on their parents, for the protracted slump of the late 1980s and early 1990s to have given rise to uneasy comparisons. But although, for the reasons given earlier, the cycle pattern is not likely to be as regular in economics as it is in politics, it has to be said that the cycle or spin diagrams show the main slump of any cycle generally occurring nearer the *M degree than 1988, sometimes after *M: even if preceded by smaller-scale shocks. Despite the nearness of the very-long-cycles Crisis at 2048, I am prepared to state that, other things being equal (e.g. no war, no Keynesian counter-cyclical policies), I would be very surprised (and very, very pleased) if Europe were to begin real recovery from the present long depression before about 2008ce. The recovery could start later. I would not be surprised if the World economy were to suffer another economic shake-out and slump, more serious than anything we have seen during this cycle, before real long-term recovery begins. The most likely period for such a slump, other things being equal, would be around the year 2000ce. The later the slump, the later the recovery. I base these suggestions on examination of the economics of the four previous 64-year cycles during the Industrial Revolution.”]

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