{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.)

[continues]

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