Resources and Reflections

From Foreign Policy Magazine an interesting look at the implications and historical contest of our current econ0mic situation;

“AS NIKOLAI KONDRATIEV SHIVERED before his executioners on a wintry Siberian morning in 1938, he could scarcely have imagined that, 71 years later, his name would be resurrected by a new generation of business theorists and management gurus seeking to understand the first Great Recession of the 21st century.

A prime mover behind Lenin’s 1921 New Economic Policy, which briefly rehabilitated capitalism in order to save a young Soviet Union from imminent collapse, Kondratiev was an intellectual insurgent in a time and place where heresy could get one killed. Kondratiev theorized that economic activity took place in long waves: 50- or 60-year periods of creativity and growth followed by briefer contractions, after which the cycle would begin anew.

So taken was Joseph Schumpeter, the Harvard University economist best known for coining the term “creative destruction,” with the idea of long waves that he named the concept for Kondratiev. Schumpeter’s view was that innovation tends to arrive in clumps: “discrete rushes which are separated from each other by spans of comparative quiet.” These bursts of creativity, he wrote, “periodically reshape the existing structure of industry by introducing new methods” of production, organization, and supply. As for the negative effects of depressions—unemployment, the loss of wealth, economic dislocation—they were just creative destruction at work.”

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