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2016 | Buch

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Economic Cycles, Crises, and the Global Periphery

verfasst von: Leonid Grinin, Andrey Korotayev, Arno Tausch

Verlag: Springer International Publishing

Buchreihe : International Perspectives on Social Policy, Administration, and Practice

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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This thought-provoking monograph analyzes long- medium- and short-term global cycles of prosperity, recession, and depression, plotting them against centuries of important world events. Major research on economic and political cycles is integrated to clarify evolving relationships between the global center and its periphery as well as current worldwide economic upheavals and potential future developments. Central to this survey are successive waves of industrial and, later, technological and cybernetic progress, leading to the current era of globalization and the changes of the roles of both Western powers and former minors players, however that will lead to the formation of the world order without a hegemon. Additionally, the authors predict what they term the Great Convergence, the lessening of inequities between the global core and the rest of the world, including the wealth gap between First and Third World nations.

Among the topics in this ambitious volume:

· Why politics is often omitted from economic analysis.

· Why economic cycles are crucial to understanding the modern geopolitical landscape.

· How the aging of the developed world will affect world technological and economic future.<

· The evolving technological forecast for Global North and South.

· Where the U.S. is likely to stand on the future world stage.

Economic Cycles, Crises, and the Global Periphery will inspire discussion and debate among sociologists, global economists, demographers, global historians, and futurologists. This expert knowledge is necessary for further research, proactive response, and preparedness for a new age of sociopolitical change.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction. Cyclical and World-Systemic Aspects of Economic Reality with Respect to Contemporary Crisis

Abstract

This chapter introduces the whole monograph, which is devoted to the analysis of economic cycles of different length and their manifestation in the core and periphery of World System in different periods as well as forecasts on this base of future transformations of technologies, political and social-economics relations. The first chapter analyzes the emergence of modern economic cycles. Though cyclical dynamics was noticed a long time ago the cyclical nature of modern economic development was, for a long time, not traced because it was indiscernibly weak and irregular.

This is no accident because the cyclical effect in modern economy only appears in a really clear way with the advent of regular extended reproduction (first, in the financial and trade sector, and then in the manufacturing). It is no coincidence that the first clear manifestations of the long-wave processes of economic dynamics coincided with the industrial revolution, namely the 1780s. We can assume that the transition to machine industry created the phenomenon of Kondratieff waves (or K-waves) in the economy (or allowed at least the ability to see them clearly). The reason for this statement is seen in the fact that during this period the productive forces began to acquire a new fundamental characteristic—a “desire” for steady and continuous expansion. We demonstrate a deep genetic connection between middle and long economic cycles. In result of the final phase of Industrial revolution the first typical cyclical crisis of the Juglar type engulfed the entire British economy and to some extent economies of many other countries in 1825.

The chapter provides a short history of economic crises of the eighteenth and early nineteenth centuries. It also offers preliminary definitions and descriptions of various economic cycles (long Kondratieff cycles or waves, middle-large Kuznets swings; middle Juglar cycle or “business cycle”; short Kitchin cycles; Akamatsu waves duration from 20 to 60 years), the history of their study, various elucidations of their causes, as well as a preliminary explanation why the global crisis of 2008–2009 was so strong.

The second part of the chapter tells about this book and its structure, which consists of six chapters and two appendices.

Leonid Grinin, Andrey Korotayev, Arno Tausch

Chapter 2. Kondratieff Waves in the World System Perspective

Abstract

This chapter analyzes long economic cycles (or waves) known as “Kondratieff waves” (or “K-waves”). It is shown that the analysis of them allows us to understand long-term world-system dynamics, to develop forecasts, to explain crises of the past, as well as the current global economic crisis. This chapter offers a sketch of the history of research on K-waves; it analyzes the nature of Kondratieff waves. It offers a historical and theoretical analysis of K-wave dynamics in the World System framework; and in particular, it studies the influence of the long wave dynamics on the changes of the world GDP growth rates during the last two centuries.

Kondratieff cycles are repeated fluctuations of important economic variables with a characteristic period of about 40–60 years, within which at one phase (upswing) growth rates of indicators tend to accelerate, and at the other phase (downswing) they tend to slow down. Thus different dynamics of varies trends is observed at upswing and downswing phases. For example, breakthrough technological inventions tend to be made during downswings, whereas their wide implementation is observed during subsequent upswings. The diffusion of those innovations throughout the World System is bound to affect significantly the course of K-waves, as the opening of new zones of economic development is capable of changing the world dynamics as a whole.

K-waves are considered as one of the most important components of the World System dynamics. What is the correlation between structural changes of the World System and periodic fluctuations within the K-wave dynamics? Authors suggest that during the K-wave downswings the Core tended to subjugate, integrate, and pull up the Periphery to a greater extent than what was observed during the K-wave upswings. It is during the K-wave downswings that the Core tended to expand vigorously (in various way) to the Periphery by investing resources into it and by actively modernizing it. Those efforts and resource flows made a rather important contribution in the slow-down of the Core growth rates. In contrast, during K-wave upswings the Core’s activities were concentrated within the core part of the World System; in the meantime the balance of resource movement turned out to be in favor of the Core. Such a situation led to the acceleration of the growth rates of the Core countries (As reader will see in Chap. 4 , this approach in some respect correlates with Akamatsu’s theory). However, this regularity changed at the upswing phase of the Fifth K-wave as during this period the main economic growth was generated not by the Core, but rather by the Periphery whose strongest countries moved to the Semiperiphery and even became new centers of growth. This tendency is also continuing at the downswing phase of the current Fifth K-wave.

Leonid Grinin, Andrey Korotayev, Arno Tausch

Chapter 3. Interaction between Kondratieff Waves and Juglar Cycles

Abstract

In this chapter the authors describe Juglar cycles, provide a brief history of their study, and then concentrate on aspects of the relationship between the medium-term (7–11 years) Juglar cycles (J-cycles) and long (40–60 years) Kondratieff cycles (K-waves). Such an approach can greatly clarify the causes of alternation of upward and downward phases within the Kondratieff waves, and the reasons for the relative stability of the length of these waves. They proceed from the fact that long-term processes must have appropriate causes. For K-waves such causes are rooted in the very nature of the expanded reproduction of the economy, but less long pulses (associated with alternating J-cycles) streamline periodicity. J-cycles are the only real factor that can set the rhythm of Kondratieff waves and their phases.

The point is that adjacent 2–4 medium cycles form a system that affects dynamics of economic trend. The latter can be an upswing (active) or a downswing (depressive). The mechanisms of formation of such medium-term trends and changing tendencies are explained in this chapter. The presence of such clusters of medium cycles (general duration of which is 20–30 years) determines to a large degree the long-wave dynamics and its timing characteristics. It also can provide certain means for forecasting, and the respective chapter contains such forecasts.

This chapter provides a verbal model of Kondratieff waves, based on the close relationship between the medium-term (7–11 years) Juglar cycles and K-waves as well as on idea that the relative duration and regularity of change of K-wave phases is determined by the nature of nearby chains or clusters of J-cycles.

A chain-cluster of J-cycles with less pronounced depressions, and more durable pronounced expansions is denoted as “A-cluster”, whereas a chain-cluster of J-cycles with more pronounced depressions and less intense and less prolonged expansions is denoted as “B-cluster”. During the K-wave A-phase the fast economic expansion leads inevitably to the necessity of societal change; as a result, B-phase starts. But the possibilities of societal transformation lag behind the demands of the economy, that is why periods of such a restructuring correspond to periods of more difficult development, that is, to K-wave downswings.

The model proposed in this chapter suggests that one can observe an evident negative feedback between the K-wave trends, which strengthens with each new medium-term cycle (until the trend does not change), since the nature and results of each J-cycle is a signal for a particular type of action of active participants in the process (from individual entrepreneurs to governments and supranational organizations). The model also shows that for an adequate understanding of the nature of Kondratieff waves it is necessary to consider their effect firstly at the World System level.

The authors also focus on how and why the main K-wave dynamics indicators change. Starting from the Great Depression the economic growth became one of the main concerns of the state. However the price upswings and downswings have not vanished completely; indeed, the recent deflation trend demonstrates this quite convincingly.

Leonid Grinin, Andrey Korotayev, Arno Tausch

Chapter 4. From Kondratieff Cycles to Akamatsu Waves? A New Center-Periphery Perspective on Long Cycles

Abstract

This chapter highlights “dual” or even “triple” structure of cycles—global ups and downs, national ups and downs, and ups and downs in the relative position of countries in the global economy. We study the relationship between the cycles of convergence of the economies of the World System with the overall economic fluctuations. The chapter tries to link the issue of long cycles with the issue of economic convergence and divergence in the World System.

The chapter presents the thought of the Japanese economist Kaname Akamatsu. In 1937 he discovered specific links between the rise and decline of the global peripheries to the larger Kondratieff cycle. Now this type of swing is known as Akamatsu waves. They are cycles (with a period ranging from 20 to 60 years) connected with convergence and divergence of core and periphery of the World System and explaining cyclical upward and downward swings (at global and national levels) in the movements of the periphery countries to catch up with the richer ones.

We present Akamatsu’s theory, and the links between his “flying geese” (Gankō Keitairon) model and Kondratieff’s ideas. Akamatsu’s original new contribution to the Kondratieff cycle debate is his analysis of the “differentiation” of the world economy. The rising A-phase of the global Kondratieff cycle will be a period of differentiation in the world economic structure, while the B-phase of the cycle coincide with a process of “uniformization” in the world economic structure. For Akamatsu, the characteristic structure of the Center-Periphery relationship is characterized by the fact that the underdeveloped nation will export primary products and will import industrial goods for consumption. Later on, an underdeveloped nation will attempt to produce goods which were hitherto imported, first in the field of consumer goods, and later on in the area of capital goods. As the fourth stage of the process, the underdeveloped nation will attempt to export capital goods.

Chapter 4 compares these theoretical advances with the analyses put forward by Arrighi et al. Arrighi and associates correctly foresaw that the zones of prosperity in the world economy not only cluster in time, but also in space. The innovation process will be highly unequal. High incomes create a favorable environment for product innovations; high costs create a favorable environment for innovations in techniques; and cheap and abundant credit creates a favorable environment for financing these and all other kinds of innovations. There tended to be a “virtuous circle” of high incomes and innovations in the wealthy countries as opposed to the tendency in the poorer countries to reap few, if any, of the benefits of the innovations. However, in the recent decades, after the start of the Great Convergence, the situation has changed dramatically. We also highlight the relationship of the Barro “economic disaster cycle” and the Kondratieff cycle. In this Chapter, as well as in Appendix B, we not only analyze cycles, but also long-run trends, with a turning point for many countries taking place in the present decade. Much more ill-fated is the trajectory of the European center and the European semi-periphery. Their upward ascent definitely came to a halt, implying a very long-run shift in the socio-geographical structure of the world economy.

Leonid Grinin, Andrey Korotayev, Arno Tausch

Chapter 5. Kondratieff Waves and Technological Revolutions

Abstract

In this chapter we reveal the interrelation between K-waves and major technological breakthroughs in history (such as the Industrial Revolution) and make forecasts about features of the sixth Kondratieff wave in the light of the theory of Cybernetic Revolution that, from our point of view, started in the 1950s and will be completed in the 2060s or 2070s.

Basing of the theory of production principles and production revolutions we have established a close correlation between Industrial and Scientific-Cybernetic production principles’ cycles and Kondratieff cycles. Given that each new K-wave does not just repeat the wave motion, but is based on a new technological system, K-waves in a certain aspect can be treated as phases of the development of the Industrial production principle and the first phases of development of the Scientific-Cybernetic production principle.

There is a special section that demonstrates specific features of the Fourth and Fifth K-waves and their phases. It explains on the basis of the theory of production revolutions why the Fourth wave was so powerful and why there is no comparably strong technological breakthrough during the Fifth K-wave. The theory of production revolution also can explain the contemporary phenomenon when periphery of the World System develops faster than its core.

We assume that the sixth K-wave in the 2030s and 2040s will merge with the final phase of the Cybernetic Revolution (which we call a phase of self-regulating systems). This period will be characterized by the breakthrough in medical technologies which will be capable of combining a number of other technologies into a single system of new and innovative technologies. The chapter offers some forecasts concerning the development of these technologies. The drivers of the final phase of the Cybernetic Revolution will be medical technologies, bio and nanotechnologies, robotics, IT, cognitive sciences, and additive manufacturing (3D printers), which will together form a sophisticated system of self-regulating production. Thus, we suppose that medical technologies will be a sphere of the initial technological breakthrough and the emergence of the technology complex. We assume that the Cybernetic Revolution will start first in a certain area. Given the general vector of scientific achievements and technological development and taking into account that a future breakthrough area should be highly commercially attractive and have a wide market, we forecast that the final phase of this revolution (the phase of self-regulating systems) will begin somewhere at the intersection of medical technologies and many other technologies connected with them.

Certainly, it is almost impossible to forecast the concrete course of innovations. However, the general vector of breakthrough can be defined as a rapid growth of opportunities for correction or even modification of the human biological nature. In other words, it will be possible to extend our opportunities to alter a human body, perhaps, to some extent, its genome; to use extensively means of cultivating separate biological materials, bodies or their parts and elements for regeneration and rehabilitation of an organism, and also artificial analogues of biological material (bodies, receptors), etc. This will make it possible to radically expand the opportunities to prolong the life and improve its biological quality.

Leonid Grinin, Andrey Korotayev, Arno Tausch

Chapter 6. Afterword: New Kondratieff Wave and Forthcoming Global Social Transformation

Abstract

This final chapter in many respects continues the subject which has been analyzed in Chap. 5 . It analyzes some aspects of the population ageing and its important consequences for particular societies and the whole world with respect to the new (sixth) K-wave and its forthcoming technologies. Population ageing is important for both the World System core and many countries of the global periphery and it has turned into a global issue. In the forthcoming decades population ageing is likely to become one of the most important social processes determining the future characteristics of society and the direction of technological development.

Based on this analysis and the conclusion (in Chap. 5 ) that the future technological breakthrough (which we define as the final phase of the Cybernetic Revolution) is likely to take place in the 2030s, we offer some important forecasts.

The main conclusion of the chapter is that the process of global ageing will be both one of the main reasons and one of the main driving forces for the formation of a new technological paradigm of the Sixth K-wave as well as the final phase of the Cybernetic revolution. That is why all those revolutionary technological changes will be connected, first of all, with breakthroughs in medical and related technologies, and the first direction of this new innovative breakthrough will be medical technologies.

So, by the 2030s, the number of middle-aged and elderly people will increase; the economy will desperately need additional labor resources while the state will be interested in increasing the working ability of elderly people, as the population of wealthy and educated people will grow in a rather significant way. In other words, the unique conditions, including enormous financial resources, for the stimulation of business, science and the state to make a breakthrough in the field of medical technologies will emerge, and just these unique conditions are necessary to start the innovative phase of a revolution.

To decide the problem of supplying means of subsistence and social services for a growing number of ageing pensioners, the world needs a new system of financial-economic regulation at the global scale. However, such a global regulation cannot emerge from nowhere. It can be realized only in the fight against the crisis-depressive phenomena, and as a result of the reconfiguration of the World System. In the chapter we draw the picture of future changes of the world order.

We also present our ideas about the financial instruments that can help to solve the problem of pension provision for the growing elderly population in the developed countries. We think that a more purposeful use of pension funds’ assets together with their allocation (with necessary guarantees) into education and upgrade of the skills of young people in the World System periphery may partially solve the indicated problem in the developed states.

The chapter offers some forecasts concerning the development of these technologies and its social consequences. One of our forecasts concerns the future of long cycles. We predict that the sixth K-wave (c. 2020—the 2060/2070s) will be the last ‘normal’ Kondratieff wave. The seventh K-wave will be feebly expressed or will not occur at all. So, K-waves appeared at a certain stage of social evolution and they are likely to disappear at its certain stage.

Leonid Grinin, Andrey Korotayev, Arno Tausch

Backmatter

Titel: Economic Cycles, Crises, and the Global Periphery
verfasst von: Leonid Grinin
Andrey Korotayev
Arno Tausch
Verlag: Springer International Publishing
Electronic ISBN: 978-3-319-41262-7
Print ISBN: 978-3-319-41260-3
DOI: https://doi.org/10.1007/978-3-319-41262-7

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Über dieses Buch

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction. Cyclical and World-Systemic Aspects of Economic Reality with Respect to Contemporary Crisis

Chapter 2. Kondratieff Waves in the World System Perspective

Chapter 3. Interaction between Kondratieff Waves and Juglar Cycles

Chapter 4. From Kondratieff Cycles to Akamatsu Waves? A New Center-Periphery Perspective on Long Cycles

Chapter 5. Kondratieff Waves and Technological Revolutions

Chapter 6. Afterword: New Kondratieff Wave and Forthcoming Global Social Transformation

Backmatter

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