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Kondratieff cycles

  Long waves of economic development with a wave length of about 40-60 years. Shorter oscillations in the level of business activity may be superimposed upon such long waves but Kondratieff cycles imply fundamental qualitative transformations of economic systems rather than mere quantitative fluctuations. The figure illustrates both the sequence of Kondratieffs since the late eighteenth century (each wave is composed of growth (A) and a stagnation (B) phase) and the range of economic, social and political changes which are thought to accompany them. An assumption of long-wave interpretations of uneven development is that, under certain conditions — not least financial and those of economic organization, cooperation and competition (Dicken, 1998) — the dynamics of technical change and its spread through an economic geography is associated with the dynamics of the waves themselves.

Kondratieff waves are named after the Soviet economist N.D. Kondratieff (see, for example, Kondratieff, 1935) who worked during the 1920s on long-term fluctuations in economic activity. Empirical evidence for the existence of long waves is strongly disputed (e.g. Maddison, 1982, 1991) but interest lies in the hypotheses about and insights into the dynamics of capitalist development that have been generated by long-wave theorizing (Freeman et al., 1982) and in the two-way relationships between uneven development and the generation and geographical implications of long waves (Marshall, 1987; Allen and Massey, 1988; Hall and Preston, 1988; Kleinknecht et al., 1992).

Ernest Mandel (1980) strongly supports the existence of long waves. He argues that the four waves identified to the present represent segments of the overall history of capitalism that have definite distinguishing characteristics: (a) 1789-1848, the industrial and bourgeois revolutions and Napoleonic wars and the constitution of a world market for industrial goods; (b) 1848-93, free competition; (c) 1893-1940, imperialism, the rise of finance capital and the consequent inter-imperialist wars; and (d) 1940-?, late capitalism. For Mandel there are serious technical and economic difficulties facing a capitalist path out of the current decline, which began in the late 1960s after the long post-war boom and, as a result of such difficulties, some even more severe social and political problems.

Maddison (1982) accepts that \'major changes in growth momentum have occurred since 1820\'. He argues that these changes have given rise to \'phases of growth\' but suggests that their explanation is not to be found in \'systematic long waves, but in specific disturbances of an ad hoc character\'. Each of Maddison\'s phases (1870-1914 the liberal phase; 1920-38, the beggar-your-neighbour phase; 1950-73, the golden age; 1973-? the phase of blurred objectives) are characterized by quantitative and qualitative characteristics and the latest phase coincides its onset with the contemporary crisis described by long-wave theorists.

A common theme in the analysis of the causes of long waves is the generation and implications of technological change. Schumpeter (1939) and Mensch (1979) point to a bunching of innovations. This bunching, Schumpeter suggests, is stimulated by the leadership of pioneering entrepreneurs searching for ways of resuscitating rates of profit during a recession. The innovations create expansionary and transformative systemic effects but, eventually, they too are subject to falling rates of profit. Long waves are therefore distinguished by particular types of technological revolution. Thus the first four Kondratieff waves were associated, respectively, with major innovations in: (a) steampower, cotton and iron; (b) railways and iron and steel; (c) electricity, chemicals and automobiles; and (d) electronics, synthetics and petrochemicals. Speculation continues as to the basis of the fifth Kondratieff, with likely contenders being information technology and telecommunications and biotechnology. Freeman et al. (1982) point rather to the effects of the diffusion of innovations in stimulating change and, like Gordon et al. (1982, 1983), suggest that long waves reflect the social and institutional circumstances (what Gordon et al. call \'the social structure of accumulation\') in which technical change is stimulated and diffused as well as the particular characteristics of the technology itself. Certainly, long waves are thought to be associated with the transformation of other features of capitalist society (Knox and Agnew, 1994) such as regimes of accumulation (see economic geography). This approach to the uneven development of capitalism is similar to, but broader in scope than, that propounded by Dunford and Perrons (1983) who point to critical transformations in the labour process as an explanation of long waves.

Insofar as Kondratieffs are generated by systemic technical change, successive cycles imply quite different geographical conditions of existence for production and, in addition, the associated social, political and regulatory changes themselves present new geographical constraints and possibilities. The geographical implications of Kondratieffs, or rather the complex of changes that they represent, are profound and may be associated with the rise and fall of regions and places of production (see, for example, Hall, 1985; Massey, 1988).

There are broadly two schools of thought on the implications of Kondratieff cycles for geographically uneven development. Peter Hall (1985) adopts a technological-determinist position and argues that places are differentially endowed with respect to the development and growth of new technology, so that uneven development will and should result and that such differences should be intensified in policies for economic growth. By contrast, others (e.g. Freeman et al., 1982; Marshall, 1987; Massey 1988) argue that technical change is facilitative and that places may be adapted to such change. Marshall points out that new or high technology rarely represents a sudden or complete break with the past and that \'low\' technology may be modified by high technology via process innovations.

Little attention has been paid to the possibilities of geography being implicated in the generation of technical change (see Allen and Massey, 1988), despite the suggestion that peripheral regions are inherently less hidebound by fixed investment and are, therefore, more open to innovation (see, for example, Dodgshon, 1987). However, insofar as geography represents an integral part of the conditions of existence of productive activity, it seems likely that the geography of the generation of long waves is not reducible merely to local conditions of innovation but to contradictions and potentials in the geographical structure of economic development at particular places and points of time to which technical change and innovation may represent a positive response.

It is important to remember, however, that the application of long-wave theory to geographical change remains highly economistic and, indeed, speculative (see, e.g. Dawson, 1994, ch. 3). Avoidance of the catastrophic future in emerging from the fourth Kondratieff predicted by Mandel would depend upon political and social struggle and leadership rather than a resigned acceptance of the inevitability of economically determined and potentially damaging social, cultural and political change. (RL)

{img src=show_image.php?name=bkhumgeofig34.gif }

Kondratieff cycles A schematic representation of the major features associated with long-wave economic cycles (Knox and Agnew, 1989: adapted from Marshall, 1987)

References and Suggested Reading Allen, J. and Massey, D., eds, 1988: The economy in question. London and Newbury Park, CA: Sage. Dawson, A. 1994: A geography of European integration. London and New York: Belhaven Press. Dicken, P. 1998: Global shift: transforming the world economy, 3rd edn., ch. 5. London: Paul Chapman Publishing; Dodgshon, R.A. 1987: The European past: social evolution and spatial order. London: Macmillan; New York: St. Martin\'s Press. Dunford, M. and Perrons, D. 1983: The arena of capital, ch. 9. London and Basingstoke: Macmillan; New York: St. Martin\'s Press. Freeman, C., Clark, J. and Soete, L. 1982: Unemployment and technical innovation: a study of long waves and economic development. London: Francis Pinter; Westport, CT: Greenwood Press. Gordon, D.M., Edwards, R. and Reich, M. 1982: Segmented work, divided workers, ch. 2. Cambridge and New York: Cambridge University Press. Gordon, D.M., Weisskopf, T.E. and Bowles, S. 1983: Long swings and the non-reproductive cycle. American Economic Association, Papers and Proceedings vol. 73, no. 2, May: 152-7. Hall, P. 1985: The geography of the Fifth Kondratieff. In P. Hall and A. Markusen, eds, Silicon landscapes, ch. 1. Winchester, MA: Allen and Unwin; Hall, P. and Preston, P. 1988: The carrier wave: new information technology and the geography of innovation 1846-2003. London and Winchester, MA: Unwin Hyman. Kleinknecht, A., Mandel, E. and Wallerstein I. 1992: New findings in long wave research. London: Macmillan. Knox, P. and Agnew, J. 1994: The geography of the world-economy, 2nd edn. London and New York: Edward Arnold. Kondratieff, N. 1935: The long waves in economic life. Review of Economic Statistics 17: 105-15. Maddison, A. 1982: Phases of capitalist development, ch. 4. Oxford and New York: Oxford University Press. Maddison, A. 1991: Dynamic forces in capitalist development. Oxford: Oxford University Press; Mandel, E. 1980: Long waves of capitalist development. The Marxist interpretation. Cambridge: Cambridge University Press. Marshall, M. 1987: Long waves of regional development. London: Macmillan; New York: St. Martin\'s Press. Massey, D. 1988: What\'s happening to UK manufacturing? In J. Allen and D. Massey, eds, The economy in question, ch. 2. London and Newbury Park, CA: Sage. Mensch, G. 1979: Stalemate in technology. Innovations overcome the Depression. New York: Ballinger. Schumpeter, J.A. 1939: Business cycles: A theoretical, historical and statistical analysis of the capitalist process. New York: McGraw-Hill.



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