Re: Kondratieff.

To respond theoretically:
As far as my reading of Schumpeter goes, it appears that the driving
force of the cyclical alternation called business cycles, has to do with
capitalistic innovations carried out by 'new men' - each of the 'technological
revolutions' are a result of these entrepreneurial innovations whose search
for profit enables them to take risks against an uncertain environment. 
The realization of profits and the swarming of followers also explains
why innovations occur in clusters.  It is these clustered innovations
that come to be called a 'technological revolution' that defines the upswing
of the Kondratieff cycle.  The downswing is the dissemination of the
fruits of innovation to the wider society and is associated with rising
competition, and falling prices arsing out of imitators who produce more
of the same.... (the story is a little more detailed). The best example
of this is the great industrial depression (Vogelstein) of 1873-1896.

"Supply and new technology" as an explanation for business cycles appears somewhat reductive, they even suggest a non-existent exogeneity to the capitalist process. As Schumpeter was one of the few to appreciate so incisively, technology is not something that is external to capitalism as a dynamic, it is embedded in it and inseparable from it.   The key concept here is surely innovation which Schumpeter defines as basically a new way of doing something by the new men who have to set up new plant and equipment for the production process and who have to bid factors from their currently existing uses by offering higher rates of return.

The central point as well is the resistance from the environment.  Actually I would argue that it is this that is fundamental in Schumpeter's theory.  It is precisely because there is resistance from the environment that innovational profits act as the lure for the entrepreneurs in the pursuit of the new, and generate those peripeteia that Schumpeter was the first to anlayse with such historical depth.

Ganesh Trichur.

kenneth couesbouc wrote:

 Klaus,
        If you have read Schumpeter, you may remember
these curves (Business Cycles, p.213). And have
noticed that the coincidence of 1929 and 1987 is just
one year out, at the middle of the second stage of the
K-cycle. They place 2004 at the beginning of a new
longwave. However, by adding a Kuznets cycle, the
resulting calendar of growth(curve N°6) is a much
better representation of reality than was Schumpeter's
original(curve N°4). The "hard times" after WW2 are
shown, as are those for the coming seven years.
 The curves are there, since 1939, and their
predictions have turned out to be quite good. But most
people won't admit the existance of business cycles.
And those who do, seem incapable of explaining them.
Schumpeter, for example, seeks their causes in supply
and new technology. While carefully avoiding the
question of the precise duratuions of the various
cycles. I am personally convinced that growth cycles
are caused by demand and debt. I would welcome a
debate on this subject.
          Regards, Kenneth

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