Posted on 02/26/2009 8:19:28 AM PST by Halfmanhalfamazing
He grew up in Iowa during the Great Depression.
Human history actually contains a number of predictable cycles--predictable in terms of order-of-event, not necessarily exact time, because while one can predict that continually adding weight will eventually break the camel's back, there are too many variables to predict exactly which straw will do it.
True, I just get a little more cautious when it comes to theories on economic cycles because they can end up as a self-fulfilling prophecy in mass psychology. When you get into Shemitta, you will note an amazing attribute of the Yoveil no one has ever considered or predicted.
Yes, I might, but it might not contain all the info.
Kondratieff’s primary work, as has been noted here, was in agriculture economics, and that’s how I discovered him (because the Elliot Wave fans just keep calling it the “K-wave” or “long wave” or “supercycle” - they don’t usually attribute it by name to him, nor give his background).
Absent being able to scan books, I’d have to recommend you just google around a bit, using different spellings of his name. “Kondratieff” gets you quite the bit of background, then start using variants and see how far you get.
I’ve read some accounts of his work on ag economics and policy, and ag economic policy in the USSR is where a LOT of people went to their death in the USSR - Kondratieff wasn’t the first and certainly wasn’t the last to die on that hill. In fact, Stalin hated Kondratieff’s success in organizing productive ‘collectives’ - akin to what we had in the US as co-operatives, which were under local control but funded by the state for equipment and supplies, and that’s what led to his death.
Anyway, that’s how I happened upon him. He’s a pretty lucid guy, especially for a guy who wasn’t raised around farming.
Many gulags were in Siberia. He was sentenced in 1930, his sentence supposedly “reviewed” in 1938, and thereupon executed.
That’s the problem with those who want to apply the wave theories based on time and not parameters.
There are a lot of wave theorists who want to say “The K-wave is exactly 54.6 years long...” and they want to try to time the market.
I don’t view the K-wave in this manner. I look at his theory from the conditions in the economy, not the exact period of time between cycles. And in so doing, one sees the similarities in the works of Fisher, Minsky, Kondratieff, Schumpeter, et al. The wave adherents want a clock that chimes every “X” months or years, and in the months/week/day, you call your broker and move everything in or out of the markets.
I say that this is silly, and that while economics does move in cycles, it is the conditions, relative debt levels, economic structure, etc that build up and repeat - at whatever rate they choose - that bring on these conditions. The K-wave cycle might turn in 56 years - it might be 60, 70, 80, or whatever years. It is all affected, as you say, by the exogenous events - wars, politics, Fed interventions, etc. But these rarely disturb the larger overall economic pattern.
This is why so many economists get their prognostication wrong - they keep looking for this stuff to be deterministic to the second decimal point. It isn’t. It never will be. It is all we can do to notice and change large patterns - and the pattern this time was the amount of private sector debt relative to the GDP. It is always thus - when a society starts to live large on credit, ALL of the economists I’ve cited agree that at some point, the whole thing comes crashing down around our ears. It has to. The bubble of debt cannot be inflated forever - at some point, some people are so deeply in debt that they cannot service the debt and the “tower of debt” as Minsky called it, collapses. The amount of time could (and was) easily disturbed by Federal Reserve interventions.
For Kondratieff, this averaged out to re-occur about 60 years or three generations to accumulate at a level where it causes a collapse and a whole generation to then withdraw and become incessant savers. That’s all his cyclic theory really says.
Which makes it a socio-demographic observation; hence probably a sensible generalization. Take his wave, open the phase by the growth in average adult lifespan (sans correction for epidemics) and the delay we're seeing for when the average upper-middle class woman has her first child, and you might even see something interesting. A fifty year wave then might approach seventy or eighty.
Interesting ping.
“What Kondratieff discovered is well known by the Chinese and farmers/ranchers in the US. It is this: wealth does not last past the third generation.”
Thomas Stanley, author of “The Millionaire Next Door”, explains this concept THIS way:
The generation that earns capital respects it; that’s how they earned it. The next generation doesn’t have that respect for capital, but, at least grew up with their parent’s values as an example. The third generation? Twice removed from both respect of what it takes to earn that capital and a consistent parental influence/example of those values. IF the children of millionaires don’t blow all of their inheritance, THEIR children: will.
THIS is why 80% of millionaires in America are first generation millionaires. That was true in 1900; it’s true today.
The flip side is also true. Work hard and full time, dual parent, and you will not be poor.
In fact, the gov’ts own statistics show that the average household in the lowest quintile has 1 part time wage earner. ONE. PART-TIME. How does that family manage to stay in the lowest quintile? Easy. The gov’t subsidizes it. The only poor that STAY poor do so with gov’t asst.
Both the rich and the poor are very dynamic groups in America. (The rich are an ever changing group of families in the process of becoming rich and, a generation or two later, spending that wealth. The poor an ever changing group of people entering the work force and those in the work force moving up and out of poverty.) The left would not have you understand this. If these groups are dynamic, and they are, then the rich can’t be the enemy and the poor cannot be truly disadvantaged.
For later review.
We are heading for “winter”. My father talked of this a lot years ago.
Bookmark bump
Unfortunately, the majority of our citizenry likes the Socialist model right now. And those wielding power are setting themselves up to never lose it.
btt
Interesting read, especially possible scenarios going forward. Thanks for posting.
My last surviving grandmother (RIP 1991) was born in 1899. She used to tell me stories about going into town on the buckboard with horses, the times during WW1, the Purple Gang in Detroit, the roaring '20's, making booze in the bathtub and other amazing stories. My dad was born in 1930. My father-in-law (92 in January of this year) born in 1917 also has some amazing stories.
Who's counting? When was the last time a legitimate (biblical) jubilee year was observed? Does anyone know?
After 1929, it took 25 years to return to its 1929 peak, which iflation-adjusting would make a bit longer than 25 years. Then again surviving stocks in the 1930s paid not-too-bad dividends so that actual returns assuming dividen reinvestment prob meant "only" about a 15-year timeframe to earn back the losses.
Very interesting. Thanks for posting & for the ping. BTTT!
Pinging myself for later reading
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.