As economic beings we are extremely ‘short-sighted’ by nature. We don’t fully appreciate the differences and interactions between the short-, medium- and long-term.
It was Burns & Mitchell (1946) who tried to measure the economic cycles. Today there are four broad classifications of business cycles as follows:
- Kitchin cycle (3 – 5 years) – The rate at which businesses build up their inventories
- Juglar cycle (7 – 11 years) – Related to Investment flows into Capital such as factories and other capital means of production
- Kuznets cycle (15 – 25 years) – Period between booms in corporate or governmental spending on large scale Infrastructure projects, such as rail, roads, etc.
- Kondratiev wave / cycle (45 – 60 years) – The ‘super-cycle’ referring to the phases of capitalism. Crises such as the Great Depression and the current Financial & Sovereign Debt driven contraction.
But the Information Age has undermined these cycles? Or only undermined our understanding of these cycles? That is the key distinction we need to draw.
Are there any longer-term term cycles, which are beginning to contract with advances in Technology.
The Dark Ages (lets say from the collapse of the Roman Empire) until the enlightenment lasted around 1,000 years. The Enlightenment (approximately 1650s) through to the First Industrial Revolution (from mid 1700’s to mid 1800s) lasted around 200 years. The Second Industrial Revolution (driven by electricity from around mid 1800s) lasted another 100 years.
The Third Industrial Revolution, or rather the Digital Revolution is the COMPUTER or DIGITAL AGE.
However, interesting this brief synopsis of economic history is, the actual relevant issue is recognising the length of the TRANSITION period between these ‘Leapfrog’ Technological advances.
We are not very good (yet) at recognising, never mind managing these tectonic shifts in the economic landscape.
Is this were we found ourselves today?
- End of the Industrial Revolution (larajla.com)
- We’re still going through the Industrial Revolution…Backwards! (asystemofrandomtangents.wordpress.com)
- Econ 210a: Spring 2012: U.C. Berkeley: The Industrial Revolution: February 15, 2012 (delong.typepad.com)
- Robert Allen: The British Industrial Revolution in Global Perspective (delong.typepad.com)
- The jobless digital revolution (japantimes.co.jp)