Abstract
Since the end of the expansionary period after the Second War, the world economy went through a long period of mediocre growth with a major recession in 2009 and another in 2020. This period is examined following As Time Goes By, the last contribution by Chris Freeman, with the cooperation of this co-author. As a long period of readjustment after the beginning of a structural crisis is imposed by the mismatch between the capabilities of the emerging techno-economic paradigm and the socio-institutional framework, my argument is that the duration of this transition is explained by the difficult process of replacing a successful institutional setting, that which supported the post-War expansion, by the new accumulation regime that is being constituted. Instead of most of the literature on long waves, which tries to uncover some mechanics of succession of radical technological innovations, this paper addresses different questions: how does the socio-institutional adaptation proceed, and how relevant is this process to explain the length of the downswing since the turning point of the 1970s. In order to investigate such process of readjustment, the conditions for the new rule of financial accumulation are discussed, including the forms and duration of the process of selection, reproduction, and education of the elite, and changes in institutions, norms, and social networks.
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Notes
The computation is: (P/KNt-1)*100, in which P is the non-financial corporate profit, computed at current cost with inventory valuation and capital consumption adjustment; KN, stock of net fixed capital, including equipment and structures. The variables are obtained in real terms (Lapavitsas and Mendieta-Muñoz 2016).
A reviewer pointed out that the accountability of days lost on strike is but a poor representation for social conflict. This is right, mostly for some of the periods under consideration and given other historical constraints. Social unrest is also expressed under other forms, although not easily measurable, and that is the reason to use this limited proxy.
The eight were Deng Xiaoping, Wang Zhen, Chen Yun, Li Xiannian, Peng Zhen, Song Renqiong, Yang Shangkun, and Bo Yibo.
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Acknowledgements
I thank Michael Ash for a careful revision, as well as three anonymous referees for their comments and suggestions. The usual disclaimer applies.
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The author acknowledge financial Support from FCT – Fundação para a Ciência e Tecnologia (Portugal), through research grant UIDB/05069/2020.
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Louçã, F. As time went by - why is the long wave so long?. J Evol Econ 31, 749–771 (2021). https://doi.org/10.1007/s00191-021-00724-9
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DOI: https://doi.org/10.1007/s00191-021-00724-9