Long Cycles of Growth and Stagnation?

During the 1970s and 1980s, a revival of interest was experienced over the existence of long waves in economic life. Much of this renewed interest was motivated by the onset of economic stagnation after the postwar phase of rapid growth in the advanced capitalist countries. Debates over the existence of long waves were revitalized, while the seminal research undertaken by Kondratiev (1935) and Schumpeter (1939) were rehabilitated. Many long-wave theorists identified the dynamic of technological revolutions as the propulsion to the phase of upswing in these long waves in economic life. There is considerable evidence of the pervasive effect of these secular waves, especially when one considers the impact of railways in the nineteenth century or the profound changes engendered by “generic” technologies (information technology, biotechnology and new raw materials technology) over the past 20 years. It will be argued that these Schumpeterian waves of “creative destruction” tend to act as powerful countervailing forces to the inherent tendency toward stagnation under the conditions of oligopolistic competition.