[PEN-L:4617] Re: The post-WW2 long wave (was: Kondratiev waves)

[dassbach@xxxxxxx (Carl H.A. Dassbach)]

Trond writes:

>My main research activity from 1989 to 1992 was electric vehicles. I
>headed a project group which built a demonstration "hybrid" natural
>gas/electric vehicle. I know this field fairly well. The _only_
>important obstacle against the auto industry moving from combustion
>engine to electric propulsion is the lack of a high energy and high
>power battery. My prediction (based on several different and promising
>technologies being tested out now) is that this problem will be solved
>fairly soon, and that different working full-scale prototypes will be
>demonstrated within - say - 5 years. The emergence of such batteries
>will mean an industrial earthquake, since the auto industry is so big,
>and since electric propulsion will imply a change of technology and
>products in a lot of other industries.
>
>Now, this enables an interesting test of Schumpeter-like theory.  It
>will then predict an economic long-range upswing due to the wave of new
>technologies which will be associated with the world-wide transition to
>electric propulsion.
>
>The polarization theory, however, predicts no such upswing due to the
>introduction of electric propulsion per se, but requires some sort of
>reduction of fragility and debt burdens before the upswing can start.
>
>But one may argue for a sort of "unification" of Schumpeterian and
>polarization theory, if general optimism engendered by such new
>industrial possibilities results in lower interest rates and a
>willingness to cancel or reduce debt burdens.
>

I think that you missed one of my points and I was not completely clear on
another.

Your example of electric propulsion is interesting but again, you tend to
equate innovation with new technology and its commercialization.  In my
opinion (and based on my reading of Schumpeter), this is much too narrow a
view of innovation, especially those which propel an A or expansionary phase
of a long wave.  While the commercialization of new technologies may be ONE
force, it is not the only force.  In other words, innovations can take a
variety of forms, e.g., `new combinations' in finance, marketing, or
distribution, in addition to pure `technological' innovations.  This
equation of  Schumpeter's view of long waves to a  "discontinuity of
technical invention/innovation" model is the main problem (and weakness) of
the Neo-Schumpterians such as Mensch and co.  Innovation must be understood
in a much broader sense - let me also add (and this is another misreading of
Schumpeter theory resulting from commentators reading reviews and second
hand accounts instead of reading BUSINESS CYCLES)  that innovation per se is
not what is important for Schumpeter - instead what is important is the
CONSEQUENCES of innovations,  new companies, new factories, and the rise to
prominence of new men.

Hence,  it is quite possible that your model of reducing debt burden may, in
fact, be part of the next upswing if, we (the world) are ready to make that
INNOVATION.  The important point here is not the nature of innovations,
these vary historically, but rather that innovations, i.e., new combinations
whatever they may be (steam engine, cotton mill, computer chip, credit card,
mass marketer)  open up new `spaces' (social, physical, political,
electronic, etc.,etc) for accumulation and the reward to those who
create/pioneer these spaces (entrepreneurs) are surplus profits (after all,
we must remember that JS was talking about the dynamic - combined and uneven
development - of capitalism - combined and uneven development would not
characterize communism or socialism).


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Carl H.A. Dassbach                                   E-mail:   DASSBACH@xxxxxxx
Dept. of Social Sciences                            Phone:   (906)487-2115
Michigan Technological University              Fax:       (906)487-2468
Houghton,  MI   49931    USA