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The second post in my series on long wave theories

The idea of long waves is associated with the Russian economist Nikolai Kondratiev, who was eventually shot by Stalin for his troubles. But the first versions of the theory came from two Dutch scholars a decade earlier, van Gelderen and de Wolff. Kondratiev studied price data (and therefore effectively was looking at long swings in economic investment activity), but other long wave theorists have developed their theories based on different drivers of change, from innovation, to capitalist restructuring, to long-run capital investment, to war.

My plan in these posts was to review the different theories by re-reading the various theorists, but the American academic Joshua Goldstein has done a lot of this work in some detail in his 1988 book Long Cycles: Prosperity and War in the Modern Age, and has also posted the whole of the book online. I’d say his book is essential reading if you’re interested in the idea of long wave theory.

This post will draw on some of my wider reading, but will mostly synthesise the painstaking work that Goldstein has done.


Of course, the first thing to say is that there are still people who think that the whole idea is moonshine. The economist Paul Samuelson called long waves “science fiction,” and in the mid-1980s it was possible for an academic, Tom Kitwood, to write an article called “A Farewell Wave to the Theory of Long Waves”, arguing that “No clear means have yet been devised for classifying the major long-wave theorists .” The other half of this – as the Marxist economist Ernest Mandel observed – is that interest in long wave theories tends to pick up in economic downturns, and dissipate in the upturns.

Teasing out the evidence

In his book, Goldstein goes about teasing out both the evidence and the different schools of long wave theorists. In this post I’m going to look specifically at these two aspects of his work.

So Goldstein focusses on the four long wave schools that were visible when he wrote the book in the late-1980s. Three of these are economic: the innovation school, associated with Schumpeter, Mensch, and latterly Christopher Freeman, which he characterises as “liberal,” in that the system remakes itself within the existing economic framework; the capital investment school associated with Kondratiev and Forrester, which he characterises as “conservative” in that the long waves are seen as the normal working of the system; and the capitalist crisis theory of Trotsky and Mandel, which sees long waves as driven by the repeated restructuring of the system in the face of crisis.

Figure 1: Main economic ‘long wave’ schools of thought

Goldstein - Long wave economic schoolsLooking at the economic schools, which are summarised in the figure, what separates them is competing views of rationality. Why do capitalist firms choose (or not) to invest, at one time rather than another, and why?

The war school, which comes out of a different tradition, connects long shifts in national economic hegemony with military and diplomatic competition. Goldstein sees similar differences in worldview within this group of scholars.

The “innovation” school here is based around the work of Modelski, on leadership cycles, which sees new countries emerging into global leadership through innovation in political structure and military techniques. The “conservative” school is the “power transition” school, based on the work of Organski, in which national transitions are a result of changing national capabilities. The “revolutionary” school, associated with Immanuel Wallerstein, sees change resulting from competition between the states in the global core as they try to control the states in the global periphery.

Figure 2: Similarities in perspectives

Source: Joshua Goldstein, p151
Source: Joshua Goldstein, p151

It’s worth noting that there are some theories that are left out of Goldstein’s schema, because they hadn’t emerged fully in the 1980s, and I’ll discuss these in later posts. These are the “secular cycles” model associated with Peter Turchin, which connects wages, prices, and elite competition; the “social structures of accumulation” model, stemming from David Gordon, which comes out of the capitalist crisis tradition but focuses of the economic, political and social institutions that enable accumulation; and the “generational” model of Strauss and Howe, which, it seems to me, sits apart from all of the other models.

Competing worldviews

One of the reasons why ideas about long waves lacked credibility when Goldstein wrote the book was precisely because these differences in worldview meant that it was all but impossible to evaluate the claims made by different groups of scholars. There’s a fascinating chapter, “Knowledge Cumulation in the Long Cycle Field” where he reviews the relative fragmentation of the whole field through different epistemological lenses, including theories of science (Kuhn, Popper, Lakatos) and the interactions – or not – between the different groups of communities of scholars, partly impeded by the interdisciplinary nature of the field, which creates its own problems of terminology, language, translation and knowledge transfer. Goldstein’s response to this fragmentation was a painstaking analysis of the hypotheses that sit beneath the work of the different schools, some of which are contradictory, to identify which were supported by evidence and which not. That’s a big subject, which I’ll come back to in another post.

For the moment, it’s worth just stepping back to an earlier piece of analysis in the book, where he simply lists (or not so simply; it’s an impressive effort in synthesis) the seven different groups of evidence that long wave researchers have drawn on in their analysis, and assesses the state of the evidence.

Long wave arguments …

This list is taken directly from Chapter 4, on “Empirical Arguments” (pp 64-65).

  1. Prices: Are there synchronous long price waves in the core countries? How early can they be found, and in what countries? These questions interest almost all long wave scholars since prices are the most readily available economic data and since all schools posit long waves of prices.
  2. Production: Are there alternating phases of fast and slow growth in core countries’ production? In what countries and time periods can they be found? These questions are central to the capitalist crisis school as well as to certain liberal critics who see long waves as “only price waves.”
  3. Innovation and Invention: Are waves or clusters of innovations synchronous with long waves? Are they directly or inversely correlated with economic growth phases? These questions are central to the innovation school.
  4. Capital Investment: Do spurts of capital investment correlate with the early upswing of the long wave? The correlation of investment levels with long waves is of particular concern to the capital investment school.
  5. Trade: Do levels of exports or other indicators of international trade follow the long wave phases? Trade concerns some members of the capitalist crisis school who see capitalism as production for a world market.
  6. Real Wages and Working-Class Behavior: Do real wages fluctuate with the long wave? Do strikes and other worker protests follow long wave phases? These questions concern the capitalist crisis school.
  7. War: Do major wars tend to occur at one point in the long wave? Does the timing of major wars correlate with long wave phases? These questions concern the war school.

Obviously different schools have different centres of gravity, but these cover the issues that the schools he’s reviewing are interested in.

… and evidence

He then looks at the quality of the evidence behind each of the seven.

  • The evidence on prices is good, in both the industrial period (post-1790) and pre-industrial, with clear differential movements in changes in prices in upswings and downswings, and relatively high levels of agreement among scholars about the dates of turning points.
  • On production, Kondratiev’s work – which involved some complex equations – was roundly criticised at the time by other Russian scholars, but later work – all from the capitalist crisis school – suggests that it is possible to identify shifts in long-run economic growth rates that correspond to upswings and downswings.
  • On innovation, Goldstein notes, “ There is no consensus on how to measure innovation” (p 92) and you get this impression very strongly when reading Long Waves In The World Economy, edited by Christopher Freeman, where it’s clear that different academics are effectively talking across each other by discussing different types of innovation. One of the splits within this group, at least in the ’70s and ’80s, was between those who associated innovation peaks with the downswing and those who saw them occurring early in the upswing – quite a fundamental difference. Goldstein concludes: “ To summarize, the empirical evidence for long waves in innovation is mixed” (p 96). In her book Technological Revolutions and Financial Capital, published in 2002, Carlota Perez proposes an elegant solution to this dispute, but I’m planning to discuss that another time.
  • On capital investment, trade, and real wages,  he found that there had been “almost no empirical work”, so they were impossible to assess.

In summary then: “Quantitative empirical studies of long waves over the past sixty years have produced some areas of convergent results and other areas of unresolved dispute.”  In the next ‘long waves’ post I’ll review Goldstein’s work on the different long wave hypotheses. I’m also planning to spend more time on the ‘war school’ in another post.