Long Cycles, Theory of

The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Long Cycles, Theory of


one of the vulgar bourgeois theories of crises and economic cycles. It was first formulated in the 1930’s by the Russian economist N. D. Kondrat’ev. In bourgeois economic literature long cycles are usually called “Kondrat’ev cycles.” The theory was further developed in the works of C. Clark (England); W. Mitchell, A. Burns, and their supporters from the National Bureau of Economic Research (United States); and F. Simiand (France), among others. The essence of the theory of long cycles is the assertion that there supposedly exist “long cycles” (50 to 60 years), which are characterized by an alternation of increasing and declining economic activity. The cycle consists of the “capital starvation” and “capital saturation” phases. During the first period there is a rise in the rate and scale of new construction, an increase in employment in the manufacturing industry and service spheres, a maintenance of the employment level in agriculture, an elimination of chronic unemployment, an increase in the export of capital, a rise in investments into nations and sectors which are the suppliers of mineral and agricultural raw materials, a rise in loan interest rates, and so forth. As investment demand weakens, the “capital starvation” phase is gradually replaced by the “capital saturation” phase which lasts from 25 to 30 years. In this phase surplus capital appears, chronic unemployment rises, the rate of the shift of manpower from the sectors producing raw materials into the manufacturing industry and the service sphere declines, the export of capital falls off, and the loan interest rate drops and then remains at a low level. In the opinion of the proponents of this theory, long fluctuations in commodity prices lie at the base of the alternation of the phases. According to this concept, in the history of the development of the capitalist economy from the second half of the 19th century, there have been two long cycles: the first from 1850 through 1900 and the second from 1900 through 1940. Since 1945 a third long cycle has commenced with the phase of “capital starvation.” Thus, actual economic cycles disappear, and the main phase of the cycle—that is, the economic crisis of overproduction—is dissipated in the fluctuations of the long waves. On the basis of the theory of long cycles, the scheme has been devised for a possible crisis-free development of the capitalist economy. The concept of long cycles is directed against the basic Marxist thesis concerning the inevitability of economic crises under capitalism, and it conceals the unsolvable contradictions of capitalist society. The theory was most widespread in the prewar years. After World War II, its theses have been shared by a number of bourgeois economists and used by them for forecasting the development of the capitalist economy.


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The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.