The Long Wave - Part 1

The Long Wave is an economic, social and political cycle that lasts on average for 54 years. The cycle is divided into four distinct phases – Spring, Summer, Autumn and Winter. The most extensive analysis of the cycle was undertaken by the Russian, Social Revolutionary, statistician and economist, Nikolai Kondratiev, and set out in a number of pamphlets published in the 1920's. Kondratiev himself fell foul of Stalin's purges in the 1930's. Not all economists accept the existence of the long wave. However, there seems little doubt of such a statistical pattern stretching back to the late 18th century. The main argument is really about the causes of the cycle, and how endogenous and exogenous factors interact within it.

Franceso Louca, in his analysis, sets out the main works by Kondratiev on the long wave and the conjuncture, running from 1922 to 1934. Louca provides the following table of long wave periods, as defined by a number of theorists, including Kondratiev. 

Dating Of Long Waves
Author	First Upswing	First Downswing	Second Upswing	Second Downswing	Third Upswing	Third Downswing
Engels		1825-42	1842-68	1868...
Tonelli			1852-73	1873-97	1897 - 1913
Bresciani-Turroni			1852-73	1873-97	1897 - 1913
Van Gelderen			1850-70	1870-95	1895...
De Wolff		1825-49	1850-73	1873-95	1895...
Trotsky	-1781	1851	1851-73	1873-94	1894-1913	1913...
Kondratiev	1780/90 – 1810/17	1810/17 – 1844/5	1844/5 – 1870/5	1870/5 – 1891/6	1891/6 – 1914/20	1920..

Kondratiev himself believed that the US was about 10 years out of synch with this global long wave cycle. So, for example, whilst Europe began its Autumn phase between 1914-20, experiencing a long period of economic weakness, and social upheaval, starting with WWI, the Russian and other European Revolutions, and continuing through the 1920's through to the early 1930's, the United States, in the 1920's, experienced a period of rapid economic growth – the Roaring Twenties – which only ceased around the time of the 1929 Wall Street Crash.

Most theorists believe that the fourth Long Wave upswing began after WWII, around 1949. In line with the length of previous cycles, it ended around 1974. The fourth downswing, therefore, ran from 1974 to 1999. That was marked by the fact that, as with previous cycles, at this juncture, all primary product prices, for things like oil, copper and so on reached their lowest points, as did gold, which is another characteristic of the final stages of the long wave downturn. The fifth long wave upswing began, therefore in 1999, and, on the basis of previous cycles, should run until around 2025. The start of this new upswing has been marked, as with all previous upswings, by a sharp rise in trade, and in primary product prices, as well as with the price of gold.

Forward To Part 2