Explaining long waves of capitalist development

Abstract

Although basic innovations are bunched in a ‘countercyclical’ manner during the depressive phases of long waves, they do not themselves cause the transition to an expansionary boom phase. Explanation of the turning points must be sought elsewhere. Eong-term changes in the average rate of profit are the main cause of fluctuations in the system, but these are related to other fundamental features of the capitalist mode of production. Whereas the upper turning points from the boom to the depressive phase are determined largely by endogenous factors, especially the rise in the organic composition of capital (growth of capital intensity), this is not true of the lower turning points. Exogenous ‘system shocks’ of various kinds are needed to propel the system out of the depressive phase. This is the arena of acute social and political struggles, whose outcome is by no means mechanistically predetermined.