David Stockman is looking at how industrial production has remained flat for several years. So I thought I’d explain to him why that is happening. I left this comment for him:
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David,
We are at the bottom of a Kondratieff Cycle. What causes the bottom is that we have run out of profits based on the last round of technological advance.
In addition there is a structural problem. Labor – fitted to an industrial economy is not so much in demand. In the 1930s it was farm labor. These things take 20 years to work out.
Also at the bottom the ins are fighting the outs. That delays the next cycle.
Big pharma is fighting cannabinoid medicine. “Conventional” oil is fighting fracking. Old agriculture is fighting GMOs. etc. The Luddites always gain strength at a bottom. And then they dissolve.
Comments
4 responses to “A Kondratieff Bottom”
Is a Kondratieff bottom anything like a Kardashian bottom? Not to be confused with a Cardassian bottom. I want to get to the Bottom of this *honk*
Machines keep getting better, and labor gets priced and regulated out of the market. What do we do with the displaced and useless? Short of keeping them around for spare parts and an occasional taste treat. Tax the machines, use the revenue to fund the dole. Or WPA-type projects, tax-funded inefficient, hard physical labor intensive useful projects, road grading, gravel pits, salt mines and so on. It’s a jobs program!
MMM,
It is a moral problem that has never been addressed. We can be excused for not addressing it in the 1930s because it was not well understood.
What is amazing is that 80 years later with our understanding much better it is still a moral question that is only addressed on the fringes.
I quit being a libertarian absolutist when I started thinking about this.
I understand all you said, but one thing. What is “conventional” oil and how is it fighting fracking? Around here (Northern CO) fracking is huge.