In a comment, Bob Quiggin challenged the arguments I put forward in Kondratiev cycles, innovation and over-regulation . I do like challenges because they force me to check and refine.
Bob began his comment:
The reason you haven't heard of Kondratiev cycles since uni is because they lacked both provability, predictive force and explicative force (i.e. they stand as an article of faith).
Why? because the period of the cycle is defined post-hoc, which is why long term can mean anything from 30 years to 70 years or in some writers' belief 150 years. So much happens in such a cycle that to ascribe it to a single factor beggars belief.
Secondly, because the timing is post hoc, so is the explanation, which means that thirdly there is no predictive force.
Now here I think Bob is both right and wrong.
When I first came across Kondratiev cycles in economics, I was also studying history. Historiography is littered with examples of people attempting to define patterns that can then be used for explanatory or predictive purposes. The great British historian Arnold J. Toynbee is an example with his focus on comparative history.
As an aside, I did not know that Toybee was first married to Gilbert Murray's daughter. I wrote about the Murray family in Patrick Desmond Fitzgerald Murray 1900-1967. I am constantly struck with just how small a world the old British Empire and Commonwealth was, at least among the educated elites.
The problem with all these attempts at pattern definition is the risk of the post hoc ergo propter hoc fallacy, literally after this, therefore because (on account) of this. Just because a follows b does not, of itself, imply anything about causation.
Kondratiev cycles certainly suffers from this problem.
If I remember my history, Kondratiev himself was a marxist. Marxist theory suggested that capitalism must collapse under its own weight, yet this appeared to Kondratiev to be at odds with the historical evidence. He developed his cycle or wave concept to explain this, a theological sin for which he was to perish in Stalin's gulags. Kondratiev's work was then taken up and popularised by the great American economist Joseph Schumpeter in his explanations of economic development.
Yet while Kondratiev cycles do suffer from the problems as specified by Bob, I still find them useful because they challenge some of the implicit assumptions and world views embedded in modern economics.
Bob went on:
You blithely talk about the exhaustion of the ICT wave - I see terabyte desktop machines for less than $A1500, when Paxus (now extinct) had a 20 terabyte facility in Canberra that was the largest or second largest in the southern hemisphere less than 20 years ago.
IMHO Moore's law continues to operate but it allows rigidities like onerous record keeping and all the other up-the-down-escalator brakes on progress, some of which are justified and some of which are not.
Over-regulation is indeed a key problem, but its relationship to ICT of Kondratiev is about the same as mine to the consumption of Resch's Pilsener (a near zero correlation, which if anything is negative).
How is your silver bullet campaign going, BTW.
Bob, I fear that my silver bullet campaign is making slow progress, although I do now have a regular supply of Resch's Pilsener. As a consequence, my overall shopping at the nearby Woolies is down about sixty per cent because I tend to buy things at the IGA next door to the bottleshop!
My response to Bob's core comment is a simple one.
Concepts such as Kondratiev cycles force us to ask new questions of the evidence. Take the ICT revolution as an example. Yes, it is true that technological advance continues. But does that mean that the new developments will have the same impact? I think not.
The impact of the motor car in Australia is instructive in this context.
The really big impact came in the first twenty years when cars and lorries replaced horse drawn transport. In the ten years between 1919 and 1929 the new form of transport wiped out not just horses, but all the activities and industries linked to horse drawn transport. In doing so, it totally altered the structure of life, especially in regional Australia.
The next big impact came in the 1950s when growing wealth allowed mass ownership of cars. While this had a major impact on city structures, the trigger was wealth, not technology. The same thing holds today in India and China.
My point here is that the greatest impact of ICT lies, I think, in the past. Developments will continue, but now we are dealing with change at the margin. Greater processing power, greater storage capacity, greater bandwith will allow new things, but these are changes at the margin.
To my mind, the next big effect from the ICT revolution will, like the car before it, come not from technological development, but from diffusion associated in developing countries with growing wealth.