Does Capitalist Production Have a Long Cycle?

The question of whether in addition to the industrial cycle of more or less 10 years’ duration there is a longer cycle extending over several “10-year” cycles has divided both Marxists as well as bourgeois economists who have shown interest in business cycles.

Some economists, both Marxist and bourgeois, have held that in addition to the 10-year industrial cycle that I have been examining up to now, there are other economic cycles of varying lengths that can be traced in the history of the world capitalist economy. Especially controversial has been the proposal that capitalist production is characterized by a “long cycle” that extends over periods as long as 50 or even 60 years.

Other Marxists and bourgeois economists have denied that there is any evidence to support the existence of a long cycle. The quasi-regular fluctuations of business conditions over 10-year periods is called a cycle because each phase of the cycle leads of necessity to the next phase. In my posts on an ideal industrial cycle, I examined this in some detail. But what would be the mechanism of a longer cycle as opposed to the mechanism of the 10-year industrial cycle?

Boom-dominated versus crisis/depression-dominated cycles

Individual industrial cycles differ from each other in many ways. Indeed, no two are exactly alike. Some industrial cycles are dominated by booms. After a short recession, there is a rapid recovery that leads to a prolonged boom. Over a 10-year life of such a cycle, there might be two years of recession and depression followed by eight years of prosperity accompanied by lesser fluctuations.

Other 10-year cycles have been marked by prolonged crises and/or prolonged depressions. In these crisis/depression cycles, there are only several years of real “prosperity.” (1) The most extreme depression-dominated cycle was the 1930s Great Depression, which saw the crisis or “recession” of 1929-33 and the relatively brief “recession” of 1937-38, which was, however, extremely violent in the United States, where it originated. (2) In the United States, the leading capitalist country, official double-digit unemployment lingered through 1940, and official unemployment was still close to double-digit figures as late as 1941! (3)

Why was the industrial cycle of the 1930s so radically different than all the other industrial cycles in the history of capital?

Another example that is hard to fit into a simple 10-year cycle scheme is the stagflationary crisis of the 1970s. That decade did not see a full 10-year industrial cycle but rather a rapid succession of brief highly inflationary boomlets, and the violent recession of 1974-75. This was quickly followed by the more prolonged economic crisis of 1979-82, which itself saw the brief recession of 1980, the aborted recovery of 1980-81, followed by the longer deep recession of 1981-82. The decade had began with the milder recession of 1969-70, which had followed the collapse of the “gold pool” in March 1968. (4)

If we count the 1980 and 1981-82 downturns as representing two separate “recessions,” over the 14 years that followed the collapse of the gold pool, there were four recessions. This is in sharp contrast to the 1960-68 period, which preceded the collapse of the gold pool, and the decades of the 1980s and 1990s, which followed the stagflation decade. Indeed, in retrospect the entire 14-year period from 1968 to 1982 appears as one long-drawn-out economic crisis with fluctuations within it.

Can such extraordinary episodes as the Great Depression of 1929-40 and the 1968-1982 stagflation be described in terms of the operation of some sort of long capitalist economic cycle? Assuming such a cycle exists, then the Depression of the 1930s and the 1968-1982 stagflation would be “recessions” in the long cycle. In contrast, the years of prosperity that stretched from right after World War II to 1968 and the “Great Moderation” that lasted from 1983 to 2007 would represent the “prosperity phase” of the long cycle. (5)

The current depression would likely represent the first stage of a new “recession” in the long cycle that would be expected to last at least a decade and perhaps considerably longer.

But what is the cyclical mechanism involved in the long cycles, assuming that they really exist? And if there is no long cycle, what were the non-cyclical causes of the Depression of the 1930s and the stagflation of the 1970s? (6)

One or two or many cycles?

In my series of posts on the “ideal” industrial cycle, I assumed that there is one capitalist economic cycle, what Marx called the industrial cycle. I assumed that all the contradictions of capitalist production accumulated in the course of this cycle of about 10 years’ duration are then discharged in a single crisis at the end of the cycle. If actual industrial cycles corresponded to the “ideal cycle” I described, each cycle would have a crisis, a depression, a phase of average prosperity, and a boom of more or less equal length.

Even if there was a tendency for the lengths of the various stages within the cycle to change over time, this would be a secular process, not a cyclical process. But concrete industrial cycles do differ from one another. These differences are not a matter of theory but a matter of empirical fact. Are the sometimes drastic differences observed among concrete individual cycles, due to accidental forces, secular forces, or some kind of cyclical tendency at work?

In addition to the possible existence of a long cycle, many economists have claimed that a short cycle of about 40 to 48 months exists. A full theory of crises and capitalist economic cycles would also have to account for the existence of this cycle.

To my knowledge, at least five different economic cycles within the capitalist economy have been proposed at one time or another. Perhaps some readers have heard of even more.

The five proposed cycles

The famous bourgeois marginalist economist Joseph Schumpeter (1892-1950), in his 1939 book “Business Cycles,” supported the existence of three cycles out of the five proposed economic cycles. Schumpeter named his cycles after the bourgeois economists and statisticians who he claimed discovered them. (7)

Schumpeter included the Juglar cycle, of about 10 years’ duration, named after the French economist Clement Juglar, who Schumpeter credits with discovering it. This clearly corresponds to Marx’s 10-year industrial cycle. When economists speak of “the business cycle” or the “trade cycle,” this is what they are referring to.

In addition to the 10-year cycle, Schumpeter claimed there existed a short “Kitchin cycle” of about 40 or 48 months’ duration, named after Joseph Kitchin, and a far more controversial long cycle of about 50 or even 60 years’ duration, which Schumpeter called the Kondratiev cycle, named after the Russian economist Nikolai Kondratiev (1892-1938). This is sometimes abbreviated to the K cycle.

According to Schumpeter, one of the reasons why the economic crisis 1929-33 was so severe was that it corresponded to a trough in all three cycles. The downturn in each cycle reinforced the downturn in the other cycles. However, most of the time, according to Schumpeter, the various cycles cross one another—a peak in one might correspond to a trough in another, thereby creating business conditions that are somewhere between all-out boom on one hand and the extreme crisis conditions of 1932-33 on the other.

Schumpeter claimed that the various cycles arose through the complex interactions of waves of entrepreneurial innovations. By innovations, Schumpeter meant not the inventions of new technologies and business methods but their successful—profitable—application by entrepreneurs—industrial, commercial or financial capitalists. According to Schumpeter’s theory, complex interactions of these innovations and their aftermath give rise to the three cycles he recognized: the the short 40- to 48-month Kitchin cycle, the intermediate 10-year Juglar cycle, and finally the 50- or 60-year Kondratiev cycle.

Two additional cycles?

The Russian-American economist Simon Kuznets proposed yet a fourth cycle, a 20-year cycle said to involve fluctuations in the construction industry. A fifth cycle covering 100-year periods has even been suggested. I do not propose in these posts to explore the alleged 20-year Kuznets cycle, or the suggested 100-year cycle, since evidence for their existence seems very thin, to say the least. But evidence for both the Kitchin cycle, to use Schumpeter’s terminology, and the Krondratiev cycle appears strong enough to merit examination.

It is the 50- to 60-year Krondratiev cycle that has generated the most controversy among Marxists. Can a long cycle be explained by and integrated into Marxist crisis theory? It is this proposed cycle that I will be exploring over the next series of posts beginning with next week’s post. Before I do so, I will examine what some well-known Marxists have to say about economic cycles in the capitalist economy other than the 10-year industrial cycle, beginning with Marx and Engels themselves.

First, did Marx and Engels have anything to say about multiple economic cycles? As regards Schumpeter’s so-called Kitchin cycle, I think the answer is yes.

Marx describes a ‘Kitchin’ cycle

In his much-quoted “18th Brumaire of Louis Bonaparte,” Marx gives a remarkable description of a “Kitchin downturn” that hit France and Britain in 1851—almost 70 years before Kitchen “discovered” short cycles in the 1930s.

The last major global economic crisis had begun in Britain in the fall of 1847 when the London financial markets crashed. The resulting economic depression and associated mass unemployment helped trigger the wave of revolutions that swept the European continent during the following year, the revolutionary year 1848. However, a new and very powerful economic upswing soon set in—after only a brief depression—and was destined to continue until the next major crisis hit in 1857.

This rapid return to prosperity after the brief 1848 depression was in sharp contrast to the prolonged depression and widespread unemployment that followed the previous crisis in 1837. The powerful economic upswing of 1848-1857, in turn, helped strangle the revolutionary wave that had swept Europe in 1848.

Marx and Engels were among the first to explain that the capitalist prosperity that began in 1848 had halted the revolutionary wave and ushered in a new period of political reaction. (8) The two friends expected the revolutionary wave would resume when the next economic crisis hit. (9)

As things turned out, the next major crisis didn’t break out until 1857, much later than Marx and Engels had originally expected. It was then that Marx and Engels realized that industrial cycles generally lasted about 10 years. In the “18th Brumaire of Louis Bonaparte,” which Marx wrote in the winters of 1851 and 1852, he paid especially close attention to how changes in the economic situation affected the evolution of the political situation in France.

“The end of February,” Marx wrote, “showed a decline in [French—SW] exports compared with 1850; in March trade suffered and factories closed down; in April the position of the industrial departments appeared as desperate as after the February days; in May business had still not revived; as late as June 28 the holdings of the Bank of France [France’s central bank—SW] showed, by the enormous growth of deposits and the equally great decrease in advances on bills of exchange, that production was at a standstill, and it was not until the middle of October that a progressive improvement of business again set in.”

Since the last major economic crisis had been in 1847-48, it was far too early in the next industrial cycle for a major new crisis. Why then was the French economy experiencing symptoms of an “economic slowdown”—a minor recession—to use the language of today’s bourgeois economists to describe such conditions.

Marx reported that the French bourgeois press blamed the economic downturn on the political turmoil that France was passing through under the presidency of Louis Bonaparte. There certainly was political turmoil in France in those years, as Bonaparte, who was elected French president in the elections that followed the February Revolution of 1848, attempted to consolidate his position as ruler of France. (10)

But Marx did not agree that the “economic slowdown,” or “mini-recession,” that hit France in 1851 was caused by political turmoil. The “effect of political circumstances was only local and trifling,” according to Marx. So if it wasn’t the political turmoil of the time, what did cause the economic slump of 1851?

First, Marx notes that the 1851 business downturn did not simply affect France, it also affected England, though unlike France, there was little political turmoil in England at that time: “While in France factories were closed down, in England commercial bankruptcies broke out. While in April and May the industrial panic reached a climax in France, in April and May the commercial panic reached a climax in England. Like the French woolen industry, the English woolen industry suffered, and as French silk manufacture, so did English silk manufacture.”

While the English silk industry was experiencing a recession, there was not a general recession in England in 1851. The main English industry of the time, the cotton industry, experienced only a downturn in profits but not enough of a downturn to represent a full-scale recession. “True, the English cotton mills continued working,” Marx wrote, “but no longer at the same profits as in 1849 and 1850.” So England was hit too, but not nearly so hard as France.

“The years 1849 and 1850 were years of the greatest material prosperity,” Marx explained, “and of an overproduction that appeared as such only in 1851.” This prosperity “was given a further special impetus by the prospect of the Industrial Exhibition,” Marx continues. “In addition there were the following special circumstances: first, the partial failure of the cotton crop in 1850 and 1851, then the certainty of a bigger cotton crop than had been expected; first the rise, then the sudden fall, in short, the fluctuations in the price of cotton. The crop of raw silk, in France at least, had turned out to be even below the average yield. Woolen manufacture, finally, had expanded so much since 1848 that the production of wool could not keep pace with it and the price of raw wool rose out of all proportion to the price of woolen manufactures.”

In addition to these “accidental causes” arising from the general anarchy of capitalist production and the ups and downs of the production of agricultural raw materials in response to favorable and unfavorable weather conditions—which would represent the operations of non-cyclical accidental elements—Marx also saw a cyclical element at work.

“Apart from these special circumstances, Marx wrote, “the apparent crisis of 1851 was nothing else but the halt which overproduction and over-speculation invariably make in completing the industrial cycle, before they summon all their strength in order to rush feverishly through the final phase of this cycle and arrive once more at their starting point, the general trade crisis.”

That is, the industrial cycles, at least in those days, did not actually proceed as smoothly as the “ideal” industrial cycle that I described in earlier posts. After the economy pulled out of the last crisis but before the full-scale boom arrived, there was a “halt which overproduction and over-speculation invariably make” [my emphasis—SW] at the end of the period of “average prosperity” but before a full-scale economic boom develops that will end in a major general crisis. (11)

But what would be the mechanism of the “Kitchin” cycle? This cycle is often described as the “inventory cycle.” That implies that the cycle is dominated by the movement of commodity capital. During periods of considerable excess capacity in industry, it is quite possible for the industrial capitalists to increase the quantity of commodity capital without undertaking massive new capital investments. Or what comes to the same thing, without a major expansion of fixed capital in the form of new factories, expanded factories and the introduction of new more powerful machinery.

A sharp increase in the quantity of commodity capital, however, still implies a rise in the quantity of real capital—productive plus commodity capital relative to metallic money. Whenever this happens, interest rates tend to rise sharply.

Marx noted that, as a rule, business expansion can only be sustained if interest rates are either more or less steady or at most rising only slowly. But assuming interest rates are well below the rate of profit, why would a sharp increase in the rate of interest check a business expansion?

We know that when the price of a commodity like oil rises sharply, the oil capitalists tend to withhold the commodity from the market in the expectation that the price will rise still higher. At some point, the price stops rising, and suddenly the commodity that has been withheld from the market is dumped on the market. The apparent shortage of the commodity seems to change overnight into a massive glut as the previously hoarded commodity is dumped on the market and prices collapse. (12)

Perhaps something similar happens with loan money capital. If interest rates are rising rapidly, the money lenders have an incentive to withhold their money capital from the market awaiting still higher interest rates. Therefore, credit seizes up, and loans become difficult to obtain. What is sometimes called a “credit-crunch” forces industrial and commercial capitalists to liquidate some of their existing commodity capital—inventories. As they do so, orders are canceled and industrial production slows.

This is the way major crises begin. But if such a process of inventory liquidation begins when capital spending is relatively low, or what comes to exactly the same thing, in the absence of a major expansion of fixed capital, the inventory liquidation is unlikely to be accompanied by a major collapse in investment. And a sharp decline in investment—the construction of new factories and the expansion of old ones, plus the introduction of new more powerful machinery on a large scale—accompanies every major downturn.

In a minor “Kitchin recession,” loan money capital that was withheld from the money market as long as interest rates were rising rapidly floods the market as soon as the “Kitchin recession” causes interest rates to stop rising. This, then, causes interest rates to tumble. Soon inventory accumulation resumes, and the economy turns up without having passed through a full-scale crisis.

Therefore, if the 10-year industrial cycle is marked by the periodic over-investment—or over-expansion—of fixed capital, or what comes to exactly the same thing, the overproduction of the means of production the 40- to 48-month Kitchin cycle is characterized by the “over-investment” in commodity capital, or “inventories.” That is why it is called the “inventory cycle.”

This, in my opinion, is the mechanism for the 40- to 48-month “Kitchin” inventory cycle.

But what could be the mechanism for the “long cycle”?

Marx and Engels on long cycles

As we saw above, as early as the winter of 1851-52, Marx was well aware of the “Kitchin cycle.” In these years, his best friend, Frederick Engels, was working in his father’s Manchester textile mill. Engels, therefore, had plenty of first-hand knowledge about concrete business conditions, the kind of knowledge that cannot be gained in the classroom or even at a great library such as the British Museum, but only through actual experience. But were Marx or Engels—the independent opinions of Engels must never be underestimated because of his concrete experience as a Manchester businessman—aware of any long cycle that might correspond to Schumpeter’s Krondratiev cycle?

As far as I know, Marx never wrote about a long cycle, which of course does not prove that such a long cycle does not exist. Perhaps Marx failed to notice the long cycle simply because there hadn’t been enough of them yet to demonstrate their cyclical nature.

But what about Engels? Frederick Engels with his vast knowledge of political economy and Marx’s critique of it—second only to Marx himself—had first-hand knowledge of the business world that Marx lacked. In addition, Engels lived 12 years after the death of Marx, so he had more data to analyze. Did Engels notice anything that might correspond to a “long cycle”?

Engels, writing in 1894, explained that the 10-year industrial cycle that he and Marx had written about in earlier years had seemingly undergone a change. The “former ten-year cycle,” Engels noted, “appears to have given way to a more chronic, long drawn out, alternation between a relatively short and slight business improvement and a relatively long, indecisive depression—taking place in the various industrial countries at different times.” “But perhaps,” Engels wrote, “it is only a matter of a prolongation of the duration of the cycle [emphasis added—SW]. In the early years of world commerce, 1815-47, it can be shown that these cycles lasted about five years; from 1847 to 1867 the cycle is clearly ten years; is it possible that we are now in the preparatory stage of a new world crash of unparalleled vehemence? Many things seem to point in this direction. … Thus every factor, which works against a repetition of the old crises, carries within itself the germ of a far more powerful future crisis.” (Footnote by Engels in volume III of “Capital,” chapter 30, “Money-Capital and Real Capital”) (13)

Engels doesn’t quite say here that there is a separate “long cycle,” but he does consider it a possibility that the 10-year industrial cycle had been extended considerably beyond its previous length. Therefore, Engels didn’t consider a cycle that is considerably longer than 10 years beyond the realm of possibility.

But do Krondratiev cycles really exist?

In his 1972 book “Late Capitalism,” Ernest Mandel (1923-1995), the Belgium Marxist economist, credits the Russian Marxist Alexander Helphand aka Parvus (1867-1924) with the discovery of “long waves.” (14) According to Mandel, Parvus believed “that the long depression which began in 1873 and to which Fredrick Engels had attached such importance ought soon to be replaced by a new long-term upswing.” I have no access to Parvus’s article, so I am unable to express an opinion on his “long wave” theory or whether he in fact proposed one.

“More than 10 years were to pass,” Mandel wrote in “Late Capitalism,” “before this fertile idea of Parvus—which had won the immediate praise of Kautsky—was taken up once more, this time by the Dutch Marxist J. Van Gelderen.” (15)

Kondratiev, who had been a supporter of the Social Revolutionary Party, did his major work in Soviet Russia after the Russian Revolution. In 1923, his work drew criticism from Leon Trotsky (1879-1940), who once worked closely with Parvus in the old Russian Social Democratic Labor Party. Trotsky, however, did not deny that the history of capitalism is characterized by alternating periods of rapid growth followed by prolonged long-term downturns. On the contrary.

“But capitalism,” Trotsky wrote in “The Curve of Capitalist Development,” “is not characterized solely by the periodic recurrence of cycles[,] otherwise what would occur would be a complex repetition and not dynamic development. Trade-industrial cycles are of different character in different periods. The chief difference between them is determined by quantitative interrelations between the crisis and the boom period within each given cycle. If the boom restores with a surplus the destruction or constriction during the preceding crisis, then capitalist development moves upward. If the crisis, which signals destruction, or at all events contraction of productive forces, surpasses in its intensity the corresponding boom, than we get as a result a decline in economy.”

This actually overstates the case. So far, especially if taken on a world scale, each successive boom has reached a higher level than its predecessor, though some booms have exceeded the previous boom by a considerably greater margin than others.

“Finally,” Trotsky wrote, “if the crisis and boom approximate each other’s force, then we get a temporary and stagnating equilibrium in economy.”

Again, something of an overstatement, though it is true that the level of U.S. industrial production in 1939 showed almost no increase compared to 1929.

So Trotsky did not disagree that capitalism shows alterations of cycles dominated by booms and other cycles dominated by crises-depressions. So what was his disagreement with Krondratiev?

“Kondratiev approached this problem—as usual, painstakingly evading the formulation of the question adopted by the [Third World Congress of the Communist International] itself—and attempted to set up alongside of the ‘minor cycle’, covering a period of ten years, the concept of a ‘major cycle’, embracing approximately fifty years. According to this symmetrically stylized construction, a major economic cycle consists of some five minor cycles, and furthermore, half of them have the character of boom, and the other half that of crisis, with all the necessary transitional stages. The statistical determinations of major cycles compiled by Kondratiev should be subjected to careful and not over-credulous verification in respect both to individual countries and to the world market as a whole. It is already possible to refute in advance Professor Kondratiev’s attempt to invest epochs labeled by him as major cycles with the same ‘rigidly lawful rhythm’ that is observable in minor cycles; it is an obviously false generalization from a formal analogy. The periodic recurrence of minor cycles is conditioned by the internal dynamics of capitalist forces and manifests itself always and everywhere once the market comes into existence.”

The statement by Trotsky that the periodic recurrences of “minor cycles”—by which he means the 10-year industrial cycle—comes into existence “everywhere once the market comes into existence” is, strictly speaking, incorrect. Markets predate by thousands of years the emergence of capitalist production proper based on the exploitation of “free wage labor.” And industrial cycles, capped by crises of world market-wide overproduction, require a high degree of capitalist development before the appear.

“As regards the large segments of the capitalist curve of development (fifty years),” Trotsky continued, “which Professor Kondratiev incautiously proposes to designate also as cycles [emphasis added—SW], their character and duration are determined not by the internal interplay of capitalist forces but by those external conditions through whose channel capitalist development flows.”

Trotsky, in contrast to Krondratiev and later Schumpeter, denied the cyclical nature of the long-term fluctuations in capitalism as opposed to the cyclical nature of the short-term—10-year—industrial cycle. So what does lie behind the long-term fluctuations, according to Trotsky, is not some sort of cyclical mechanism.

“The acquisition by capitalism of new countries and continents, the discovery of new natural resources, and, in the wake of these, such major facts of ‘superstructural’ order as wars and revolutions,” Trotsky wrote, “determine the character and the replacement of ascending, stagnating or declining epochs of capitalist development. Along what path then should investigation proceed? To establish the curve of capitalist development in its non-periodic [emphasis added—SW] (basic) and periodic [emphasis added—SW] (secondary) phases and to breaking points in respect to individual countries of interest to us and in respect to the entire world market.”

So unlike Krondratiev or Schumpeter, Trotsky saw non-cyclical “accidental” causes behind the shifts from periods of rapidly expanding and stagnating capitalism. If new continents are opened to capitalist exploitation of natural resources—wealth created by nature—and the labor power of the people of those new continents, the pace of capitalist development would be expected to accelerate. Wars and especially revolutions, depending on their outcomes, also radically change the prospects for capitalist development, either by dramatically increasing new natural resources and/or labor power that is available for capitalist exploration, or making it more difficult or impossible for capital to exploit them.

I should note that when Trotsky speaks of “natural resources” he does not distinguish between natural resources that serve as raw and auxiliary materials in the sphere of production—oil for example—and money material such as the discovery of rich new gold mines. The discovery of new sources of money material has played no small role in the concrete history of the capitalist mode of production.

Marx himself held that the history of capitalism began with the discovery of rich gold and silver mines—money material—in the Americas during the 16th century. Adam Smith had observed that the deepening of the division of labor—the development of the productive forces depends under capitalism—the final absolute form of production as far as Smith and other bourgeois economists are concerned—on the expansion of the market, and not the other way around. (16)

This was a shrewd observation by Adam Smith, whose views—unlike those of his bourgeois successors—were not yet muddled by “Say’s Law,” which had yet to be “discovered.” And as I have already demonstrated, the expansion of the market ultimately depends on the production of money material.

Indeed, according to Marx the discovery of gold and silver in the Americas during the 16th century was the first step towards the creation of the capitalist world market and thus initiated the history of the capitalist mode of production.

Broadly speaking, however, Trotsky is right. The discoveries of new continents—something hardly to be expected in the future—can give a tremendous boost to capitalist production. (17)

If new sources of cheap raw and auxiliary materials are found, the organic composition of capital, all other things remaining equal, is lowered, therefore raising the rate of profit. The discovery of new gold mines—for example, the discovery gold in California and Australia between 1848 and 1851—can vastly expand the rate of growth of the market, making possible the realization of a much greater mass of surplus value than before.

And last but not least, if new populated continents are “discovered” by capital, this opens up the possibility of a great increase in the quantity of the commodity labor power creating the possibility of producing far more surplus value than before.

None of these processes represents a cyclical process.

Paul Sweezy on the long cycle

Near the end of his long career, Paul Sweezy expressed opinions on the “long cycle” that were close to the views expressed by Trotsky in 1923.

“Let me close,” Sweezy said in an address before the Harvard Economic Club on March 22, 1982, “with a few remarks about the relevance of the foregoing analysis to a subject to which economists have been devoting increasing attention in the last few years, i.e., whether or not the history of capitalism has been characterized by a long cycle of some fifty years’ duration (what Schumpeter called the Kondratieff cycle). First, we should be clear that the issue here is not whether capitalist development takes place in an uneven fashion with periods of rapid expansion being succeeded by periods of slow (or even no) expansion and vice versa—what have often been referred to as long waves. The empirical existence of long waves in this sense is undeniable [emphasis added—SW], and the ingenuity of statisticians operating with an almost infinite variety of possible statistical sources can be counted on to make out a case for a time sequence of accelerated and retarded growth rates compatible with the existence of an underlying cyclical mechanism.”

However, Sweezy himself did not think there was any evidence for the existence of a cyclical mechanism for the proposed long cycle: “But compatibility with the existence of a cyclical mechanism is entirely different from proof of the existence of such a mechanism. The reason for our acceptance of the idea that relatively short cycles exist (i.e., cycles of less than ten years’ duration, Schumpeter’s Kitchin and Juglar cycles) is that the mechanisms at work can be elucidated analytically as well as verified empirically. The important point is to be able to demonstrate that the two basic phases of the cycle, expansion and contraction, can each be shown to contain the seeds of its opposite [emphasis added—SW].”

Sweezy, much like Trotsky, saw no such mechanism for the proposed long cycle. I will deal with the non-cyclical reasons Sweezy gave for alternating periods of long-term prosperity and long-term depression in later posts where I will examine the 1930s Depression and the long post-World War II “boom” that followed it.

Ernest Mandel, in contrast, from the 1960s onward became increasingly interested in the proposed long cycle and looked at it with far more sympathy than either Trotsky or Sweezy did. I will examine his views on this issue in the next post.


1 An example would the industrial cycles that occurred between the panic of 1873 up until the year 1896. This period became known as the “Great Depression,” not to be confused with the later Great Depression of the 1930s. It was characterized by a strong secular downward movement of the general price level.

While there were periods of rising prices, they were much shorter than the periods of falling prices. Each successive peak in prices was lower than the previous peak, while each trough in prices was lower than the previous trough. This trend decisively reversed itself after the price trough of 1896. Supporters of the long cycle consider this period to be an example of a downturn in the long cycle.

Economic statistics on industrial production are quite scanty for this period, so it is debatable to what extent the periods of falling prices coincide with actual downturns in industrial production. The opponents of long cycles claim that though prices generally fell during the “Great Depression” of 1873-1896, industrial production and economic growth in general advanced rapidly in many countries during this period—for example, in the United States and Germany. Those economic historians who play down the significance of the “Great Depression” also claim that the “Depression” was marked by a strong rising trend in real wages in Britain, though it is widely admitted that U.S. farmers were hard pressed by the general falling prices of agricultural commodities and high debts that had to be paid in a currency of rising purchasing power during these decades.

2 I will examine this recession closely in a future post.

3 During the Depression years of the 1930s, workers in the United States employed on public works projects were counted as unemployed. Today, they would be considered employed. So if the rate of unemployment during the Depression in the United States were calculated by today’s methods, unemployment during those years would be considerably lower than the figures that are given in history textbooks and much closer to the official unemployment figures that prevail today.

4 A strong case can be made that the prolonged economic crisis of the 1970s, which some long-cycle supporters see as representing a downturn in the long cycle, began with the collapse of the gold pool in March 1968.

5 It has also been proposed that the “mid-Victorian boom” that set in immediately after the revolutions of 1848 and lasted until the panic of 1873 represented an “expansion” phase of the long cycle, while the the 1873-1896 “Great Depression” represented a downturn in the long cycle following the mid-Victorian boom phase. I will examine this episode in coming posts.

6 Or, if we want to go back to the 19th century, if there is no long cycle, what caused the “mid-Victorian boom” of 1848-1873, and why was it followed by the “Great Depression” of 1873-1896?

7 Marx was aware of two out the three cycles before they were described by the bourgeois economists who Schumpeter credits with discovering them.

8 Unlike other revolutionaries over the decades, Marx and Engels, though they of course greatly preferred revolutionary times, never denied a period of reaction when they were faced with it.

9 The crisis of 1857, though initially extremely severe, was short-lived and was not followed by a prolonged depression such as the one that followed the crisis of 1837. The latter depression has also been explained as a long-cycle trough by supporters of the long-cycle theory.

Contrary to expectations and hopes of Marx and Engels, the 1857 crisis did not lead to a resumption of the revolution of 1848. After the crisis of 1857, Marx and Engels abandoned their youthful view that the very next major global crisis of overproduction would automatically trigger a revolutionary situation, though this idea has lingered on in Marxist circles over the decades.

However, this mistake on the part of Marx and Engels was a fruitful one, since it caused the two friends to study economic developments in great detail during the 1850s as they looked for signs of an approaching crisis that they believed would quickly lead to a new European revolution.

Not only can we learn a lot about capitalist economic cycles by studying the published writings and letters of Marx and Engels during this decade, but Marx’s interest in political economy stimulated by the economic crisis of 1857 led him to begin work on what finally became “Capital.” Indeed, it was in the crisis year of 1857 that Marx made his greatest economic breakthrough, the distinction between labor and labor power, which finally unlocked the mystery of the origin of surplus value and overcame the biggest contradiction left over from Ricardian economics.

10 The revolution that broke out in February 1848 in France overthrew the so-called July Monarchy of French King Louis Philippe and ushered in the short-lived second French Republic. Louis Bonaparte an (alleged) nephew of Napoleon, won the French presidential elections that were held after the revolution. In December 1851, Bonaparte staged a coup that established himself first as dictator and a year later as Emperor Napoleon III. This regime known as the Second Empire lasted until the France’s defeat in the Franco-Prussian war of 1870. France’s defeat led to the overthrow of the regime of Napoleon III and its replacement by by the Third French Republic, which was to last to 1940. The Paris Commune of 1871, during which the working class for the first time established its own government—though limited to the city of Paris—was a byproduct of these events.

11 Nowadays “Kitchin recessions” are sometimes described by bourgeois economists and central bankers as a “mid-cycle slowdown.”

12 The last year has witnessed a classic demonstration of this phenomenon in the oil market, and other commodity markets as well.

13 Engels was writing almost at the bottom of the so-called “Great Depression” of the late 19th century. Supporters of the long cycle consider the “Great Depression” of 1873-1896 to be a downturn in the “long cycle.”

14 Parvus began as a left-wing Social Democrat—in the pre-1914 sense of the word. Despite his radical left Social Democratic views, he had a marked entrepreneurial bent. During World War I, he not only supported Germany in the war but became a wealthy war profiteer. He thus fell into disrepute among Marxist opponents of the imperialist war.

15 If readers of this blog have access to any of the writings of these early Marxists and can translate them into other languages and post them on the Web, this would be a tremendous contribution to those of us who are working towards the revitalization of Marxism in the 21st century.

16 During the epoch of manufacture proper, before the widespread introduction of machinery into production, the growth of the productivity of labor depended upon dividing up of labor into more and more specialized tasks. Therefore, when Adam Smith wrote about the division of labor, he was really referring to the development of the productive forces as such.

17 While new continents will certainly not be discovered in the future, there is speculation that it might be possible to mine asteroids and other extraterrestrial bodies in coming decades. It is therefore at least theoretically possible that such extraterrestrial bodies could become major new sources of raw and money material. Asteroids are believed to be rich in gold. Hopefully, by the time that the technology to mine extraterrestrial bodies is developed to carry out such mining operations, capitalism will have been transformed into socialism. In any case, these possibilities lie many decades into the future. And there is no chance whatsoever that any additional sources of human labor power will be found on any extraterrestrial solar system bodies.

As for planets orbiting around other stars, the law of special relativity discovered by Albert Einstein—which holds that no body with mass can move at the speed of light—almost certainly forever protects them against the exploitation of any earth-based capitalism.


3 thoughts on “Does Capitalist Production Have a Long Cycle?

  1. “Marx and Engels on Long Waves” is the title of an article I published in 1985. See Tibor Vasco (ed.), The Long Wave Debate. Heidelberg etc. Springer.

  2. I read the article, it is quite interesting (including the final reference to Brahms) but rather has little to do with long cycles, almost everything is about what M & E called “the industrial cycle” or “crisis cycle” with crises recurring about five or ten years.

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