The next Great Depression

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Op zaterdag 18 oktober 2008 12:47 schreef gebrokenglas het volgende:

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Is dat ook de reden dat de FED eind septemer in de eerste paar dagen van de crash per dag honderden miljarden in de geldmarkt injecteerden? Dat ging zo rap toen...
(dat was nog voor Bush' reddingsplan met belastinggeld).

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The Depression: A Long-Term View

by Immanuel Wallerstein

The depression has started. Journalists are still coyly enquiring of economists whether or not we may be entering a mere recession. Don't believe it for a minute. We are already at the beginning of a full-blown worldwide depression with extensive unemployment almost everywhere. It may take the form of a classic nominal deflation, with all its negative consequences for ordinary people. Or it might take the form, a bit less likely, of a runaway inflation, which is simply another way in which values deflate, and which is even worse for ordinary people.

Of course everyone is asking what has triggered this depression. Is it the derivatives, which Warren Buffett called "financial weapons of mass destruction"? Or is it the subprime mortgages? Or is it oil speculators? This is a blame game, and of no real importance. This is to concentrate on the dust, as Fernand Braudel called it, of short-term events. If we want to understand what is going on, we need to look at two other temporalities, which are far more revealing. One is that of medium-term cyclical swings. And one is that of the long-term structural trends.

The capitalist world-economy has had, for several hundred years at least, two major forms of cyclical swings. One is the so-called Kondratieff cycles that historically were 50-60 years in length. And the other is the hegemonic cycles which are much longer.

In terms of the hegemonic cycles, the United States was a rising contender for hegemony as of 1873, achieved full hegemonic dominance in 1945, and has been slowly declining since the 1970s. George W. Bush's follies have transformed a slow decline into a precipitate one. And as of now, we are past any semblance of U.S. hegemony. We have entered, as normally happens, a multipolar world. The United States remains a strong power, perhaps still the strongest, but it will continue to decline relative to other powers in the decades to come. There is not much that anyone can do to change this.

The Kondratieff cycles have a different timing. The world came out of the last Kondratieff B-phase in 1945, and then had the strongest A-phase upturn in the history of the modern world-system. It reached its height circa 1967-73, and started on its downturn. This B-phase has gone on much longer than previous B-phases and we are still in it.

The characteristics of a Kondratieff B-phase are well known and match what the world-economy has been experiencing since the 1970s. Profit rates from productive activities go down, especially in those types of production that have been most profitable. Consequently, capitalists who wish to make really high levels of profit turn to the financial arena, engaging in what is basically speculation. Productive activities, in order not to become too unprofitable, tend to move from core zones to other parts of the world-system, trading lower transactions costs for lower personnel costs. This is why jobs have been disappearing from Detroit, Essen, and Nagoya and factories have been expanding in China, India, and Brazil.

As for the speculative bubbles, some people always make a lot of money in them. But speculative bubbles always burst, sooner or later. If one asks why this Kondratieff B-phase has lasted so long, it is because the powers that be -- the U.S. Treasury and Federal Reserve Bank, the International Monetary Fund, and their collaborators in western Europe and Japan -- have intervened in the market regularly and importantly -- 1987 (stock market plunge), 1989 (savings-and-loan collapse), 1997 (East Asian financial fall), 1998 (Long Term Capital Management mismanagement), 2001-2002 (Enron) -- to shore up the world-economy. They learned the lessons of previous Kondratieff B-phases, and the powers that be thought they could beat the system. But there are intrinsic limits to doing this. And we have now reached them, as Henry Paulson and Ben Bernanke are learning to their chagrin and probably amazement. This time, it will not be so easy, probably impossible, to avert the worst.

In the past, once a depression wreaked its havoc, the world-economy picked up again, on the basis of innovations that could be quasi-monopolized for a while. So, when people say that the stock market will rise again, this is what they are thinking will happen, this time as in the past, after all the damage has been done to the world's populations. And maybe it will, in a few years or so.

There is however something new that may interfere with this nice cyclical pattern that has sustained the capitalist system for some 500 years. The structural trends may interfere with the cyclical patterns. The basic structural features of capitalism as a world-system operate by certain rules that can be drawn on a chart as a moving upward equilibrium. The problem, as with all structural equilibria of all systems, is that over time the curves tend to move far from equilibrium and it becomes impossible to bring them back to equilibrium.

What has made the system move so far from equilibrium? In very brief, it is because over 500 years the three basic costs of capitalist production -- personnel, inputs, and taxation -- have steadily risen as a percentage of possible sales price, such that today they make it impossible to obtain the large profits from quasi-monopolized production that have always been the basis of significant capital accumulation. It is not because capitalism is failing at what it does best. It is precisely because it has been doing it so well that it has finally undermined the basis of future accumulation.

What happens when we reach such a point is that the system bifurcates (in the language of complexity studies). The immediate consequence is high chaotic turbulence, which our world-system is experiencing at the moment and will continue to experience for perhaps another 20-50 years. As everyone pushes in whatever direction they think immediately best for each of them, a new order will emerge out of the chaos along one of two alternate and very different paths.

We can assert with confidence that the present system cannot survive. What we cannot predict is which new order will be chosen to replace it, because it will be the result of an infinity of individual pressures. But sooner or later, a new system will be installed. This will not be a capitalist system but it may be far worse (even more polarizing and hierarchical) or much better (relatively democratic and relatively egalitarian) than such a system. The choice of a new system is the major worldwide political struggle of our times.

As for our immediate short-run ad interim prospects, it is clear what is happening everywhere. We have been moving into a protectionist world (forget about so-called globalization). We have been moving into a much larger direct role of government in production. Even the United States and Great Britain are partially nationalizing the banks and the dying big industries. We are moving into populist government-led redistribution, which can take left-of-center social-democratic forms or far right authoritarian forms. And we are moving into acute social conflict within states, as everyone competes over the smaller pie. In the short run, it is not, by and large, a pretty picture.

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Op zaterdag 18 oktober 2008 14:36 schreef icecreamfarmer_NL het volgende:
Ik mag hopen van niet

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Op zaterdag 18 oktober 2008 @ 00:08 schreef henkway het volgende:

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maar, met Pauw en Wiitteman zag ik Vermeend en die had en heel dom plan over windmolens,waar ik wel veel in zie is het aanleggen van en super glasvezelnet in Nederland.

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Op zondag 19 oktober 2008 12:28 schreef zakjapannertje het volgende:
Wallerstein is van mening dat het huidige Amerikaans-kapitalistisch systeem niet meer voldoet en vervangen gaat worden door een nieuw systeem, hij verwacht voordat er een nieuw systeem is ontstaan vooral politieke onrust en een zero-sum game waarbij protectionisme een grotere rol gaat spelen
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http://mrzine.monthlyreview.org/wallerstein161008.html

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Op woensdag 26 november 2008 22:26 schreef digitaLL het volgende:

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Bron
Ben benieuwd of dit weer een stevige bear market rally is

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Op donderdag 27 november 2008 09:45 schreef teknomist het volgende:
Volgens de Kondratieff-theorie staat er inderdaad een depressie voor de deur.

[ afbeelding ]

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Op donderdag 27 november 2008 09:53 schreef shilizous_88 het volgende:

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Wat zou het toch mooi zijn als een grafiekje de toekomst kon voorspellen

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Op donderdag 27 november 2008 10:17 schreef teknomist het volgende:

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Het zou helemaal niet mooi zijn als we deze grafiek kunnen extrapoleren.

Ach, we zullen zien of deze theorie wordt bevestigd.

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Op donderdag 27 november 2008 12:00 schreef teknomist het volgende:
Ik ben ook blij met een marktcorrectie, een gezonde marktcorrectie. En wat is gezond? Een recessie zie ik in principe ook als een goed iets - ongeacht of het mij persoonlij raakt of niet. Maar op een diepe depressie zit ik niet te wachten.

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Op donderdag 27 november 2008 12:14 schreef shilizous_88 het volgende:

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Nederland exporteert nog steeds heel veel en doet aan waardecreatie, dus ik verwacht dat dat wel meevalt.
Zelf woon ik op het moment in Engeland en ik heb geen idee wat Engeland exporteert, maar het is echt weinig.
http://www.statistics.gov.uk/cci/nugget.asp?id=199
Dat gaat op de lange termijn echt problemen opleveren en dan zie ik het met Nederland nog relatief meevallen.

Een diepe recessie is een mogelijkheid, maar andere landen worden dan veel harder getroffen dan Nederland.

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Op donderdag 27 november 2008 12:21 schreef teknomist het volgende:

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Nederland is een hele open economie; dus wat er in het buitenland gebeurt heeft veel invloed op ons.
Neem alleen de logistieke sector in Nederland alleen al. Ik zou dus niet te snel juichen.

Het beste wat Nederland kan doen is alle drugs legaliseren, uit de EU stappen en drugsproducerend land no.1 worden!

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Op donderdag 27 november 2008 12:14 schreef shilizous_88 het volgende:

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Nederland exporteert nog steeds heel veel en doet aan waardecreatie, dus ik verwacht dat dat wel meevalt.
Zelf woon ik op het moment in Engeland en ik heb geen idee wat Engeland exporteert, maar het is echt weinig.
http://www.statistics.gov.uk/cci/nugget.asp?id=199
Dat gaat op de lange termijn echt problemen opleveren en dan zie ik het met Nederland nog relatief meevallen.

Een diepe recessie is een mogelijkheid, maar andere landen worden dan veel harder getroffen dan Nederland.

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Op donderdag 27 november 2008 15:02 schreef DiRadical het volgende:

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Nederland is een doorvoerland.
We exporteren veel omdat we veel importeren.
Niet omdat we veel maken.

We exporteren bijna alleen maar naar andere EU landen en dan met name naar Duitsland.
Als het slecht gaat met Nord Rhein-Westfalen, gaat het ook slecht met ons.

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Op dinsdag 14 oktober 2008 20:58 schreef Wheelgunner het volgende:
Depressie gaat om een krimp van de economie, niet om een krimp van de beurskoersen.

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Op donderdag 27 november 2008 09:45 schreef teknomist het volgende:
Volgens de Kondratieff-theorie staat er inderdaad een depressie voor de deur.

[ afbeelding ]

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Op dinsdag 23 december 2008 22:15 schreef SuperPolm het volgende:
Welke mensen hadden in de Grote Depressie nog een baan?

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Op dinsdag 23 december 2008 22:16 schreef henkway het volgende:

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