The Long‐Wave Cycles and Re‐industrialisation

The “re‐industrialisation” of America is the dominant topic today. It has come about because the United States economy did not live up to its expectations during the decade of the 1970s. As to what has caused such low economic performance, many speculations have been advanced, such as big government, high taxes, monetary maladjustments, the energy shortages, the high prices of energy, etc. However, one group of economists have attributed the dismal economic performance during the 1970s to the phenomenon of the “long‐wave cycles”. This cycle is also called the Kondratieff cycle, and occurs at intervals of forty to sixty years in a socio‐economic system resembling that of capitalism. According to the proponents of this theory since the last part of the eighteenth century, industrial capitalism has exhibited long waves of cyclical fluctuation in income, employment and prices. These economists believe that the “long‐wave cycles” are what have underlined recent United States economic ills.