In 1989, I tried to relate or causually tie together scientific revolutions in physics and the Kondratiev economic long wave. Major paradigm shifts in physics do cause economic depressions, and I am presenting a book I wrote about 3 decades ago that explains the causal model for the long waves and contains accurate economic predictions thus far. This definitely is a period of time that can be called a Kondratieff trough or dip, and it now looks like it will last for more years around the world; but the US might prosper remarkably if the pro-industry and national independence policy trends of the last 4 years are continued.
Thirty Year-Old Book
This book puts forward a theory for explaining economic depressions as due to technological change and explains evidence for this view. Predictions were verified, and scholars independently described some similar theoretical points. One of the major medium-term predictions of my book and general economic model was that the decades of the 2010s and the 2020s would experience a 1930s type of depression associated with rapid automation, accelerating productivity growth rates in the industrially advanced economies, record unemployment, and a very large number of personal, corporate, and bank bankruptcies.
Thirty years ago, the theory accurately predicted the timing and scale of the productivity growth spurt of the late 1990s and the timing of the onset of this current depressionary period. I was predicting that the productivity growth rate would suddenly double about the year 2000 as it did around 1920 in the US and 1820 in Britain. This event happened about the year 1999.
According to Joseph Waters, it was Jaroslav Vanek (Waters, 1977 in his Acknowledgements) who originally proposed the connection between technological acceleration and the Great Depression. Waters published his thesis concerning this relationship in 1977 titled Technological Acceleration and the Great Depression. Waters emphasized that the causes of the 1920 doubling of the labor productivity growth rate in the US were the conditions also causing the ensuing 1929 financial crash and the long depression. However, I don’t think he well understood what the causes were. I think the book explains the causes better.
This book was written mainly from 1990 to 1993, and it is available for reading on my site. This useful book has both history of science and economics theory. The history of science chapter contains a description of the development of ball lightning and plasmoid theory and the scientific events leading up to the paradigm shift and the new paradigm.
Readers may be familiar with my articles and published Letters about ball lightning, microplasmoids and cold fusion/transmutation. I published several articles in Infinite Energy magazine, and in the past year or so, I published two Letters to the Editor and one long article about microplasmoids in the magazine (1,2,3).
A long time ago, in May of 1998, I also published a detailed Letter to the Editor of this magazine that contained short and long-term detailed predictions about the scope and characteristics of a depressionary or deep recessionary period that I believed the world economies were going to experience imminently. I sent in the article for publication in December of 1997, and the massive 1929-style banking and financial collapse I warned about started within a year. The economic predictions are based on the idea that scientific revolutions in physics and related hard sciences happen cyclically with an 80-year average timing.
I described the reasons for this timing in my book. I present a model for how the paradigm shifts in science caused what is known as the economic long wave or “Kondratiev wave.” This idea is a model that explains the 40 or 50 year cycle of economic booms and recessions/depressions in advanced economies causally.
Using this model, in the early 1990s, I predicted a big 1929-type financial crash with a depressionary era lasting a decade or more that would start around the year 2010. This is exactly what happened. If you go to this link (http://www.scientificrevolutions.com/oldsite/LewisLetter79.pdf), you can see the Letter to the Editor of Infinite Energy Magazine that I wrote in 2007. It is called “Economic Depression or Deep Recession Likely Soon.”(4)
The Current Kondratieff Slump
Starting in 2008, the bank failures and corporate and personal bankruptcies did happen following the 1930s pattern, but I didn’t foresee that the central bank and lending institutions would create so much extra debt that they could keep the US population consuming at the level they had become accustomed to during the previous 8 years from 2000 to early 2008. This forestalled major poverty in the US. For the first time in US history, the government incurred about a 10 trillion dollar debt during peacetime and stimulated spending and personal/corporate grants and loans from 2008 to 2012 to keep the US from falling into the extreme poverty of the 1930s.
After 2012, there were an additional trillion or so of deficits added annually. However, this year of 2020, about an extra 4 or 5 trillion or so might be added by the end of the year for stimulus, aid, and dealing with the epidemic. The total debt of the US is approaching 30 trillion after being a few billion only 17 years ago! This is extreme, unprecedented expense to keep the people from feeling the effects of this long depressionary era. Many other countries did the same thing.
With its large deficit spending, the US economy is presently faring better than most around the world during this long, deep depressionary era. Most Americans are still able to maintain their standard of living. The book explains that the main driver putting economies into this long wave depression is the automation of production and the satiation of consumer demand for the categories of products that are available in this era.
The large debts that are being incurred by corporations, governments, and the public are another important factor. Of course, the current epidemic is an added strain all over the world. I expect that this deep recessionary or depressionary era will continue on for years, but the US might fare better than other developed and developing countries. Internationally, I think this depressionary trough might be long and mirror the international economic troubles of the period from 1830 to 1865.
Reasons for US Prosperity during the World Depression or Deep Recession
Until early this year, the Trump administration’s industrial expansion policies, deregulation, tariff walls and other policies such as promoting domestic oil production, mining, and technological advancements were encouraging both Americans and foreigners to produce and source locally and invest in the stocks and American industry. The stock market reached record highs, and the US is by far the world’s largest producer of energy so that energy prices are historically low.
I believe that if Trumps’ initiatives were continued, the US will actually prosper through the next few years of this long wave dip. This is counter-intuitive and might not even make sense to people since the ideas seem contradictory, but their are good reasons to expect even further growth and development during this depressionary economic environment and world epidemic. I think the relative prosperity of the US during the months that Europe and much of Asia headed into a recession around the turn of the year is evidence of the growth potential of the US economy.
The US has potential for growth compared to the other industrialized countries in the 2020s. There is much potential for reindustrialization if policies favor it. The US might do remarkably well by reindustrializing and becoming more self sufficient and export oriented instead of being as import dependent as it was only several years ago.
Also, the US will probably do better at handling this epidemic due to several advantages in the long term. The US is handling this epidemic better than most. Though the number of deaths in the US seems high, over 250,000 at the time of time of this writing, when compared with the rest of the world and taking into account that the US tests more widely than almost any country and that people are more likely to be counted as virus victims in the US than they would be in most other countries, the death rates are low. Mortality is decreasing due to various medicines and because hospitals have learned how to treat the sick patients better. In comparison, Mexico is a much smaller country but over 100,000 deaths have been recorded.
I think that the US might handle the epidemic better than most countries due to the high-tech infrastructure and the relatively open reporting. Some countries such as China that are severely affected by the epidemic hide the death tolls and don’t report the number of cases. China still claims only 4,700 total deaths in their huge population. Small countries such as Belgium with advanced medical technology report far more deaths!
Of the world’s economies, the US might perform the best. The epidemic is encouraging and even rewarding domestic production development, and Trump’s trade policies encouraged production in the US of everything from energy and raw materials to industrial products to agricultural products. Simply by threatening to raise import barriers of the same scale that the other big economies such as China and the EU trading bloc countries already had set up to shield themselves, Trump negotiated better trade relationships.
So, the US may reindustrialize and become more self sufficient if the government will further promote US trade with the Asian countries and tackle the difficult trading relationships with the EU trade bloc and other issues. With a very large domestic population, the world’s most advanced scientific base, plentiful cheap energy, untapped natural resources, and plenty of potential for industrialization and domestic production of products that were imported, the US might actually prosper if Trump’s administration and policies continue.
The countries that handle the situation the best will attract capital and skilled labor. Much of the rest of the world is encumbered by heavy debt loads and will not do as well during this Kondratieff trough. They won’t be able to compete as well.
I hope this model and book help readers to understand scientific and economic development better as well as understand the history and background of the cold fusion field.
1) Microplasmoid Phenomena: Detection, Shielding and Control, Letter to the Editor, Infinite Energy, issue 149, January/February 2020.
2) “Strange Particles” Plasmoids and the Need for a Paradigm Change in Physics, issue 147, September 2019.
3) Plasmoid Health Warning Letter, Letter to the Editor, issue 145, May 2019.
4) Economic Depression or Deep Recession Likely Soon, Letter to the Editor of Infinite Energy Magazine, Issue 79, p. 7, May 2008.
See site: http://WWW.SCIENTIFICREVOLUTIONS.COM and details about reading the book under the book tab in the links bar.
Edward Lewis firstname.lastname@example.org