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Appendix G to Money and Sustainability: The Missing Link
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1
Money and Sustainability: Appendix G
In 1926, Nicolai Kondratieff (1892-1938), at that
time the head of Russia’s Economic Research
Institute in Moscow, published a technical paper
in a German statistical journal documenting the
discovery of a 60-year ‘long wave’ in modern economies,
starting in the eighteenth century. 1 On this basis, he forecast a
depression period for the 1930s, at the completion of the third
Kondratieff wave. Although a communist himself, he opposed
the Stalinist elimination of the market mechanism, resulting in
him being sent to Siberia and executed for ‘anticommunist
agitation’.2 Joseph Schumpeter, and Nobel laureates Simon
Kuznets and Jan Tinbergen have substantiated the validity of
Kondratieff’s findings. It has also become clear that the
Kondratieff cycle is not just an economic phenomenon, but is
driven by technological and societal shifts. Figure 7.2
represents schematically the five waves already experienced so
far, as well as the sixth, expected to play out over the next
decades.3 Each long wave relates to a technological breakthrough called a ‘core innovation’
initially working itself through the economy as a powerful growth carrier. As its effect on the
economy wears out, an economic downturn occurs and the impact of the next core innovation
begins to manifest.
1 Kondratieff, N. “Die langen Wellen der Konjunktur” Archiv für Socialwissenschaft und Socialpolitik 1926.
2 Harry Maier, “Wellen des Fortschritts”, Die Zeit, 19 March 1993.
3 Nefiodow (2001) p.133.
Kondratieff and the ‘Long Wave’
2
Starting around 1800, the first Kondratieff wave was triggered by the steam engine and textile
machinery automation and bottomed out around 1850. The second wave relates to steel and
railroads shortly followed ending in 1890 and so on. (See Figure G.1.)
Leo Nefiodow, one of today’s foremost researchers on the long cycle, forecasted the peaking-off of
the fifth Kondratieff wave, related to Information Technologies, during the late 1990s.4 This
occurred in Asia by the mid-1990s, and in Europe and the US a few years later. In 2006, the same
author published his forecast for the sixth Kondratieff wave, which will take place during the first
decades of the twenty-first century.5 He reports four findings that are directly relevant for Wellness
Tokens. (Wellness Tokens are discussed at length in Chapter VII of Money and Sustainability: The
Missing Link.)
First, the next wave will be based on what he calls ‘psychosocial technologies’, or individual,
community and environmental healing processes. The difference of this sixth wave compared to
the previous five is that for the first time, the core technology would not primarily be rooted in the
material and quantitative realms. Social and qualitative change in human and environmental
conditions would predominate instead.
Second, the best way for a country to reduce the pain of the transition from any one of the waves
to the next is to invest early in the next wave’s core technologies. This will ensure that new
workplaces are created in markets created by the new wave, while jobs in the markets of the old
wave are scaled down. Similarly, private investment in core technologies of this transition will
allow one to be ‘carried by the wave’. It is analogous to investing, for instance, in railroads and
steel in the 1850s, in Ford Motor Company or GM in 1935 or in IBM and Microsoft in 1980.
Third, a new wave always integrates the strengths of the old one as a tool for its transformation: in
our case, this means that the sixth wave will build on the information technologies of the fifth one.
Finally, the skills that most need development for this specific sixth wave are those of cooperation
and interpersonal communication.
If Nefiodow is right, the best areas to invest in today are the technologies supporting the move
towards ‘integral wellness’ thanks to ‘psychosocial health’ technologies. Wellness Tokens are one
way to achieve this. They are taking advantage of the new means developed during the Fifth Wave
through IT and mobile phone technologies. And they address an issue that is otherwise doomed to
grow predictably to unprecedented levels over the next decades.
4 Nefiodow (1991) and (1994).
5 Nefiodow (2001)
3
Figure G.1: The six Kondratieff cycles, their corresponding ‘core technologies’ and the societal domain in
which they predominantly express themselves. The sixth Kondratieff wave, the one that will be driven by
technologies providing ‘Integral Wellness’, is expected to become dominant during the first decades of the
twenty-first century. 6
This is Appendix G to
Money and Sustainability: The Missing Link. To read more about the book or to order a copy, visit:
http://bit.ly/TPMissingLink
6 Each wave is generated through the interaction of the previous wave with the next wave. The dates marked at the
bottom of each wave correspond in reality to the end of the previous Kondratieff wave, not the beginning of the
next wave. Nefiodow (2001) p.xxx.
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