The Dynamics of Bubbles and Golden Ages
Chapter 8: Maturity: Financial Capital Planting the Seeds of Turbulence at the End of the Previous Surge
Maturity: Planting the Seeds of Turbulence 81 8. Maturity: Financial Capital Planting the Seeds of Turbulence at the End of the Previous Surge The preparation for the big-bang of each technological revolution occurs in the very contradictory context of the previous maturity phase, though some of the contributing technologies could have a long previous history. Maturity is the end of the deployment period. As discussed before, it is a phase that combines signs of exhaustion in many of the original core industries of the prevailing paradigm, with very high growth rates in the last few new industries within that same paradigm. While the older industries find it difficult to increase productivity or markets, the success of the newer ones is marred by the rapidity with which they reach maturity and saturation. The accumulated experience and the already well-developed infrastructure and business practices create very favorable conditions for the fast diffusion of the last products and industries exploiting the established externalities. They are also routinized enough to make it relatively easy to begin spreading out geographically, reaching for peripheral markets or for lower-cost production. Financial capital, which after the successful experience of the synergy phase had re-established the habit of profitable cooperation with production capital, is behind the swift flourishing of the last sectors and the last regions. It also accompanies the most powerful firms in their attempt to prop up their threatened profits. These firms have by now become huge and are facing increasing difficulty in finding fruitful investment for...
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