The Dynamics of Bubbles and Golden Ages
Chapter 9: Irruption: The Love Affair of Financial Capital with the Technological Revolution
90 Technological Revolutions and Financial Capital 9. Irruption: The Love Affair of Financial Capital with the Technological Revolution A. Coexistence of Two Paradigms; Coexistence of Two Behaviors The beginning of each great surge has been identified here with the irruption of a technological revolution and, for practical purposes, the birth has been dated at a single symbolic event which represents the big-bang of that potential universe of opportunities. But obviously such discontinuities can only be really identified with hindsight. The initial events occur in restricted spaces. As seen by most contemporaries, even if they often make front-page news, their multiple implications are visible mainly to an entrepreneurial minority. Elsewhere there is continuity, with perhaps an inkling of threat. So, in the present scheme the final phase of the life cycle of a paradigm is being treated separately from the initial phase of the next. This is only an analytical device. It cannot be overemphasized that, in real life, everything that was described for the maturity phase continues in the background, sometimes even in an exacerbated manner, for practically the whole duration of the phase that will be discussed now.107 This is why, in the irruption phase, aggregate measures can be particularly deceptive. Trends in many economic variables, such as growth, productivity, employment, investment and profits are internally divergent. This long period of coexistence of two paradigms is a bifurcation in the production structure, dividing the dynamic new from the obsolescent old. It is also a period of bifurcation in that...
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