The Dynamics of Bubbles and Golden Ages
Chapter 11: The Turning Point: Rethinking, Regulation and Changeover
114 Technological Revolutions and Financial Capital 11. The Turning Point: Rethinking, Regulation and Changeover The recessions that follow Frenzy – and the crashes that usually usher them in – are both the consequence of an untenable set-up. By the time the collapse occurs, the conditions are there for the deployment period to begin, but the system has been operating under fundamental structural tensions that, once the breakdown finally occurs, can only be overcome through institutional recomposition. When the installation period ends, about mid-way into the unfolding of each technological revolution, its paradigm has triumphed and is ripe for widespread diffusion. By then, the main dynamic products have been identified and the dominant designs determined, their industries are structured and well connected with one another, the infrastructure is basically in place and the consumption patterns are pretty much defined. The ‘common sense’ of the paradigm has diffused enough – and proven its power sufficiently – to be basically installed in people’s minds as the new best practice. The potential for production and productivity growth is considerable. What is needed for its realization is a new space for the unhindered expansion of markets, favoring economies of scale and fostering a wave of new investment. All is poised for the dynamic expansion of the real economy and for the propagation of the paradigm across all industries, weaving a coherent production network. This build-up task would be better performed under the control of production capital, given that its interests and decision-making criteria are more appropriate for the job....
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