The next Golden Age: Professor Carlota Perez

I’ve spent a little time recently buried in two different views about where we might be as an economy in the next 10 years or so. Both views are necessarily lax with regards to predicting exact timeframes, hence ‘or so’, but both are also mutually supportive, one providing the higher order framework that can enable the more logistic expression of the other (Doc Searl’s Intention economy).

So, to start with the higher order paradigm. Professor Carlota Perez claims to know how we can emerge from recession into a golden age of global prosperity. Which is nice.

Heady stuff, certainly. That’s some claim isn’t it. Indeed, from where I’ve been sitting for the last 6 years or so, I’ve not had sight of a future deserving of such grand declaration. Not even in my more optimistic moments. I sometimes feel as though we have been bombarded with a wall of global negativity, with very little seemingly, to evidence a return to collaborative and communal times, so it’s nice to know that there is an alternative out there to the doom and gloom.

Even the early signal and promise of the internet had become targeted and entangled by the old incumbent models, to the degree that I had begun to doubt that we might actually arrive at anything other than an illusion dressed up as a pretty, but nonetheless still walled, garden.

Right. A golden age. I have been reading an economist, the aforementioned Carlota Perez, courtesy of Confused in Calcutta (JP Rangaswami, chief scientist at whom I must once again identify as one of the most illuminating bloggers I have ever read).

Her ideas are bold and, so far as I can tell, robust. There is a part of me, a cynical part to be sure, that is waiting to see what i’ve missed, because it seems to me that she has nailed it.

The core idea is simple, which is that there are cycles within capitalism of technological innovation that last between 40 and 60 years. These cycles consist of 2 phases, an installation phase and a deployment phase, and are marked at the crossover point by a financial crisis, a bubble bursting. We are at that point now in the surge which is installing information technology as the standard, the 5th such cycle (started in 1971). We are yet, however, to emerge from recession.

Professor Perez has a lot to say very specifically about how we can get out of the recession and is quite clear as to what is required. The 2 different phases, installation and deployment, demarcate the transfer in roles between financial capital and production capital. Under the current free market ideology financial capital is ascendant, which is great for making things happen quickly and has enabled the maturity and installation of the information technology which will drive the next phase.

The next phase, the deployment phase, led by production capital which plays over the long haul, needs a significant expansion of markets and a wider deployment of the new technologies, to do exactly that (expand markets). It is, to oversimplify it, a time when it is wiser to move from monopoly to oligopoly as a dominant form, and from private ascendancy to state ascendancy. Think of the post war road building schemes in the US, which helped suburbanisation and the rise in mass markets. That was only possible via government intervention.

I’m not going to say much more, because she can say it much better herself. I can not suggest more strongly that it is worth looking at her ideas.

Hopefully you will look into what she is saying in more detail. The following links are to slideshare presentations, which I have found to be a surprisingly effective way to understand her ideas.

The talks she gives are somewhat enticingly named don’t you think? This is the first cohesive view I’ve seen about what we should be doing now and where it can lead.

Universal Internet Access and Sustainable Growth

Building a sustainable global golden age for overcoming the crisis

The Direction of Innovation after the Collapse – ICT for Green Growth and Development

Modernising Government to Shape a Better Future


3 Comments on “The next Golden Age: Professor Carlota Perez”

  1. […] is how the deployment phase of Carlota Perez’s long cycle economic theories will play out. She has been very specific in her statements that the expansion of new markets will […]

  2. […] Firstly we have a global capital investment paradigm that is focused on the needs of finance capital not production capital. This so called casino approach to capitalism, and its relationship to production capital, is best understood through the analysis of Carlota Perez in her stunning, and surprisingly accessible, Technological Revolutions and Financial Capital. This is a very quick summary of her ideas. […]

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