The Great Depression. (Photo credit: Wikipedia)
In the 1930s, the US was in the midst of its Great Depression. The Soviet Union cheered. Communists viewed our Depression as evidence that the capitalist system was dying and communism would soon rule the world.
Russian economist Nikolai Kondratiev (A.D. 1892 –1938) disagreed. He advanced the theory that Western economies have long-term, 40-to-60-year business cycles. These business cycles look like sine waves. In broad strokes, these waves generally include about 25 “good” years when the economy is expanding a little or a lot (economic “boom”), followed by 25 “bad” years when the economy is contracting a little (recession) or a lot (depression).
According to Kondratiev, the Great Depression was merely a predictable—and temporary—low in the US economy’s business cycle. As such, the Great Depression did not signal the end of capitalism nor the triumph of communism. The Soviet government rewarded Mr. Kondratiev for his politically-incorrect research by executing him.
(Apparently, Kondratiev’s execution served as a valuable lesson to all subsequent economists. Those who want to stay healthy, also stay politically-correct. Those who dare to tell the truth do so only with such a convoluted use of language, graphs and mathematics that no one can understand what they’re saying. Better to be a live economist than a dead teller of truth.)
In any case, the former Soviet Union has also been “executed” and joined Mr. Kondratiev in death–but Kondratiev’s view of business cycles has survived.
