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Kondratieff versus Close

Nicolai Kondratieff (1892 – 1938) introduced a theory about cycles of 50 to 60 years in capitalist economics. The cycles show a sinusoidal shape that can be divided into four different “seasons”: prosperity, recession, depression and improvement.

Those of you who know my model of human complexities (see below) will also recognize the same four situations or states, named in a similar but different way and also following each other in a chronological way, despite human tendensy to counteract the flow in certain stages. Rather than showing a sinus timeline I show a cyclic movement that evolves into an evolutionary spiral (not drawn in this particular drawing that represents just a single cycle showing the phases we go through).

moral complex1

Human Complexities

Using my own model I relate a number of human variables to the cyclic experience, as individuals and as communities. Each phase and change among them has much to do with the human psyche which would explain the linear fluctuations in time in both the Kondratieff and my (Close) model. We can also  map generations on both models to see where they stood in relation to economic development or recessions and what emotional or cultural environment supported each phase. In the Kondrakieff sinus this is easily done against very specific chronological data. It is easy to plot also very specific events as points of reference, s.a. World War II for instance.

The points of reference help to relate the different models by synchronization in time and region. World War II got us (large parts of Europe) into a state of chaos for instance. It would be a “starting” point in my model due to the time reference that can also be further extended to a specific regional location. This you can read for Holland, Spain and the USA in chapter 11 of my ebook on the Global Shift (2011)

Then we could observe how generations evolve, one after the other, with the effects of the cycles of human complexities and the Kondratieff sinus of economic seasoning on them. In my model I show that people who grow up in a situation of wealth are being educated accordingly. This means that we are being educated with wealth as a matter of fact. I remember my own growing up phase in the midst of the post war culture of prosperity of the late 60’s early 70’s in Holland. We all wanted to be a millionair by the age of 30. What we were really doing was to create our own crises by mere cultural mentality caused by the environment in which we lived. Generations follow each other up every 20 to 25 years which would show another sinusoidial wave based on culture and mentality following Kondratieff in a different phase. We could probably draw the technological peaks with the mentality ones on the models, just to see how they influence each other.

In my model I do not relate necessarily to periods of 50 or 60 years for one cycle to complete as this may have to do with administrative economics rather than human (generational and environmental) complexities. I have even suggested that in prehistorical times a complete human complexities cycle could take hundreds or even thousands of years, affected more by natural environmental periods of abundance, interaction with hostile encounters or the chaos produced by natural disasters. When we look at the Chinese dynasties a direct link can be made with such cycles. Economics did not exist nor did therefor the Kondratieff sinus. My model did apply though.

Only now, the recent few hundred years we have found the cycles shorten to such an extend that we live through one or two complete cycles in an entire lifetime. My model hence relates to environmental circumstances (culture, war, periods of peace, nature, catastophes, crises, etc) as key influencial factors on human behavior and a historical clear reference with which we can relate human reaction and evolution both technologically and socially.

My model also introduces the line of sustainable human progress along which the traumatic human events can be plotted. This is new in any documentation. I use my transition phases (greed and enlightenment) while economists would only refer to entering and leaving the chaos quadrant as two seperate phases (bull and bear markets respectivily). The line of sustainable human progress is an evolutionary straight line that moves from chaos to wealth and beyond. The transition phases (greed gets us back into chaos and enlightenment gets us back to organized wealth) can also be seen in the sinus of Kondratieff.

Transformation of greed to wealth

Transformation of greed to wealth

Kondratieff shows an organic human logic in time phases with a build up of technological highlights and the economic effects. The same complex origin for progress can be found in the human complexities (psychology, education, culture) within the phase of chaos (war, depression) and enlightenment (the left hand side of my model). Humankind apparently needs stress to be inventive while in times of wealth and greed little to nothing new is added. Instead we see then an increase in risk avoidance, bureaucracy and hierarchies, which translates into a measureable increase in costs of society. This is also the reason of sudden collapse into a recession in cycles of about 7 years (domino effect).

  • Year 1: market crisis (consumer crisis for whatever reason)
  • Year 2: business crisis (expected turnover not reached)
  • Year 3: government crisis (expected tax income not reached)
  • Year 4: government dependent instances crisis (education, police, etc)
  • Year 5: business downsized, fused, innovated, went broke..builds up again
  • Year 6: government gets more tax income
  • Year 7: government dependencies get more air

During those seven years all economic institutions go through reorganizations, eliminating bureaucracy and trying to open themselves up for innovation. Costs are eliminated and they are downsized, renewed their structures to get a positive impulse. The impulse gets everything into a new investment round that results in 7 perceived good years and then it starts falling back again. This would suggest that the traditional 7 bad years, 7 good years, 7  bad years, 7 good years could be expalined in a sinusoidal wave of 49 years. With economics we created an artificial environment that shows a more organized sinuswave than when interacting with the multidimensional complexity of nature and the chaotic tribal confrontations of the past.

Sometimes the economic years are stretched a bit after a capital injection, an overenthusiastic increase of national debt, etc. The figure we see returning all the time (“about 50 years” – equivalent to an ancient average generational lifetime) is just a logical reflection of our administrative economic organization of one natural year and our human “perception” of what we believe is good or bad. This would also suggest that if we would half the administrative year or extend it to two years we would see the waves shorten and lengthen respectively. This may be something for further study by someone even though natural seasons may still have some significance in our, otherwise highly automated artificial productivity.

It also has to do with our fragmented structure of society along a chain of economic dependencies. If we set up society differently (eg a Sustainocracy) then the economic world would never collapse. Sinusoidal waves would not exist because we eliminated the duality in our progress by concentrating on a single higher common purpose (sustainable human progress) with highly flexible, dynamically adaptive non fixed, hierarchical organizations. We unite our knowledgeable awareness with our adaptive productivity towards a permanent never ending goal.

What the Kondratieff model does not foresee is the piling up of an exponential curve within the current artificial sinusoidal. This is effect is caused in the last 40 years after the liberation of money for speculation around shortages by the entire, global institutional world. It coincides with the “information technology” era of the 5th Kondratieff wave, which is why it confuses the analysts. Taking also the limited Earth resources into account, the dip of the 5th Kondrakieff wave coincides with my crossing over from greed to chaos and a point of singularity of overall financial collapse.  

The creditcrisis of 2008 has been just a warning signal. Banks will never recover despite the huge capital injections and government finances collapse all together. The Kondratieff’s winter and my model’s point of chaos are this time expected to be more dramatic then ever, making the Russian natural winter feel warm, and the Arab spring feel peaceful, compared to previous events. Some think that the solution lies in a new technological phase s.a. nano-technology. I personally believe that the next phase has nothing to do with technology or capitalist economics but awareness and a totally new type of society.

And that is where I come in with Sustainocracy. I cannot create a Kondratieff sinusoidal counter wave now to avoid a mayor crash, nor prevent local poverty from rising, or avoid a potential new world war. I can however introduce a new paradigm that can instantly transform current society, situated structurally in greed (recession) on the way to chaos (depression), into one positioned permanently in wealth (prosperity) by taking institutional responsibility today. This would maybe break or interrupt the sinus or introduce a new aspect that actually supports the sinus but from a different point of view.  My own shortcut, interrupting the traditional ups and downs of society, has to do with our current state of collective understanding (awareness, consiousness).

We now collectively understand the above and the consequences of continuing. By introducing sustainocracy we now have a choice. We could trust the sinusoidal wave as an external matter of fact and realize that a new generation of prosperity is hopefully being born today to grow up and make it happen during the Konfratieff dip. We can also take responsibility and use what we know now to create a society based on new facts, a higher awareness, before it’s too late. Like building a Sustainocracy right now in ever city or region in the world.

The revolution of the consciousness

The revolution of the consciousness

How powerful will people remain when the collapse continues and the point of singularity makes the sinus wave the deepest ever? What interest can people have in total collapse? How powerful can these same people become when they assume sustainocratic responsibility and turn the ship with consiousness and planned wisdom before organic logic does it with brutal force? If you are in a position of power today just ask yourself that question.

It can be done through human ethical behavior, leadership and awareness. It is difficul but worth it. I am doing it with people around me who have fragmented authorities and power (government, business, science, civilians) and they use it with me in purpose driven social and technological innovation. We do not place money in the center of attention but sustainable human progress, a clear environmental and social balance in circular economics of value creation. By doing so we create a rapid change in mentality and see a period of many decades and even centuries in reformatting and organizing our civilization with a positive consequences for economies. That I call the second quantum leap of human kind. Not by chance but by willpower and awareness.

Purpose driven venture

AiREAS is the first sustainocratic venture in the world

Sustainocratic transformation is a voluntary act of responsibility

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7 Comments

  1. […] Kondratieff curve and Close's model of human complexities show remarkable similarities. Both need to be complete with the line of sustainable human progress. Then we see that we need to avoid chaos…  […]

  2. […] Kondratieff versus Close – This recent post was re-blogged various times by people who like the analytics of human […]

  3. […] This is the second in my series of comparing commonly used methods and models in current human organizations (business, government, society, etc). The first reflected about Kondratiev and Close. […]

  4. […] the old dominant institutional world is calling out for help. When we look at my blog about the Kondratieff sinus we see that at the peak of an economic hype the conservative dominance of risk avoiding governance […]

  5. […] I already wrote about the economic cycles of Kondratieff to put them into relationship with my own model of human complexities. It was for me the first […]

  6. […] over time we visualize this as a sinus wave (eg. Kondratiev) of periods of wellness and scarcity (ups and downs). Similar patterns can be observed in our […]

  7. […] Bewezen formule Deze formule en werkwijze is gecreëerd door Jean-Paul Close en wordt ook de 21ste eeuwse marktleiderschap cyclus voor duurzame menselijke vooruitgang genoemd.  Het is toegepast in de Stad van Morgen en heeft geleid tot AiREAS, FRE2SH en de STIR Academy zelf. De werkwijze wordt vooral toegespitst op inzetbaarheid van lokaal ondernemerschap (ZZP en MKB) maar het kan ook door grote ondernemingen worden gebruikt als inspirerend alternatief voor consultancy zoals de U-Theory of Kondratiev cyclus. […]

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