- The techno-economic paradigm is both a propeller of diffusion and a delaying force - it provides a model that can eventually be followed by all but this learning must eventually be overcome
- It is precisely the need for reforms and the inevitable social resistance to them that lies behind the deeper crises and longer-term cyclical behavior of the system. Each technological revolution, originally received as a bright new set of opportunities, is soon recognized as a threat to the established way of doing things in firms, institutions and society at large
- Old industries rejuvenated as well
- New input (iron, steel, chips) reaches mass scale economics which creates massive price drops and it can therefore spread further
- All areas of society are interconnected and impact each other - technological, social, political
- Big bang leads to irrational exuberance which leads to structured adjustment, then installation period (irruption and frenzy), and eventually to deployment (synergy and maturity)
- How new tech goes to third world and financial / debt's role
- Financial capital plays a crucial role all along. It first supports the development of the technological revolution, it then contributes to deepen the mismatch leading to a possible crash, it later becomes a contributing agent in the deployment process once the match is achieved and, when that revolution is spent, it helps give birth to the next
- Regulation is the last part that is needed as part of the cycle
- Monopolies, oligopolies in phase 4 must try radical innovations to stretch lifecycle, reduce cost of peripheral activities
- Installation leads to turning points which leads to deployment
- The turning point has to do with the balance between individual and social interests within capitalism. It is the swing of the pendulum from the extreme individualism of Frenzy to giving greater attention to collective well-being, usually through the regulatory intervention of the state and the active participation of other forms of civil society
- Related services, cultural adaptation, education, regulation all come up
- Becomes ubiquitous, common sense which leads to coherence. When exhausted and tired, ripe for new paradigm
- Financial vs. Production Capital
- Financial capital - invest, money to make more money
- Production capital - builders, scaling more profit, making capacity
- Little knowledge in an area vs. a lot; foot loose vs. roots
- When productional capital is in control (post bubbles) it leads to real wealth creation
- Financial capital should be the facilitator, not the game itself
- When the companies (engines of growth) start seeking unorthodox ways to deploy their profits, that stage is at maturity (M&A, conglomerates)
- In maturity, financial capital also becomes unorthodox. Idleness leads to bad loans
- Provides the funding for the next paradigm
- Taking a successful behavior to its extreme causes failure
- Big crashes teach big lessons, but are often short lived
- Cost reductions in the core inputs/infrastructure leads to further explosion
What I got out of it
- Love seeing and learning about these centuries-wide deep dives that helps stitch together patterns. The cycle from irruption to frenzy to tipping point to synergy and finally maturity plays out time and again and having the image and jargon to think about it is so useful