The Russian scientist Nikolai Dmitriyevich Kondratieff (1892-1938) is considered the founder of the long wave theory. During his economic research between 1919 and 1921, he discovered that besides short cycles lasting up to three years and medium-term cycles lasting up to eleven years in duration, there are also long wave cycles lasting between 45-60 years. In 1926, he published his findings in the German language publication “Archiv für Sozialwissenschaft und Sozialpolitik” (“Archive for Social Science and Social Politics“). He was the Director of the Economic Research Institute in Moscow at that time. He demonstrated in the article that the economic development in the Western industrialized countries since the end of the 18th century was governed by three large wave upswing and downswing phases.
Even though Kondratieff was a communist from the outset, during Stalin’s dictatorship, he advocated for the preservation of market-oriented structures in Russian agriculture. This led to his downfall. In 1930, he was arrested for alleged anti-communist agitation, deported to Siberia, sentenced to die on 09-17-1938 and executed the same day (Maier, 1993). Freeman and Louca provide a good overview of Kondratieff’s life, work and method.
During the 1970s and 1980s, the methods of proving the Kondratieff cycle were revised at the Science Policy Research Unit (SPRU), University of Sussex (UK), under Christopher Freeman and by Cesare Marchetti at the International Institute for Applied Systems Analysis (IIASA) in Laxenburg, Austria. The new methods do not just factor in macroeconomic time series data, but are also based on technological, economic, social and institutional data and trends. Due to this expansion, the evidence of a Kondratieff cycle was put on a broader scientific foundation. At the same time, it became evident that the long wave theory yields far better results, if it is not just recognized as a business cycle theory, but as a social theory.
While the long wave theory has enjoyed new popularity since the 1990s, the interest in Kondratieff as a person has also increased. To be fair however, the following needs to be noted about his outstanding pioneering work:
1. Kondratieff has proven the existence of long waves in 1925/26, but he was not the first person to do so. Two Dutchmen, van Gelderen in 1913 and de Wolff in 1921, have shown the existence of long waves before him. They published their findings in Dutch publications and therefore remained internationally unknown for a long time.
2. Kondratieff has shown the existence of long waves and brought this knowledge to a broad scientific public. This was the crucial impulse for the development of the long wave theory and remains his special merit. However, one must not overlook the fact that Kondratieff was a passionate macroeconomist. He never mentioned a word about the groundbreaking innovations of the 18th and 19th century – the steam engine, steel, railway, electricity and chemical technology. Due to his obsession with macroeconomics, the fact that there are two different types of long waves escaped him: long waves at the macroeconomic level and long waves at the innovation level. This will be discussed in more detail in the next Appendix.
3. Kondratieff discovered the existence of long waves through historical time series analysis. His method is retrospective and presumes that the long cycle has already taken place or has at least reached an advanced state. A completed cycle can be analyzed this way. This method is not suitable for a forecast. Appendix 3 introduces a method with which a new Kondratieff cycle can already be predicted in an early stage.
Kondratieff focused on describing the long waves he discovered in a macroeconomic manner. He wanted neither to establish a long wave theory nor make a universal statement on the causes of long waves. This clearly emanates from his publications in 1926 (page 599) and 1928 (pgs. 35 et seq.).
In his work “Business Cycles“, Joseph Schumpeter was the first to highlight the key importance of innovations. He also coined the term “Kondratieff cycle“ and thus tied the name to the phenomenon of the long waves.
Irrespective of van Gelderen and de Wolff, Kondratieff has built his own framework, which was renovated, expanded, stabilized and developed by other scientists into the solid structure of the long wave theory and in doing so, has enriched science with another gem. His pioneering work entitles him to a place of honor in science.
Translation by Elena O´Meara