Saturday, October 3, 2015

Kondratiev Wave, Knowledge, Free Markets, and Society

source: wikicommons

What is society? gives an acceptable definition of society, “a highly structured system of human organization for large – scale community living that normally furnishes protection, continuity, security, and a national identity for its members: American society.” A society is basically a community. When talking about economics, we generally are talking about how a society organizes itself in order to produce and distribute goods and services.

A citizen is defined by the same dictionary as “a native or naturalized member of a state or nation who owes allegiance to its government and is entitled to its protection (distinguished from alien).” Societies are run by governments, and citizens owe their allegiance to that government and in return have privileges that are greater than non-citizen members of that society. Citizens it is assumed would all have equal rights and protections from the laws, otherwise other citizens owe greater allegiance to the government as it treats them better. Therefore by definition from the dictionary as citizens owe allegiance to a government, if citizens have greater rights than other citizens, those with the greater rights owe greater allegiance to the government.

As those with greater rights should in theory owe greater allegiance, it is with this reasoning that in times gone by they were expected to be in battle to protect the government and its ideals. That is why we had knights and samurai class the most privileged went to battle. When you see those being privileged by the government but sending mercenaries to battle whilst they enjoy greater privileges, be sure soon that society will be under pressure, the government must be run by con artists. An important part of being a citizen is the right to bear arms a privileged for knights and samurais in certain societies. In Zulu society every man was expected to be armed, everybody owed equal allegiance to the government and expected to protect it.

What is a citizen? What makes up members of a society? People are citizens and members of societies. A person can be understood and its most basic as an information package made up of particles like all other information packages. Particles being the most basic information package. The information package of a human being is such that if we took out say skin color, sex, human beings are basically all similar information packages. Religion, ideology, mental composure, sexual orientation are not physical attributes but mental. As the information packages are basically the same except for tiny differences, a society should not discriminate over one information package over another.

In reality, if we look at the genes of human beings, there is so little difference in the information package represented by genes, that a even if we include mental attributes the law should not treat any human being differently. This is why humans have been calling out for liberty, this is why even tyrants use liberty to defend their actions. Thus a Stalin would casually throw around the word liberty, defending liberty as he sent millions to the gulags. Liberty is merely the law treating everybody equally. This means that those with ability should be the ones to undertake a task. The law then has no right, and if it is a true society, the culture should not allow others to not take a similar task to fulfill their life’s because the State believes that it should protect some privileged members of that society.

An individual who is a citizen of a society should have same rights as all other citizens, that is all liberty is defended by science. It is defended by science because if we are all just information packages, which we are, then what right has a system to treat similar information packages differently. As information packages we should have the right to choose and our choices will reflect where we fit in society, if we culturally are allowed to make those choices. Then as information packages we fit into society because of what we are able to do.

There are those of course who claim to believe in liberty as well as having the state regulate our life’s more. They claim that too much rights for the individual is bad for the collective, or the society. The word collective has been used to understand that finally when they talk of collective they are merely meaning society, but those believing in the state just enjoy being fancy as they believe they are smarter, collective to them sounds smarter than saying society, there is some sort of mystery to collective.

Everybody is a member of this collective, there should never be a conflict between the individual and the collective. There is only a real conflict when the state favors others over others, thus creating an aristocracy, a word that has been replaced by the more accurate term of elite.

The free market merely says that anybody should be allowed to do without being protected by legislation, this has been called competition for us to understand, but it is not a competition as such, it is the highest form of collaboration as society decides how we must collaborate and who should contribute what in this collaboration. If you take it as a competition, well nobody likes to lose, one will end up cheating, and the best way to cheat is to get the government on your side.

What then is competition. The best way to answer this is to take a homogeneous society. Everybody is of the same race, ethnicity, and cultural norms.

There are many ways to argue about the best way to undertake an activity, or the best way to do something. A society can have great debates about this best way, this best method, best quality, affordable quality, but who is to answer these questions, a committee, talk about elitism, or all of us, those who want to be involved in answering the question. Liberty would say all of us. Liberty is a far deeper concept than merely voting for a government, liberty is about the package of rights that each individual has. True, all of us should determine who controls the government, as again all of us should decide what is art, goods, services, culture in general, mode of living to talk as an economist.

As we all have the right to answer societies questions in a society that believes in liberty, who ever wants to answer must be allowed to answer the questions.

How does society decide the best t – shirt for example. Well we choose the answer by purchasing the t-shirts. Anybody can buy the t-shirts if they decide so, or have enough desire for the t-shirt. There should never be a law saying some people have no right to buy those t-shirts if they are citizens, anybody has the right to buy those t-shirts that is liberty. This might seem like a trivial point to make because who has ever heard of people not being allowed to buy a t-shirt. But this point is important to understand liberty.

What is the best method to make a t-shirt, what is the best organizational method is the best way to make a t-shirt? What is the best quality of t-shirt to make? Well if anybody is allowed to buy t-shirts, then anybody should be allowed to make those t-shirts. Imagine the injustice that sure, everybody can buy the product, but only a favored few can offer that product?

The t-shirts that are bought answer the question what is the best t-shirt to make for society. The t-shirt style that sells the most determines the popular culture for t-shirts. It is popular culture because it is the most common t-shirt. Outside popular culture you will have t-shirts considered to be inferior, they will be for those few who can not afford popular culture, the povo – culture, povo from the word poverty. There will also be t-shirts considered of a superior quality to t-shirts of popular culture, they would be pricey and considered elitist culture t –shirts.

The best t-shirts for society are those that sell the most. In todays world a car like a Toyota Corolla is a far better car than a Rolls Royce. But for the top 1 000 000 wealthiest of the world, a Rolls Royce is a far better car than a Corolla, elitist and popular culture differences. It is good however to understand popular culture for what it is. A smart phone is part of popular culture for the wealthiest of societies, but they are part of elitist culture in the poorest of societies. Popular culture is determined by gross domestic product, gdp, as well as income distribution. The greater the liberty the higher the gdp, the higher the income distribution.

Of course the people who believe in the statism, and that they should control as they are smarter will say that gdp is not a good measure of anything, they will talk about some concept like quality of life, variables like literacy rates, doctors per thousand people, hospital beds, television sets, access to high speed internet, other such variables. Most of these variables, if not all are largely determined by income levels of a society, these smart people do not understand gdp, let alone liberty. Liberty will then determine the level of income distribution, and here of course the smart people will rise up, but are they sure their examples of income distribution prove the free market wrong, or do they prove the existence of an oligarchy, the answer can not be both.

Having thought out the unfairness of not being allowed to sell your t-shirt, or how unfair it would be for some villagers not to be allowed to bring their bananas to market. These are revolting things, the principle behind that revolting feeling goes up all the way to the most sophisticated of business organizations. Who gets casino licenses, if casinos are so vile nobody should be allowed to own one, why should they alone have the right to dirty their souls. If the banana villagers are allowed to go broke because of poor harvesting techniques, or by the simple fact that no matter how hard they worked, their efforts are in vain because of lack of rain, they go broke because of lack of rain.

As the banana sellers are allowed to go broke, how more vital is it for the vibrancy of society if banks are allowed to go broke, otherwise a massive robbery has taken place. If you are allowed to be inefficient and you supposedly control the economy, you are so vital to everybody’s existence, but you can’t go broke and must be prodded up, liberty is in reality dead and must have been dead for a very long time but was exposed by the Hurricane of a steep economic downturn.

We have talked of a homogeneous society because humans have great difficulty in realizing that they are similar information packages, information should be differentiated somehow all the way to the simplest information packages that exist. Now as humans have great difficulty in realizing this simple fact of similarities being greater than differences they take events as competition and brutalize information that they consider is different. These tiny differences have enforced a zero sum game and the destruction and wars we see around us, the cultural segregation, once it is cultural in reality it might as well be in the statute books. Culture is a mental concept not a physical concept.

Society was defined earlier on as “a highly structured system of human organization for large – scale community living that normally furnishes protection, continuity, security, and a national identity for its members: American society.” Society are those you owe allegiance to, they have given you continuity, security, and allowed you to be what you are. If you are oppressed, you are not part of that society even if statute books say so. If you have less rights, you are not an equal citizen.

Enter the Kondratiev Wave

If a society for example has allowed you to nurture an organization for the pursuit of profit, a business, and you identify with that society, then by reality you should protect that society first, your base before protecting another society. Protection is more than just guns, warplanes, it also must include jobs, security is a deep concept. Jobs, non discrimination, the right to do, this is all part of security. Once you discriminate you have introduced insecurity. Discrimination is a far deeper concept than just colour, discrimination also includes who owns a casino, who gets bailouts, who gets to own a gun, these are all concepts of discrimination. When they are official that is absolute, culture can be changed over time if people just look at evidence. It is just that race and sex are different as they are based on physical discrimination.

We all belong to a society, one way or another. It is important to recall the different class of t-shirts, the different class of goods and services, goods can be defined as elitist, popular or povo. In societies with heavy government involvement, meaning there is a powerful elite, power is always political, it is who finally has the ability to control the standing military structures of a country. In such societies an economist will be considered successful if they can appeal to the elite, but why the elite? It is the elite and those who operate their offices who will have the time to read economics. Those of popular culture will generally not have the time to read detailed economic theory, it is exhausting. Those of povo goods already understand things are amiss and waiting for the results to fall on popular culture, then they will have large numbers. The povo class most accepts government intervention as they see no way across the discrimination barriers.

There are economists for the elite, and economists for the underground who talk of liberty and others talking of killing the elite and having a new social order whereby government is in total control believing naively that is what a government for the people is. The underground always has two distinct battles, those who want to reform the government and reduce the power of the government. Reducing power of the sate in any form means that power has to go somewhere, it goes to the members of societies. The other group wants to usurp the state but the state remains with its power or they increase it more, concentrating power with those controlling the armed forces. But for economics to work properly we need to look at society objectively.

One man who could do this was Nikolai Kondratiev. The Kondratiev Wave needs to be more than glanced to call oneself somebody who understands economics. The Kondratiev wave and its implications are so clear that men who believed in total control of the state could not allow the man who thought of it to enjoy life and pursue his happiness, they had him shot.

Sadly what is called mainstream economics, the stream of those putting forward the way for economics is so small, that one would actually believe that is what the entire population wants, no, it is no more than 5 000 000 people globally, and of those who have understanding of liberty or even truly acknowledge it will not be more than 100 000, no way near what they think of themselves in numbers, and sadly this small group is completely run by those who believe in the state as that is where the funding ultimately comes from. A banker’s private foundation is only the result of government intervention. They do not understand the implications of the Kondratiev wave, because if they did they are absolutely evil.

Economics can completely be explained by knowledge and information. This is the beauty of knowledge, knowledge being information that has been revealed to us by our disciplined look into the laws of the material. Information is the only standard across all disciplines. All disciplines desire to know information and turn it into knowledge.

Nikolai Kondrtaiev realized that progress of economies can be described in waves. Crucial enough innovations, crucial enough laws of information, laws of the material being discovered will lead to a new economic phase, leading to enough change in the mode of existence for a new wave of economic growth to takes place in society. The crucial word here is society.

Kondratiev noticed that the age mechanization brought about waves of new growth and that is what the ages was about. The waves lasted around 60 years. The waves only lasted 60 years because we had developed enough to see them. Before the crucial enough knowledge to create industrialization the same phenomenon was lasting minimum a century and the spurts in economic growth where not vast because there was not enough knowledge for industrialization.

What is accepted by those who read about Kondratiev waves is that new knowledge growth, greater innovation leads to a change in kondratiev waves. By its name a Kondratiev wave is talking about society. To the horror of the Communists around the world this meant that whatever system they where fighting they where fighting it the wrong way, as whatever they where fighting, and they named it capitalism as their primary opponent. Capitalism being the ownership and exploitation of private property. Nobody has a permanent place, everybody is a rent payer, in the case of the communists everybody is a rent payer to the state as nobody owns anything. Understanding rent helps one to understand communists in another way. This capitalism that they where fighting will always resurrect itself because to compete they had to be innovative. How can a society of landowners exist when they do not have to pay rent and the most exploited are always paying rent?

The capitalism invented itself by allowing anybody to be allowed to own property. Aristocrats allowed this and allowed themselves and the state to make available land, adapting for survival. Obviously the elite would wish to collect rent from the whole world. But smart elitist allow private property and allow a man to call his home his castle.

Even if Kondratiev shouted from the top of his voice that he really is a communist, the discovery of the Kondrateiv wave means he cannot ever be trusted to fully believe in the state, it was better to shoot him. It is like racists will never believe a black that discovers that any human is superior to another even if he shouts at the top of his voice that the imperialist is superior, they will never believe it, it would then be a waste of time to even say imperialism is superior. That Kondratiev waves exist what further insights can they give us.

We can say a Kondrative wave lasts 60 years, that is four to five generations depending on medical technology. Let us take the implication of the Kondratiev waves further than merely scaring Stalin and international socialism, but to warn of the actions about the current global elitist economic thinking. The thinking of course is to completely care about their wealth over and above society and the Kondratiev waves proves that.

Each generation is conceived by the generation before and that generation depends on the foundations built on by the previous generation. That is how society operates. Even if you have the wealthiest society, that is how society operates, generation to generation. Now what happens if the wave is interfered with before the next generations are ready. If that happens the next generations have been cheated, as the generations before did not act as a society and used the name of the free market to defend this betrayal, it had nothing to do with free trade or society.

The free market is about society, trade in a free market means that a society if it is free can trade with any other society. Remember the free market is the best way to organize a society. It does not matter what another society is doing, it is about societies. The free market says for society to reach its optimum individual rights must be protected as well as the incredible concept of equality before the law. Everybody has the same rights and protections from the law, including the State. If the state can have arms, so can individuals, every body has equal rights. It is about a society.

When the Kondtratiev wave is disrupted it means that the generations can not adapt fully to the next stage. Moving industry from the West for example to cheaper areas has enormously disrupted the Kondrateiv wave. The cycle is complete when old industries die naturally in the society that they where born in. The society must naturally outgrow the wave that has already started. When Ford moves a plant to Mexico it is extremely disruptive to the American society. The society worked to getting those higher wages. The wages are higher because the rent is higher, food prices are higher, the standard of living is higher built on a generation at a time. The next wave they say should include a high proportion of very technological industries as well as beginnings of space exploration. Is the population ready.
The vast majority will not be ready because high paying jobs where lost at a whim by those claiming to be the same society. What is society, providing security for each other, security as explained above is more than a military, it includes standard of living, quality of life, being ready for the next phase of the economic wave, of the Kondratiev wave. What then is the point of freeing the individual if when it comes to clear choices, they will choose to put society into insecurity by moving a plant that was paying good wages in the society that made it possible, to a society that could never make it possible with its socio political structures that demonize the individual openly.

This insecurity of course will lead to real danger as it is in these times that demagogues rise. The demagogue promises security, they will provide the security for you. With more and more people supporting a possible military coup in countries like the USA, misunderstanding the individuals are part of societies has caused massive tensions. It is a misunderstanding of how communities operate and that individual rights, and that individuals are given powers that in intolerant societies would belong to the state for a reason, that we all understand we are part of society and the best must produce because we want the best. When the best having being nurtured by the society pack up and leave, are they part of that society when they complain fellow citizens who accept the best must produce for them are suddenly told by the best they are asking too much, you will end up with an uprising.

A kondratiev wave is over when firms start going bankrupt as new industries, as firms for a new industry rise. This would be natural through the process of competition, domestically and internationally. If international firms are better then so be it, be that better include lower wages. But the international competition must come from firms born in different societies. Cheap labor without capital transfers from one society like when a plant moves from one society to another is incredibly useless. That society will have no choice but to introduce great liberty. By introducing liberty capital will be created domestically, international capital will only be in the most liquid form of capital, credit. Transfers of other forms can only ever be fair if labor also has the same mobility.

We have to be mature. We are talking of industries and jobs that can exist domestically. If an oilfield is in another society and they do not have the capability to extract that oil, or copper efficiently, a domestic company can send capital overseas, but it should not be allowed to send labor unless labor from that society can come in, unless the two societies sign open borders and residency between the societies.

Think about it, if capital had not shifted in search of cheap labor, would countries that have recently industrialized have had that ability to industrialize. They would not have had that ability because of the political structures that follow a rigid hierarchy. When society is organized in such a rigid manner whereby everybody knows their place there is not enough liberty to create real capital. This is cheated by introducing enough liberty that allows capital transfer from a capital intensive society like the USA, and Western Europe including Japan and Canada. Therefore when a plant transfers from a country with greater liberties and thus able to create capital to a country that is run with what some call tyranny and could never create capital under a tyrannical system, they have actually cheated, but, those cheated more are the ones who accepted greater individual rights as it is good for society. It is the best way to organize society.

What they have built is disrupted. Once great importers off immigrants, now hating immigrants because societies have now become more elitist, a government run for a few but demanding allegiances from many. The evidence of this are the trade deals. Trade deals that disrupt the Kondratiev wave, thus liberty fails to be seen as a necessity, a point of view that will end badly, as intellectuals for the elite have said liberty can be cheated as long as their sponsors competition of who is the richest man in the world is promoted as a symbol of freedom.

The Kondratiev wave is one of the greatest discoveries in economic thought. It needs greater intellectual investigation, it is more than just proof of the free markets ability to re invent itself, it also gives dire warnings against fighting the principles of knowledge, of fighting liberty. Having disrupted the Kondratiev wave, capitalism even in the form of fascism will reinvent itself. But large segments of the population will not be able to adapt to the knew Kondratiev wave, they will be left out, they will sleep hungry, many will try to organize themselves to resist the insecurity.

What you have just read is in no way against development, this article is for liberty and generations benefiting from their inheritance from the generation before. It encourages global free trade with zero tariffs, but countries must accept the prize to participate is liberty, free the mind so that it can innovate and find ways to use the societies resource in the best way. Paying the right price, introducing liberty means no other society is destroyed for another society. Tyrannical societies should not be allowed to benefit by receiving capital from countries with less tyranny and the cost of the next generations of those countries with more liberty. The tyrannical societies should reduce their tyranny. 

If the Kondratiev wave was not so important Stalin would not have shot Nikolai. What must be taken from here is that economics is about individuals and society. Free markets is about allowing the freedom of the individual be greatest for the good of society. Those claiming that the individual and society are at odds have never bothered to try to understand the free market. The free market includes zero tariffs, but not the transfer of capital without the same rights of private property, and free movement of labour. This world is not one world at this moment, there are many societies. One world can only be culturally accepted through the process of a free market, through liberty.

Bhekuzulu Khumalo


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Bhekuzulu Khumalo

I write about knowledge economics, information, liberty, and freedom