Long Wave Theory of Non-economic Factors

Non-economic Factors and Long-Wave Theory

Introduction

The concept of long-wave theory (LWT) has been developed by theorists, economists and sociologists throughout the recent history of western thought. At its simplest, long waves represent a recurrent cycle of social and economic progress over long periods of time. The precise length of the long wave and the parameters that define it are still the subject of debate but what is accepted is their existence and the fact that cycles remain embedded in their analysis.

These cycles are a result of the convergence of non-economic factors, and it is these which this paper will discuss. Non-economic factors are usually ignored by economic models, as economic theory is largely quantitative, assembling data and making predictions based on measurable relationships. The non-economic elements of a cycle include culture, psychology, habits, technology and politics and cannot easily be reduced to figures and diagrams.

It is in this part of the cycle where the knowledge, ideas and innovations of individuals, institutions and societal movements emerge, changing tastes and assumptions, transforming the way that economies develop. In this paper, I will discuss the impact of non-economic factors on economic LWTs, outlining some of the key ideologies that have built and reshaped the economy in the West and their eventual impact. Finally, I shall provide an analysis of the way in which these non-economic changes can occur in the cycle and be incorporated into the LWT.

Social and Psychological Aspects of Long Waves

Social and psychological aspects of long waves are determined by personal attitudes and values that prevail in a particular culture. Jürgen Howeler (1982) suggests a key component of the long wave is the notion of the ‘legitimation crisis’. He described this as a situation in which established norms and values come under pressure and their authority is challenged. The crisis is generally associated with a period of turbulence, a time when ideologies and beliefs are developed and are given momentum by a variety of discourses.

In addition to the notion of the legitimation crisis, other social and psychological aspects of the long wave must be considered. The beliefs, values and trends that are developed during a crisis period become important economic catalysts as these will determine the direction and intensity of change. Popular movements such as the Reformation and the Enlightenment are examples of the way in which economic, political and religious beliefs influenced each other and fed into the LWT.

Technology in the Long Wave

Technology has also had an important role to play in the long wave. During the Industrious Revolution of the eighteenth century, technological innovations such as the steam engine and other machine tools had a significant impact on the way manufacturing processes were organized and increased productivity.

The same trend is continued today, with the development of the internet and its associated technologies being a key component of the LWT. The development of new technologies, such as those related to ‘robo-advisors’, artificial intelligence and machine learning, are transforming the economics of financial services and reshaping a variety of traditional economic models and structures.

Politics in the Long Wave

The political environment has been a crucial factor in the development of the LWT. The dawn of democracy in the late eighteenth century brought about changes in the economic climate of Europe and the United States, in particular.

The rise in democratization and the growth of the welfare state have been linked to increases in economic growth, equity and stability. The provision of social and legal safeguards, the deregulation of markets and the growth of global trade have also been outlined as important components of the LWT.

Conclusion

Non-economic factors, such as technology, social change, politics and culture, are essential components of the long wave theory, and the economic implications of these shifts are profound. The intertwinement of these elements results in the emergence and re-emergence of cycles, ideas and trends which progressively transform the economic landscape.

The development of technological innovations, the proliferation of popular movements and ideologies, and the introduction of democratic forms of governance are all examples of the kind of non-economic forces that influence the LWT. These changes have often emerged from challenging established norms and have resulted in the development of ideas, knowledge and processes that have had a lasting and ongoing impact on economic systems.

做介绍

Long wave theory proposes that economic development over time is not based solely on economic forces but on socio-political and cultural forces as well. According to the theory, economic development and growth occur through four or five cycles that each last several decades or centuries. During the cycles, societal values and values held by the ruling elite will change and shape the policies and actions taken, thus influencing long-term economic performance.

The theory was first proposed in the early 1900s by noted German economist, Georg Schmoller. Schmoller suggested that economics and politics acted as a check and balance on each other and that macro-economic factors were only part of the explanation for economic instability and growth. He proposed 10-30 year cycles of political, legislative and economic setting that impacted the economic performance of the country.

In the 1950s and 1960s, the theory was further developed by Harvard economic theorist, Walt Whitman Rostow, who argued that each cycle was linked to a particular stage in economic structuring and political development. He claimed that each cycle was self-perpetuating and signaled the beginning of a new era in development. Each cycle has its own dynamism, based on the prevailing socio-political and cultural values of the time. The model of Rostows long-wave theory is still widely used today, providing insight into the role of non-economic factors in long-term economic growth and development.

Recently, the theory has been challenged by modern economists who believe that non-economic elements are too difficult to measure, and have too much variability to be accurately modeled. While it is difficult to determine the causal or ripple effects of non-economic forces on economic development, the theory still provides an important insight into how economic change works. In particular, it stresses the importance of recognizing the critical impact of institutions, values, culture and politics in understanding economic growth.

In conclusion, long wave theory suggests that economic development is not solely based on economic forces, but rather on social, political, and cultural forces as well. While some economists have criticized the theory for its lack of empirical evidence, it is still accepted as a useful conceptual tool for understanding economic growth and the role of non-economic forces.