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interesting but flawed
on May 5, 2011
This book is interesting but seriously flawed.
The premise of the book rests on Kondratiev waves, cycles of capitalist boom and bust discovered for Stalin, who was looking for weaknesses in the capitalist system. What Kondratiev found was the capitalist system goes through cycles of boom through innovation and bust that last about 50-60 years. Each cycle is based around credit and rates and the flow of capital. Since around 1780 we have 5 waves and the premise of this book is that the green revolution is the 6th wave.
By coincidence I was looking at Kontratiev waves and found that Martin Armstrong has done the most work to date identifying cycles in society. Armstrong picked the financial peak in 2008 with a low at 2026 and a new financial high of 2045.
According to the book, the first wave was the industrial revolution starting around 1780, mass cotton production, iron and water power. Technology was invented such as the spinning-jenny, a multi-spool yearn-spinning machine combined with water-powered cotton mill. These heralded a shift from cottage based industry to factory style production. The second wave was the age of steam and mechanization, railways where developed around 1830. The third wave was the advent of heavy industry and electricity starting around 1895. The fourth wave starting around 1941, was the advent of the automobile, oil and mass production through the invention of the assembly line, which forever changed the way we live. The fifth wave, around 1980 is the information age, with the development of the internet.
The sixth wave claimed by the authors is the green revolution which they claim has begun a couple of decades early, for reasons the author can't explain other than technology is accelerating.
However I find the claims somewhat stretched, each innovation wave has resulted in new technology that has dramatically improved the standard of living for people, whereas this new "wave" really does no such thing. There is not a single green technology that is revolutionary or that will dramatically improve people's lives. Green mantras of reuse recycle renew, is in reality just tidying up the loose ends from the previous manufacturing revolutions. The authors also claim that the environment needs to be priced as to capture the cost of negative externalities, ie waste. Basically this means adding cost to manufacture that consumers will have to pay, how this is going to improve anyone lives is clearly stretching the imagination. Another theme of course is global warming or climate change and again this brings in a heavy new cost based on some possible future negative, it seems either you pay now or you pay later. Given the cracks that have materialised in climate warming hysteria, in my opinion its somewhat too early to start paying, we need significantly better verification of the data and of the predictive models before we commit trillions of global dollars to the problem.
All in all the authors can't point to a single technology that will dramatically alter the quality of our lives as has happened in previous waves of hot money chasing innovation creating cycles of credit booms and busts. The entire green revolution is predicated on negatives and added costs with no new benefit. The fact I now have some LED lights in my home that have cost a $100 a pop as opposed to 50c has done nothing to directly improve the quality of life other then bring forward future costs. The lights are still doing the same job.
My opinion is the sixth wave is a good 10 years off, and at this stage we have no idea what it could be but the green revolution is just another industry and not a revolution in lifestyle quality.