The Long Cycle — Summary and Conclusions

In the preceding chapters, we examined whether the capitalist economy experiences cycles considerably longer than the industrial cycles of approximately ten years. As we saw, it has been proposed by various economists — both bourgeois and Marxists — over the last 100 years that, in addition to the 10-year industrial cycles and shorter inventory cycles, there also exists a long cycle of approximately 50 years’ duration.

The ‘Great Moderation’ and Financialization

The “Great Moderation” brought with it only moderate economic growth. However, it was accompanied by a credit inflation that was anything but moderate. With the unprecedented growth of the credit system came a considerable increase in the role of interest-seeking loan capital.

Palestine

On October 9, a new ceasefire in Gaza was announced. The last one took effect in January 2025 as Donald Trump assumed office. Many hoped this was the end of the Gaza genocide.

In March, the genocide resumed as Trump and Zionist entity leaders made clear their aims included the complete removal of the Palestinian population from Gaza. Kept open was whether this process was through ethnic cleansing or physical annihilation (literal genocide).

Physical annihilation was achieved by killing through mass bombing, cutting off food and water, causing manufactured famine, and disease.

The Reagan Reaction and the Coming of the ‘Great Moderation’

After World War II, the Keynesian reformers took unjustified credit for the postwar economic upswing. During the reactionary 1980s, it was the turn of the extreme right-wing governments that had come to power in Britain in 1979 and the United States in 1981 to take unjustified credit for the end of the protracted economic crisis of 1968-1982.

The ‘Volcker Shock’ and Start of the Neoliberal Era

As we saw in the previous chapter, the devaluation of the U.S. dollar in terms of gold had temporarily halted by the end of 1974. After peaking at $195.25 an ounce on December 30, 1974, the dollar price of gold fell to $104.00 on August 31, 1976.

As a result, during 1975, the rate of U.S. inflation, as measured by the government producer price index, was “only” about 4.4 percent. Still, the index rose more in the recession-depression year of 1975 than in the inflationary boom year of 1965. This was despite a slump that was considerably worse than that of 1957-58.

The Industrial Cycle and the Collapse of the Gold Pool in March 1968

Industrial cycles normally last about ten years — give or take a year or two. The second industrial cycle after World War II began with the 1957-58 global recession. Given that the industrial cycle lasts about ten years, we normally expect the next global downturn to occur around 1967. Indeed, 1966-67 saw a credit crunch and a “mini-recession” in the United States, as well as a recession in West Germany from 1966 to 1967.

Marxism versus Individual Terror

On September 10, far-right youth group Turning Point USA leader Charlie Kirk was assassinated by a sniper at Utah Valley University in Orem, Utah. The FBI arrested 22-year-old Tyler Robinson, who turned himself in at the urging of his family. Turning Point USA specializes in organizing far-right youth to support the Republican Party and Donald Trump. Kirk was a thorough-going bigot who specialized in baiting African Americans, Muslims, women’s rights activists, gays, trans people, leftists, progressives and liberals. He also made anti-Semitic remarks that in no way excluded his strong support for Zionism.

Boom of the 1960s: The Flood Tide of Keynesianism

Thanks to the economic crisis of 1957-61, the U.S. economy entered the decade of the 1960s with high levels of unemployment and excess capacity. The millions of unemployed workers and idle plants and machines meant that industrial production could rapidly increase in response to rising demand.

Historical Trends in Industrial Cycles

Almost every economic textbook states that post-World War II business cycles were much milder than pre-World War II business cycles. It is claimed that periods of “expansion” have become much longer, while periods of contraction or recession have become much shorter.

From Depression to New Expansion of Capitalism

By the end of the 1930s, many people, including non-Marxist progressives and Marxists alike, had come to consider the Depression as the permanent state of capitalism. The idea that the Depression represented the “new normal” even received a name. It was called the theory of “secular stagnation.”