At the end of the 20th century, the information revolution and the rise of financial markets, the former increasing productivity and the latter liberating the driving force of wealth, painted a new picture for the "new economy" of the 21st century. However, as described in Carrota Peres's Technological Revolution and Finance Capital, there are hidden cycles and laws that concern not only technological development, but also the relationship between finance and productive capital.
Five technological revolutions in two hundred years.
A technological revolution is defined as a group of new and dynamic technologies, products, and sectors that can cause drastic changes throughout the economy, modernize the entire production system, raise the level of efficiency to new heights, and promote long-term economic development. Looking back over the past two hundred years, we have witnessed five technological revolutions, accompanied by five different phases of global economic growth. For example, the United Kingdom led the first two technological revolutions, the United States led the fourth and fifth technological revolutions, and the third technological revolution occurred in the three core regions of the United Kingdom, Germany, and the United States. The changes in these technologies do not occur uniformly, but gradually spread, creating nodes of development.
The life cycle of a technological revolution.
The life cycle of each technological revolution is about half a century, and it is mainly divided into four stages. It includes the period of first-class growth and rapid innovation of new industries, the stage of rapid diffusion, the stage of comprehensive expansion of new industrial systems and new infrastructure, and the potential of technological revolution begins to be limited, and new products and industries are close to maturity and market saturation. The process by which a technological revolution and its paradigm spread throughout the economy is reflected in structural changes in production, distribution, exchange and consumption, and profound changes in society. The wave of development brought about by the technological revolution usually presents itself in the stage of explosion, fanaticism, synergy and maturity. From the first-class growth of new industries, to the frenzy and reflexive adjustment of finance, and then to the first-class era of production, this cycle is accompanied by profound changes in the entire society and economy.
The game between financial capital and productive capital.
In the game of the new economy, financial capital and production capital play a crucial role. Financial capital, which represents the power to hold wealth in monetary terms, has supported the development of technological revolutions, but it can also trigger techno-economic and socio-institutional dissonances. After a long period of coordination, financial capital became the driving force of the development period. When a technological revolution comes to an end, finance capital helps to catalyze the next. Productive capital, on the other hand, carries the responsibility of production and is essentially a builder, accumulating greater profitability through increasing investment in innovation and expansion. Financial capital is primarily concerned with potential profitability. For productive capital, knowledge of products, processes and markets is the basis for its potential success.
The circular trajectory of the new economy is not only the rise of technological innovation, but also the silence of financial fanaticism. Each wave of development brought about by the technological revolution is accompanied by social changes, driving the continuous development of the economy. Learning from history allows us to steer technological development in a better way, balance the relationship between finance capital and production capital, and achieve stable economic growth.
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