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Industrial Cycles, the Current
  Crisis of Capitalism, and
   Adapting to the Future
            March 13, 2012
       Tecnológico de Monterrey
          Campus Querétaro
 The Causes of the 2008 Panic and
  Subsequent Economic Crisis

   Washington Mutual, many financial
institutions chasing after greater profits
and taking bigger risks with housing
loans.

  Variable interest to NINJA loans. The
bubble and the largest bank failure in
American history.
 10% of all US business profits in
1980, 40% by early 2000s from
financial industry.
   Mortgage backed securities,
complex      derivatives, dishonest
ratings agencies (Moody, S&P),
Fannie and Freddie.
 Cascading effects of burst
bubble, loss of confidence, Lehman
and liquidity crisis.
  Crash in 2008, world depression
narrowly averted by US actions.
  But there are deeper causes.
Industrial Cycles

Dates of   Leading    Dominant    Crisis
cycles     Products      Areas   Moments
First:     Textiles   Great    Revolu-
1780s-                Britain  tions from
1840s                          1789-1848
Second:    Railroads, Great    Depression
1840s-     iron       Britain  of the
1870s      telegraph           1870s,
                               labor strife
Dates   Leading      Dominant      Crisis
        Products     Areas       Moments
Third:1 Chemicals,   Germany,   Colonial
870s- steel,         United     race,
1910s electrical     States     military
        machines,               arms race,
        research                nationalism
                                and World
                                War I
Dates      Leading      Dominant Crisis
           Products     Areas    Moments
Fourth:19 Autos,        United   Depression
20s- 1970s petro-       States   of 1930s,
           chemicals,            World War
           home                  II, anti-
           electrical            capitalism
           goods,                of fascism
           airplanes,            and com-
           services              munism
Dates    Leading        Dominant          Crisis
         Products         Areas         Moments
Fifth:   Electronics   USA, West      Commu-
1970s-   and           Europe,        nism falls,
2010s    computers,    Japan, parts   ethnic strife
         health care   of East Asia   resistance to
                                      modernity,
                                      crash - 2008
Dates    Leading       Dominant   Crisis
         Products      Areas      Moments

Sixth:   Program       China?     China/US
2010s-   organisms?    India?     as rivals?
2050s?   nano-tech,    Europe?    Religious
         bio- tech?    USA?       wars?
         energy?                  Ecological
         Education /              change /
         research?                climate?
Gini coefficient of income inequality

(1.0 = perfect inequality, 0 = perfect
equality)
  Poorer Countries
  Emerging and Middle Range
          Countries
   Rich Countries
Poorer Countries Average = 51.1
   Bolivia 59,   Guatemala 55,
   Haiti 59,
   Kenya 43,     Nigeria 44,
   Zambia 51, Mozambique 47
Emerging/Middle Range Countries
   Average = 47.9
   Mexico 48, Argentina 46,
   Brazil 57,
   China 42,    India 37,
   Malaysia 46,
   Russia 42,    South Africa 65
Rich Countries Average = 32.7
    USA 45,      Canada 32,
    France 33,   Sweden 23,
    Germany 27, United Kingdom 34,
    Netherlands 31,
    Japan 38,    South Korea 31

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Presentacion CM Daniel Chirot

  • 1. Industrial Cycles, the Current Crisis of Capitalism, and Adapting to the Future March 13, 2012 Tecnológico de Monterrey Campus Querétaro
  • 2.  The Causes of the 2008 Panic and Subsequent Economic Crisis  Washington Mutual, many financial institutions chasing after greater profits and taking bigger risks with housing loans.  Variable interest to NINJA loans. The bubble and the largest bank failure in American history.
  • 3.  10% of all US business profits in 1980, 40% by early 2000s from financial industry.  Mortgage backed securities, complex derivatives, dishonest ratings agencies (Moody, S&P), Fannie and Freddie.
  • 4.  Cascading effects of burst bubble, loss of confidence, Lehman and liquidity crisis.  Crash in 2008, world depression narrowly averted by US actions.  But there are deeper causes.
  • 5. Industrial Cycles Dates of Leading Dominant Crisis cycles Products Areas Moments First: Textiles Great Revolu- 1780s- Britain tions from 1840s 1789-1848 Second: Railroads, Great Depression 1840s- iron Britain of the 1870s telegraph 1870s, labor strife
  • 6. Dates Leading Dominant Crisis Products Areas Moments Third:1 Chemicals, Germany, Colonial 870s- steel, United race, 1910s electrical States military machines, arms race, research nationalism and World War I
  • 7. Dates Leading Dominant Crisis Products Areas Moments Fourth:19 Autos, United Depression 20s- 1970s petro- States of 1930s, chemicals, World War home II, anti- electrical capitalism goods, of fascism airplanes, and com- services munism
  • 8. Dates Leading Dominant Crisis Products Areas Moments Fifth: Electronics USA, West Commu- 1970s- and Europe, nism falls, 2010s computers, Japan, parts ethnic strife health care of East Asia resistance to modernity, crash - 2008
  • 9. Dates Leading Dominant Crisis Products Areas Moments Sixth: Program China? China/US 2010s- organisms? India? as rivals? 2050s? nano-tech, Europe? Religious bio- tech? USA? wars? energy? Ecological Education / change / research? climate?
  • 10. Gini coefficient of income inequality (1.0 = perfect inequality, 0 = perfect equality)  Poorer Countries  Emerging and Middle Range Countries  Rich Countries
  • 11. Poorer Countries Average = 51.1 Bolivia 59, Guatemala 55, Haiti 59, Kenya 43, Nigeria 44, Zambia 51, Mozambique 47
  • 12. Emerging/Middle Range Countries Average = 47.9 Mexico 48, Argentina 46, Brazil 57, China 42, India 37, Malaysia 46, Russia 42, South Africa 65
  • 13. Rich Countries Average = 32.7 USA 45, Canada 32, France 33, Sweden 23, Germany 27, United Kingdom 34, Netherlands 31, Japan 38, South Korea 31