ABSTRACT
The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers' goods, the new methods of production or transportation, the new forms of industrial organization that capitalist enterprise creates. The observation that capitalist economies have booms and busts does not depend on historical materialism's fixation with class analysis. According to the Soviet economist Nicolai Kondratieff, economic growth and wealth creation under capitalism follows a pattern of 30-year growth cycles interspersed with 25-year slumps. Long periods of economic growth are followed by periods of stagnation and low growth, as night follows day. Markets for new products develop and produce a period of economic growth, an upwave, during which time the rate of profit rises with volumes of trade and the general level of wealth increases. Later, John Maynard Keynes would argue that governments should intervene to correct economic instability. Each wave alters economic geography.
