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