If economic analysis had fallen into a dead end with an excess of mathematical formalization, could economic history allow us to get out of it? Pierre Dockès offers us a “long-haul journey” intended to grasp the essence of economic life.
The bursting of the bubble subprimes in the United States in 2007 quickly turned into a global economic crisis, which economists have come to refer to as the “Great Recession,” in reference to the Great Depression of the 1930s, which had a considerably greater impact.
Above all, she recalled, if it were still necessary, that economic activity unfortunately does not experience continuous growth, but is characterized by cycles, phases of expansion followed by phases of depression, and so on. It is to this inevitably cyclical nature of economic activity that Pierre Dockès’ work is devoted, the first volume of which already constitutes the fruit of a colossal work.
A historical and heterodox approach
To understand the workings of the world, economic models may prove insufficient. The book begins with this formula: “Standard (mainstream) economic analysis reigns over textbooks and scientific journals, it guides research, presides over policies.” (p. 9)
Pierre Dockès criticizes neoclassical orthodoxy for its excesses of mathematical formalization, specialization leading to a “balkanization of knowledge”, enthusiasm for the market economy, but also its scientifically biased and “ahistorical” character, “forgetful of the facts and theories of the past, even recent.” (p. 12)
To understand the economic evolution of the world, nothing replaces, in the eyes of the author, the historical approach and the analysis of economic crises in their contexts. If we cannot learn lessons from economic models, let us learn lessons from History! A specialist in economic history, André Strauss describes Pierre Dockès as an “economist who does not like economics” – in reference to orthodox economic science – and who prefers History.
History of facts and economic thought
The author therefore proposes to analyze “economic rhythms (…) from the point of view of historical economics.” (p. 12) To do this, he wisely chooses to mix the analysis of facts and economic theories, affirming that “The history of facts and the history of ideas must go hand in hand.” (p. 12)
Pierre Dockès begins his “long journey” (p. 14) with general observations on economic cycles, and recalls that Schumpeter, Kitchin, Juglar and Kondratiev constitute the major theoretical foundations. Presenting in an almost exhaustive manner the main contributions of economists on the subject, he does not fail to distinguish the analyses that underline the exogenous nature of crises from those that advance their endogeneity. The numerous references to literature and borrowings from philosophy serve to illustrate the point.
After these essential prerequisites, the author sets about a very specific task: the periodization of economic rhythms, the division of History according to major economic and social events. And Pierre Dockès rightly emphasizes that “studies that focus on one aspect and neglect the others are both insufficient and blinding.” (p. 128) Supported by primary and secondary sources – the author synthesizes major contributions such as those of Angus Maddison, Thomas Piketty or the controversial Carmen Reinhart and Kenneth Rogoff – Pierre Dockès therefore sets out to analyze the march of History in its entirety.
A “multifactorial and systemic periodization”
He therefore strives to take into account all the factors influencing the level of economic activity (technical, monetary, financial, demographic, etc.), arguing that “History presupposes a multifactorial and systemic periodization where the different elements react on each other.” (p. 128) In this framework, influenced by the Marxist and regulationist traditions, the author defines the notions of productive order and paradigm.
The productive order corresponds to a complex system with a certain coherence that ensures its own overall reproduction during a given period, but which at the same time provokes a series of tensions leading to crisis. It can be national, continental or even global. The endogenous nature of crises is highlighted here, and Pierre Dockès indicates that History is characterized by a succession of productive orders.
To the notion of productive order which is situated in a “tangible reality” (p. 140), the author adds that of productive paradigm, defined as a dominant representation, in a given spatio-temporal framework, of the efficient way of producing, combining its technical, economic, social and institutional modalities.
A Critique of the Kondratiev Cycles
With these notions of productive order and paradigm, Pierre Dockès carries out an analysis of long rhythms, and does not fail to criticize the famous Kondratiev cycles, whose sequence seems to him “reductive” and “too ‘mechanistic'” (p. 147). In Dockès’ eyes, the first Kondratiev cycle (1789-1847/51) – that of the steam engine and textiles – would be only an “artifact” whose expansion would coincide with a movement of political revolution and war, and the depression with a return to the old political order, which would be accompanied by a deflationary movement.
The second Kondratiev cycle (1851-1895) – that of the height of “liberal industrial capitalism” and the railways – seems to him “more serious”, while the third Kondratiev cycle (1895-1945) – that of the automobile and the radio – is described as “bastard” and constitutes an “incomplete productive order” in the eyes of Pierre Dockès: “the monopoly capitalism of large-scale industry”. As for the fourth and last Kondratiev cycle, begun in 1986, it seems more relevant in the eyes of the author.
The “incomplete productive order” of the 1930s and the contemporary period
Dockès dedicates the year 1986 to the beginning of a new long phase of expansion for the whole world, with the exception of the United States, which did not begin this upward phase until 1992. The author then indicates that the “bastard” and “incomplete” productive order that has been imposed since 1986 can be compared to that which was imposed during the long expansion phase of 1895-1929.
In both cases, the productive order is incomplete, because it suffers from an inefficient mode of regulation, which led to the Great Depression of the 1930s in the first case, and to the crisis of 2008 in the second. “The task of the future,” the author says, “should be the implementation of intentional coordination on a global scale” (p. 149), through international organizations. “Will humanity prove capable of this?” asks Pierre Dockès, concluding his interim remarks with a pessimistic vision of the future. It is then that the author invites us on his journey through time…
From the crises of the Ancien Régime to the Great Depression
Once his reading grid has been developed, Pierre Dockès looks at the economic crises of past centuries, starting with the crises of the Ancien Régime. His analytical grid differs from that of Ernest Labrousse: Dockès takes care to consider the possibility of general crises linked to movements of overproduction of grain. The author’s great erudition allows us to look at crises little known to the general public: the Florentine banking crisis of 1340-1345, the financial crisis of 1557-1559, the Grand Parti of Lyon, the “wind trade” – this speculative operation of 1609, which precedes the famous tulip crisis of 1636-1637 – or the monetary crises of Sweden from XVIIe century …
Pierre Dockès does not forget the unavoidable economic crises, and constantly takes care to link theories and facts, to provide us with the analyses of the leading economists for each of these crises. He therefore calls upon Adam Smith for the crises of XVIIIe century, the other classical economists and Marx for those of the XIXe century, and of course Keynes and his disciples for “the great crisis of the thirties”. But the author also takes care to mobilize other, lesser-known theoretical references, such as John Mills’ theory of “states of mind”, Mikhail Tugan-Baranovsky’s dynamics of savings and investment, Arthur Spiethoff’s contributions or even the theses of Hobson, Foster and Catchings on excess savings.
A sum that is already monumental
The first volume of this “long-term journey” concludes with the idea that the theories developed in the 1930s will experience a resurgence of interest and renewal with the Great Recession that began in 2007-2008. We will wait for the second opus to understand how the contributions of techno-pessimist Robert Gordon and former Treasury Secretary under Bill Clinton, Lawrence Summers, bring back into fashion the idea of ”secular stagnation” dear to Alvin Hansen. But also how and why Keynesian ideas were overtaken by a strong comeback of supply-side economists – monetarists and New Classicists – during the paradigm shift of the 1970s and 1980s.
We come away from this reading already enriched with a much better understanding of “economic rhythms”, thanks to the first volume of a work that will probably prove to be masterful, and which is the fruit of long work, initiated in the 1980s with Bernard Rosier, Professor at Aix-Marseille University. II and Director of Research at CEDERSto whom the work is dedicated. With this monumental sum and these considerable works, Pierre Dockès is perhaps following in the footsteps of the giants to whom he claims to belong: Fernand Braudel and Ernest Labrousse.
A syncretism nourished by diverse and varied influences
From these two eminent representatives of the Annales school, Pierre Dockès retains the idea of a History structured by long phases – movements of long periods – as opposed to an event-based political History which places the emphasis above all on singular facts and great individuals. But if Dockès is in the line of Braudel and Labrousse, he is also strongly influenced by the regulationist and Marxist traditions.
From the school of regulation – represented in particular by Michel Aglietta, Robert Boyer and Jacques Mistral – Pierre Dockès maintains that the phases of development of capitalism are defined on the basis of modes of regulation and institutional arrangements. The singularity of Dockès’ approach, however, lies in its cyclical approach, in a dynamic evolutionism that also brings him closer to Marx.
Indeed, Pierre Dockès also subscribes to a non-dogmatic Marxist tradition: for him, class relations have a certain influence, but are not as decisive as for Karl Marx. It does not entirely explain the way the world works, because other factors must also be taken into account.
These three influences are added to the theories of cycles of Schumpeter, Kitchin, Juglar and Kondratiev, which strongly nourish his analysis of economic cycles. Finally, what best characterizes Pierre Dockès’ approach is its syncretism, its ability to draw inspiration from diverse and varied intellectual traditions, but which can also prove complementary.