The permanent conflict between expansion and crisis of capitalism: Technological Revolutions and financial bubbles.

Abstract

In this essay we theoretically articulate innovation and financial bubbles based on the concept of techno-economic paradigms developed by Freeman and Perez (1988) and on the relation between productive and financial capital during each Technological Revolution (Perez, 2002). In the first four Technological Revolutions – Age of Mechanization;  Age of Steam and the Railways; Age of Steel, Electricity and Heavy Engineering; Age of Oil, the Automobile and Mass Production – the financial capital was responsible for the economic speculation related to innovation and to the new industrial infrastructure construction. The Fifth Technological Revolution – the Age of Information and Telecommunications – has a peculiarity: the financialization of the economy has modified the relationship between productive capital and financial capital. In other words, the productive capital did not overlap the financial capital, which can be explained by profound structural transformations in the capitalist system.