Nikolai Kondratiev - Life and Times

Life and Times

Nikolai Dimitrievich Kondratiev was born on 4 March 1892 in the province of Kostroma, north of Moscow, into a peasant family. He was tutored at the University of St. Petersburg before the 1917 Russian Revolution by Mikhail Tugan-Baranovsky. A member of the Socialist-Revolutionary Party, his initial professional work was in the area of agricultural economics and statistics and the problem of food supplies. On 5 October 1917, at the age of 25, he was appointed Deputy Minister of Supply of the last Alexander Kerensky government, which lasted for only a few days.

After the revolution, Kondratiev pursued academic research. In 1919, he was appointed to a teaching post at the Agricultural Academy of Peter the Great. In October 1920 he founded the Institute of Conjuncture, in Moscow. As its first director, he developed it into a large and respected institution with 51 researchers by 1923.

In 1922 he published his first writing on long cycles., The World Economy and its Conjunctures During and After the War. His writing that capitalist economies were characterized by successions of expansion and decline contradicted the Marxist idea of the imminent collapse of capitalism.

In 1923, Kondratiev intervened in the debate about the "Scissors Crisis", following the general opinion of his colleagues. In 1923-5, he worked on a five-year plan for the development of Soviet agriculture. In 1924, after publishing his first book, presenting the first tentative version of his theory of major cycles, Kondratiev traveled to England, Germany, Canada and the United States, and visited several universities before returning to Russia. In 1925 he published his book The Major Economic Cycles which quickly was translated into German. A short form was published in 1935 in the Review of Economic Statistics and for a time his ideas became popular in the west, until eclipsed by those of John Maynard Keynes.

Kondratiev's economic cycle theory held that there were long cycles of about fifty years. In the beginning of the cycle economies produce high cost capital goods and infrastructure investments creating new employment and income and a demand for consumer goods. However, after a few decades the expected return on investment falls below the interest rate and people refuse to invest, even as overcapacity in capital goods gives rise to massive layoffs, reducing the demand for consumer goods. Unemployment and a long economic crisis ensue as economies contract. People and companies save their resources until confidence begins to return and there is an upswing into a new capital formation period, usually characterized by large scale investment in new technologies.

A member of the People's Commissariat of Agriculture and a proponent of the Soviet New Economic Policy (NEP) supported by Vladimir Lenin, Kondratiev was influential with writings about agriculture and planning methodology. Influenced by his trips overseas, he advocated a market-led industrialization strategy emphasizing export of agricultural produce to pay for industrialization, following the Ricardian economics theory of comparative advantage. He proposed a plan for agriculture and forestry from 1924 to 1928. However, after the death of Lenin in 1924, Joseph Stalin, who favored complete government control of the economy, took control of the Communist Party. Kondratiev's influence quickly waned.

Kondratiev was removed from the directorship of the Institute of Conjuncture in 1928 and arrested in July 1930, accused of being a member of a "Peasants Labour Party" (allegedly a non-existent party invented by the NKVD). Convicted as a "kulak-professor" and sentenced to 8 years in prison, Kondratiev served his sentence, from February 1932 onwards, at Suzdal, near Moscow. Although his health deteriorated under poor conditions, Kondratiev continued his research and decided to prepare five new books, as he mentioned in a letter to his wife. Some of these texts were indeed completed and were published.

His last letter was sent to his daughter, Elena Kondratieva, on 31 August 1938. In September 1938 during Stalin's Great Purge, he was subjected to a second trial, condemned to ten years without the right to correspond with the outside world. However, Kondratiev was executed by firing squad on the same day the sentence was issued. Kondratiev was 46 at the time of his execution.

In the 1970s as Keynesian economics proved a flawed approach, Kondratiev's work was rediscovered and became more fashionable than in the 1930s. However, it remains controversial because, among other issues, of his theories about the periodical character of the replacement of basic capital goods and the empirical possibility of coincidence in identifying long waves.

In 1987 the Soviet Union officially rehabilitated Kondratiev. His collected works were first translated into English by Stephen S. Wilson in 1998. In 1992, to commemorate the centenary of his birth, the International N. D. Kondratiev Foundation was established in Russia.