Ralf Einert

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Studies of Economic Change

Introduction (Life Cycle)

Until the present day we talk about the ancient civilizations. These are for example the Sumerian, the Indus Valley Civilization, the Egyptians, the Chinese Empire, Babylonia, Persia, the Ancient Greece, the Roman Empire, the Byzantine Empire, the Incan, Mayan, and Aztecs and numerous other cultures. The similarity of all cultures is that they already disappeared many hundred or even thousand years ago.

Even the German or European culture areas should not have the illusion to be immune from the social and economic decline. The development of all societies is based on a life cycle. Here we have a closer look at the characteristics of the economic life cycle of industrialised countries: Is there an alternative to the possible economic decline which can avert the looming downfall by maintaining a sustainable development?

The trends of the economic life cycle of countries can be determined ...

... by comparing the situation of societies which belong to different phases of their life cycle at present or

... by analysing the historic development of countries which are already industrialised:

The options of primitive cultures are simplified demonstrated by a "decision tree". We assume that high demands by the nature induce an evolutionary development which leads to the industrialisation and to economic growth. Without any demands social or economic improvement cannot be expected. The next phase is then characterised by declining growth rates by the saturation of the markets due to the "law" of diminishing marginal utility. And then? Are the declining growth rates and increasing productivity rates in connection with the decreasing the cause for the economic regression or is there hope for a sustainable development?

Then the mentioned alternatives are faced to the trends mentioned in the "decision tree" which consists of the start phase, the growth phase, the saturation phase, and the regression phase. Further on the question of a change of perspectives can be answered as follows:

Only a change of perspectives is able to achieve maximum welfare by implementing a sustainable development. The actual solutions which are realised by the politics without any doubts cover the social problems only on the surface. Therefore we need additional knowledge in the term of basic research.

So the focus on basic research in economic policy is the order of the day.