Nikolai Kondratieff was onto something, but the Ruskies put an end to him in one of Stalin’s Siberian gulags. Kondratieff didn’t say what caused the Kondratieff Longwave, but in an article in 2001 and a talk at Melbourne University in 2005, I consider I was able to show they’re caused by tax systems favouring land speculation over productivity. Although this situation only suits the 0.1%, we persist with it.

This particular ‘K-Wave’ is an extended one: it started after WWII, peaked in 1972-3, and has headed downwards towards its depressionary trough ever since the 1970s. Hence, the widening poverty gap, declining real wages and increasingly larger real estate bubble burstings.

This is a particularly interesting K-Wave, insofar as the lesser 18-year cycle is due in 2026 (i.e. 2008 + 18 years), with the usual mid-term recession about to happen in 2019-20. My only query is: with Australian private debt levels at these historic highs–we’re #1 in the world–how is it possible for Australia to hold on and to recover a little before 2026?

Of course, none of this boom-bust need occur were we to tax away publicly-generated resource rents (with zero deadweight loss) instead of taxing incomes (which ensures a deadweight loss of $2.00 for each $1:00 of income tax levied). But we don’t. Our politicians seem to prefer we continue with this nonsense .