Depression and Revolution, 1762–1789

Abstract

The three decades from 1762 to 1789 decidedly were marked by recurrent and predominant economic depression—and they in turn mark what is probably the decisive turning point in the modern history of humanity. J. D. Bernal writes in his Science in History:

The seventy years from 1760 to 1830, and particularly the thirty from 1770 to 1800, are a decisive turning point in world history. They mark the first practical realization of the new powers of machinery in the framework of a new capitalist productive industry … The critical transition came as a culmination of changes in technology and economics which reached, as has been shown, a breakthrough in Britain, on the technical side, around the year 1760, and in France, on the economic and political side, thirty years later. The changes were not easily effected; it was no accident that the period was one of unprecedented revolutions and wars. (Bernal 1969, II: 535)

Analyzing business cycles means neither more nor less than analyzing the economic process of the capitalist era. Most of us discover this truth which at once reveals the nature of the task and also its formidable dimensions. Cycles are not, like tonsils, separable things that might be treated by themselves, but are, like the beat of the heart, of the essence of the organism that displays them. I have called this book “Business Cycles” in order to indicate succinctly what the reader is to expect, but the subtitle really renders what I have tried to do.

— Joseph A. Schumpeter, Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process (1939)