However, this is not necessarily so, as stressed by Carlota Perez (2013). She sees
the current crisis as a recurrent historical event midway along a technological
revolution. Historical research (Perez, 2002) leads her to suggest that the capitalist
economy has lived through four previous situations equivalent to the current
crisis and that these have occurred midway along each of four technological
transformations (the early Industrial Revolution; the age of steam and railways;
the age of electricity and heavy engineering; the age of oil, automobile and mass
production). The installation period of these technological transformations has led
each time to a major bubble, followed by a financial crash and then a ‘golden age’
of prosperity. Currently, we are midway through the information and communi -
cation technology transformation and, in line with previous experience, we have
experienced a major bubble and a financial crash. What is not yet clear is whether
this time it is followed by a new golden age. Perez (2013) argues that there is no
automaticity but suggests that the stage is set for a new age of prosperity that could
be channelled in a green direction. Grasping this opportunity requires an active
state that shifts the balance of power from finance to production and changes the
incentives from resource wasting to resource saving. On this point, the views of
Perez converge with those of Mazzucato who stresses the key role of the
entrepreneurial state in fostering innovation and restructuring – see Chapter 9 of this
book. Further reinforcement comes from various strands of ‘Green Keynesianism’;
they have in common the idea that tackling the economic crisis is helped by tackling
the environmental crisis. It requires that the state makes big public investments in
green infrastructure and provides strong incentives for private green investment
(Zenghelis, 2012; Jacobs, 2013).
The arguments that the financial crisis can be turned into an opportunity for
green investment have been examined in a recent article by Geels (2013). In ‘The
impact of the financial-economic crisis on sustainability transitions’, he concludes
that the early crisis years (2008–2010) created a window of opportunity for positive
solutions. However, since 2011 this window has shrunk and political support for
green policies has weakened. In the UK, Germany and other countries, public
debate began to concentrate on the cost of shifting to renewable energy. The effect
has been to slow down rather than fast-track the green transformations. Such slowdown has not, however, occurred in the rising powers of Asia. As a result of the
financial crisis, the global power shift from West to East accelerated (Jacques, 2012,
pp585–636). The transformative capacity of China in particular increased, whereas
that of Western Europe and North America declined. This is beginning to affect
the cost of green transformations in the sense that green technologies from China
are cheaper. Whether this makes their diffusion faster is not yet clear because price
is just one of several determinants (Schmitz, forthcoming 2014).
What are we to do with these observations? They do not provide clear answers
to the ‘When?’ question which drives this section. They do, however, highlight
the importance of keeping an eye on the political windows needed to accelerate
green transformations.
180 Hubert Schmitz
the current crisis as a recurrent historical event midway along a technological
revolution. Historical research (Perez, 2002) leads her to suggest that the capitalist
economy has lived through four previous situations equivalent to the current
crisis and that these have occurred midway along each of four technological
transformations (the early Industrial Revolution; the age of steam and railways;
the age of electricity and heavy engineering; the age of oil, automobile and mass
production). The installation period of these technological transformations has led
each time to a major bubble, followed by a financial crash and then a ‘golden age’
of prosperity. Currently, we are midway through the information and communi -
cation technology transformation and, in line with previous experience, we have
experienced a major bubble and a financial crash. What is not yet clear is whether
this time it is followed by a new golden age. Perez (2013) argues that there is no
automaticity but suggests that the stage is set for a new age of prosperity that could
be channelled in a green direction. Grasping this opportunity requires an active
state that shifts the balance of power from finance to production and changes the
incentives from resource wasting to resource saving. On this point, the views of
Perez converge with those of Mazzucato who stresses the key role of the
entrepreneurial state in fostering innovation and restructuring – see Chapter 9 of this
book. Further reinforcement comes from various strands of ‘Green Keynesianism’;
they have in common the idea that tackling the economic crisis is helped by tackling
the environmental crisis. It requires that the state makes big public investments in
green infrastructure and provides strong incentives for private green investment
(Zenghelis, 2012; Jacobs, 2013).
The arguments that the financial crisis can be turned into an opportunity for
green investment have been examined in a recent article by Geels (2013). In ‘The
impact of the financial-economic crisis on sustainability transitions’, he concludes
that the early crisis years (2008–2010) created a window of opportunity for positive
solutions. However, since 2011 this window has shrunk and political support for
green policies has weakened. In the UK, Germany and other countries, public
debate began to concentrate on the cost of shifting to renewable energy. The effect
has been to slow down rather than fast-track the green transformations. Such slowdown has not, however, occurred in the rising powers of Asia. As a result of the
financial crisis, the global power shift from West to East accelerated (Jacques, 2012,
pp585–636). The transformative capacity of China in particular increased, whereas
that of Western Europe and North America declined. This is beginning to affect
the cost of green transformations in the sense that green technologies from China
are cheaper. Whether this makes their diffusion faster is not yet clear because price
is just one of several determinants (Schmitz, forthcoming 2014).
What are we to do with these observations? They do not provide clear answers
to the ‘When?’ question which drives this section. They do, however, highlight
the importance of keeping an eye on the political windows needed to accelerate
green transformations.
180 Hubert Schmitz