Technological Revolutions and Financial Capital
Carlota Perez, 2002 — cycles.
Five great surges since 1771 — canals, railways, steel-and-electricity, oil-and-autos, ICT — each running the same ~50-year script: financial capital funds an installation frenzy, a bubble inflates and crashes, and only after the crash does production capital deliver the deployment "golden age." Published two years after the dot-com crash it retroactively explained.
Why the engine keeps this on the shelf
Perez gives the engine its only rigorous account of what a crash means inside a revolution rather than at the end of one, so her installation/deployment split calibrates the TECH DISRUPTION VELOCITY component and frames every sealed entry in the technology domain.
The record
- Published by Edward Elgar in 2002, two years after the dot-com crash it retroactively explained.
- It has since been translated into Spanish (2004), Korean (2006), Chinese (2007) and Russian (2010).
- Perez received the Silver Kondratieff Medal from the International N. D. Kondratieff Foundation in 2012, and her work carries more than 21,000 citations on Google Scholar.
- In the 2022 centennial issue of Foreign Affairs, the economic historian Barry Eichengreen named it one of three books of the century in economics.
Marked passages
Her core distinction, summarized: financial capital funds the installation frenzy and inflates the bubble; production capital arrives after the crash to build the deployment golden age. The crash is not the end of the revolution — it is the toll gate to its payoff.
The lens the engine applies to the 2023–2026 AI capex boom: a correction before durable deployment, not instead of it.
The core claims
- A technological revolution is not one event but a fifty-year arc in two halves, and the crash between them is structural rather than accidental — it is the moment finance stops setting the agenda and production capital takes over.
- The golden age is a policy choice rather than an automatic sequel: it arrives only where institutions are rebuilt after the crash to spread the new paradigm, and where they are not rebuilt it does not arrive at all.
Then and now
Alphabet, Amazon, Meta and Microsoft guided to roughly $700 billion of combined 2026 capital expenditure, up from about $400 billion in 2025 — installation-phase capital at a scale no previous surge reached this fast. Source: CNBC, 6 Feb 2026
Investment in information-processing equipment and software was about 4% of US GDP in the first half of 2025 yet accounted for 92% of GDP growth; strip it out and growth was 0.1% annualised. Source: Jason Furman analysis, reported by Fortune, 7 Oct 2025
The IEA projects data-centre electricity demand roughly doubling to around 945 TWh by 2030, just under 3% of global electricity — the physical infrastructure a deployment period would have to run on. Source: IEA, Energy and AI (Apr 2025)
More on this shelf
The shelf exists because the engine reads it. See the Core, the projections, the sealed ledger, or all 81 texts.