8 
It might be possible to combine this theory with my 
own ideas. Old industries tend to become oligopolies 
(not always, though - textiles!) they will then invest 
less being afraid of excess capacity from which they 
suffer, and they will charge high mark-ups, in this way 
draining off effective demand. The important point is 
that this pressure on demand will affect the other 
industries, too, and perhaps even more so, so that there 
is a discouragement of investment all round - including 
1) 
also the realisation of new technical possibilities. 
Another element which possibly plays a role in the 
"long wave" is the excess of depreciation over replacement, 
which occurs whenever capital accumulation has been 
large in the past, say, twenty years, if that period is 
taken to be the life time of equipment. The excess arises 
in so far as depreciation is based on present capital 
stock and is therefore larger than the amount of capital 
1) Although the conditions in this case are rather 
special the oil cartel might be taken as an example 
of such a mark-up raising industry, and it is 
fairly clear that the effects on effective demand 
(important at any rate in the second oil shock) 
have hit the rest of the industry and discouraged 
thereby the emergence or application of investments 
in new technologies e.g. new products.