Economics Boils Down to Two Things: Distribution and Debt

Let's assume humanity has remained in the industrial era, with the distribution between "owners" and "workers"—in the broadest sense—split 40/60. The owners, a small minority, take 40%; the workers, the vast majority, take 60%. These broad owners include capital holders, brand owners, channel owners, and so on.

Today, this looks like a company's board of directors and core partnership group: either investors, executives, key technical staff, or top salespeople. Similarly, these broad workers include most grassroots and mid-level employees. This distribution model works fine initially, but over time, the latter group accumulates debt. Because their wages aren't enough to buy sufficient goods—for example, by population they should purchase 95% of goods, but they only receive 60% of income—the shortfall forces them into debt. This is how debt accumulates. When debt gets too high, purchasing power inevitably drops; when workers can't afford goods, owners face sales blockages and are forced to release talent back into the market. This further depresses the overall purchasing power of the broad worker class.

The entire process above is what Kondratieff defined as prosperity, recession, and depression.

What's the solution? Honestly, there isn't one. People die, debts are wiped clean. That's precisely why Kondratieff found the cycle lasts roughly 50–60 years—about one generation.

New generations of "leeks" are born, entering the same distribution-plus-debt cycle. When they can no longer repay debts, growth stalls and depression sets in. When they pass away, debts vanish, the bottom is reached, and things rebound. Then the new leeks start playing the same game with the next batch.

That's the origin of the Kondratieff wave concept.