The Platform Revolution from the Perspective of the Austrian Business Cycles Theory

Abstract

The research is aimed at substantiating the reasons and prospects for the development of platform companies from the perspective of the Austrian business cycles theory. The work used the method of ascent from the abstract (model of the economic cycle of the Austrian school) to the specific (the situation that has developed in the United States). The statistical observations, made for the period of 1980-2020 in the United States, do not contradict the Austrian business cycles theory. The rapid development of the leading platform companies in the United States (Apple, Microsoft, Alphabet (Google), Amazon, Facebook) allows to assert the revolution of platforms. However, this revolution took place against the background of the continuous credit expansion since the 1980s, which was characterized by a reduction in the interest rate on federal funds to zero values, a continuous growth of the loan portfolio of commercial banks and the US government debt. Continuous credit expansion, on the one hand, has created opportunities to introduce new technologies, create and capitalize platform companies, but, on the other hand, has increased the likelihood of a protracted crisis in the future, as credit expansion creates a contradiction between the transfer of resources to platform companies and the risks of not being able to continue to use these resources effectively in the event of an increase in their cost. Consequently, the prospects for platform companies will depend on their ability to continue their operations relatively efficiently in the face of the end of the credit expansion.

Keywords

• austrian business cycles theory
• crisis
• digital platforms
• technology companies
• platform companies
• the usa