Winter is coming: The Fourth Turning (Cycles part 1)
“History is seasonal, and winter is coming.” (Neil Howe)
Some questions have been haunting me in recent years:
How come that we are seeing more and more populist leaders getting elected into power?
Why is the call for order (or even for fascism) getting louder? (e.g. calls from the French National Front, the Dutch Party for Freedom, the Alternative for Germany, the Freedom Party of Austria, and the UK Independence Party)
Why are we seeing these nationalist movements and why did Britain vote to leave the EU?
How will southern Europe get out of the mess that they find themselves in - with record rates of youth unemployment? ..do they have to abandon the Euro? ..what currency will follow?
I recently found some answers to these questions when I stumbled upon this podcast with Neil Howe.
Neil and William Strauss created the generational theory and wrote the books Generations (1992) and The Fourth Turning (1997). Former U.S Vice President Al Gore called Generations the most stimulating book on American history he'd ever read and he even sent a copy to each member of Congress.
Originally, Neil Howe and William Strauss discovered the theory when they asked themselves why the baby boomers were so different than the World War II generation that raised them. When they looked back in time, they found that there have always been generational clashes throughout American history. They analysed generations all the way back to the 15th century and they found that these generational clashes tended to occur in a certain sequence. In other words, different generations don’t arise at random. Certain kinds of generations always tend to arise after another in a certain long-term cycle - and that is about the length of a long human life.
One cycle consists of four generational turnings. They found that the fourth turning is the period of crisis. This is a period of destruction, often involving war, when society tears down institutions and everything that is dysfunctional. The authors say the previous Fourth Turning in the United States began with the Wall Street Crash of 1929 (starting the "great Depression") and climaxed with the end of World War II. According to Howe's and Strauss' theory we currently find ourselves in the fourth turning of the current cycle (called "Millennial Saeculum"). The following table gives an overview of the four generational turnings and when they happened in the last 500 years:
Each of the four turnings has a distinct mood that recurs every saeculum. Strauss and Howe describe these turnings as the "seasons of history". At one extreme is the Awakening, which is analogous to summer, and at the other extreme is the Crisis, which is analogous to winter. The turnings in between are transitional seasons, similar to autumn and spring. At the heart of Strauss & Howe's ideas is a basic alternation between these different types of eras. Both of these are defining eras in which people observe that historic events are radically altering their social environment. During Crises "great peril provokes a societal consensus, an ethic of personal sacrifice, and strong institutional order". During Awakenings "an ethic of individualism emerges, and the institutional order is attacked by new social ideals and spiritual agendas". People suddenly tire of social discipline and want to recapture a sense of "self-awareness", "spirituality" and "personal authenticity". Awakenings are periods marked by cultural or religious renewal, when society focuses on changing the inner world of values and private behaviour. The last Awakening was the "Consciousness Revolution" of the 1960s and 1970s. The generation in young adulthood were the "Baby Boomers" and their contemporaries in Germany, the '68-ers', the Achtundsechigers. This was a group of counter-cultural rebels and they are currently in power.
According to the authors the present fourth turning began in 2008 and should end sometime around 2030. That’s the period - at least in the previous cycle after World War II - that Bretton Woods, the IMF and the UN and many more institutions were being created. Also the European Union has it's roots from this area and the generation that built it were the children of World War II. In the podcast Howe remarks that now, we see increasingly the emergence of two younger generations in Europe, who are proud of their own nationality and their own national institutions. They are showing flags again and singing anthems. After 2009, with the sovereign debt crisis, a lot of people were talking about the demise of Europe over sovereign debt - until Mario Draghi said he would do anything and prevented that from happening. According to Howe the real problem was not sovereign debt but rather political. People did not want to be locked into a system, which impoverished them and which prevented them from making their own decisions to improve their economies. Howe sees in the Euro a parallel with the gold standard, which locked people in. In the case of Britain, it almost locked them into permanent depression until they finally got out of it. The Euro is playing a similar role for Southern Europe today. During the crisis, all problems begin to merge into one huge problem. In the previous cycle the great recession, the rise of fascism and currency wars became part of a huge problem. This is what happens in every fourth turning: all these little problems come together into a giant problem, which eventually gets completely solved. Howe emphasises that fourth turnings are not necessarily dangerous or bad things, they are good and necessary. It's when societies solve big problems that otherwise in another era would have seemed insoluble. Fourth turnings are times when institutions which are deemed unworkable completely disappear, and institutions which are deemed workable are suddenly fortified.
Stephen Bannon, Trump's recently resigned chief strategic advisor, is a vocal advocat of these books and has been heavily influenced by them. Bannon had played a central role in helping Trump win the White House, shaping the billionaire businessman’s populist message in a way that resonated with millions of Americans unhappy with the progress of the economic recovery. Bannon believes that, for the new world order to rise, there must be a massive reckoning. He encourages breaking down political and economic alliances and turning away from traditional American principles to cause chaos. In that way, Bannon seems to be trying to bring about the Fourth Turning. Bannon has never been secretive about his desire to use Trump to bring about his vision of America. He told Vanity Fair last summer that Trump was a "blunt instrument for us ... I don’t know whether he really gets it or not."
In the podcast and in his book, Neil Howe mentions the following symptoms of a fourth turning:
Unsatisfied people, unhappy with dysfunctional institutions and systems (e.g. the Euro, the American presidential election producing two inadequate candidates)
A perceived crisis that endangers (e.g. North Korea, Islam and jihad, terrorism, China, immigration in Europe).
An underground willingness to define who we are as a community and stand up for something in the face of encroaching danger.
A desire for a new sense of community and solidarity (Howe has done a lot of polls on the millennials, which confirm this new desire)
Nationalist movements (e.g. French National Front, the Dutch Party for Freedom, Alternative for Germany, the Freedom Party of Austria, the UK Independence Party, the Narendra Modi government in India)
A willingness to change and a call for authoritatian leaders (e.g. calls for for Shinzō Abe in Japan, Rodrigo Duterte in the Philippines, radical leaders in the EU, Bernie Sanders and Trump in the US, Narendra Modi in India)
"History doesn't repeat itself, but it does rhyme" (Mark Twain)
If the fourth turning is happening then the really big crisis has yet to arrive. In their book, Howe and Strauss offer some financial advice (among others) for dealing with this turning of generations:
"The bottom line is: you'll need to know where your money is."
"Diversify enough to make sure that no one severe outcome would destroy your asset base: inflation, deflation, market crash, bank panic, even the default of the national debt."
"hedge your portfolio: acquire assets in foreign markets, where the secular rhythms don't coincide with America."
"Try to enter the crisis with a reliable cash flow, diversified savings, and some liquid assets"
Sources:
Macro Voices Podcast: Neil Howe: The really big crisis has yet to arrive!
The Art of Manliness Podcast: Podcast #236: What the Generational Cycle Theory Can Tell Us About Our Present Age
Wikipedia: Strauss–Howe generational theory
Business Insider: Steve Bannon's obsession with a dark theory of history should be worrisome