Crisis in America (new book)

[Mikebert]

Over the last two years I wrote a book about the current crisis in America. Here is a pdf of the manuscript.

https://mikebert.neocities.org/America-in-crisis.pdf

I use a secular cycle framework rather than a generational one as in my earlier books. This is because I see the generational framework as failing to match with the actual periodization after T4T was published in 1997. Based on the theory described in Generations and the dating of the Boom, GenX and Millennial generations provided by S&H a 4T necessarily had to begin between 2001 and 2008. The structure of a 4T was outlined in T4T. A gathering sense of crisis during the 3T encounters a triggering event that creates a new social mood that denotes a change in turning from unraveling to fully unraveled (i.e. crisis). Following the crisis the situation gets darker until a period is reached when a definite course of action that will eventually lead to a resolution to the crisis is begun. This is the regeneracy. The selected course of action is pursued, there are advanced and set back until a point comes when the light at the end of the tunnel is revealed, a turning point after which it is just cleanup. This is climax. It seems clear to me that whether you choose 911 or the 2008 crash as the trigger there has been no regeneracy.

Ten years ago or more at the old site there was a guy always talking about how the time will come when millennials who will already be operating the controls of our civilization, will just overrule their out-of-touch elders nominally in charge, in a word, revolution. Classic-Xer has been hinting at civil war for years. Polls now suggest many people think some sort of civil strife may be in our future.

In both cases the sense is anticipatory, of a looming danger still in the future. This is a 3T sense, there same sort of brooding sense of "this can't go on forever" that was present in the 1990's and seen as characteristic. Back then I and others saw many parallels with the 1920's. Today the action on financial markets is again very reminiscent of the 1920's. But the political situation is often compared to the 1850's. Both are 3Ts.  Also, a regeneracy must necessarily have happened already, yet I haven't seen one. So, I very much doubt we began a 4T over 2001-2008 and this rules out the S&H theory with the generations S&H identified.  Note, since century-long saecula were once common, we could have a 4T beginning as late as the early 2030's and it still be "normal" but this would require new generations with a prophet gen born roughly 1945-70, a nomad gen born over 1971-2995, and a hero gen born after 1995. I rather doubt 1960's GenXers becoming Boomers would sit well with them. And this scheme would eliminate millennials altogether.

[Mikebert]

So I think the S&H theory has been invalidated. I now employ Peter Turchin's secular cycle for periodization. His cycle also has four periods: growth (1942-73), stagnation (1973-2006), crisis (2006-?) and resolution (not yet started). I date these for the current cycle as 1942-1973, 1973-2006, 2006-?.  

Unlike the saeculum, there ius no natural length to these cycles. The periods change when they do. For example, the crisis begins with the captalist crisis, defined as a sudden drop in ratio of per capital GDP to R, (a proxy for capital in the economy), This ratio is usually roughly constant (see fig) and is a measure of the productivity of capital. When it drops it indicates something is wrong with how the economy is functioning (this is described in chapter 2 of my book). It eventually leads to financial crisis through Hyman Minski's financial instability hypothesis as described in chapter 4.



The crisis resolution involves fixing the capitalist crisis. As you can see in the figure, the capitalist crisis began 1907 along with the crisis period. The capitalist crisis ended in 1942, when the red line shoots back up, indicating the crisis was resolved. This ends the resoltuion period and begins the growth period of the next (current) secular cycle.

The key measure that denotes the passage of the secular cycle (and helps in dating) is economic inequality. The beginning of a near fifty-year decline in inequality in 1929 signifies the beginning of the resolution period of the last cycle. The beginning of a long tern rise in inequality indicates the end of the growth period and beginning of the stagnation period. The trend change in inequality in the late 1970's shown in the figure is a manifestation of the 1970's stagflation, which began in 1973 with the oil crisis. Hence, I date the periods in the current secular cycle as indicated in the previous post.

You can see that the secular cycle is operating much like a 100-year saeculum with the 1942-73 growth period corresponding to a 1T, a 1973-2006 stagnation period to a 2T, and a 2006-present crisis period mapping into a 3T, with the resolution period (4T) yet to come.

Anyways the inequality trend shown in the figure is itself the result of cultural evolution of business/economic culture as described in chapter 3. The driver of this evolution is economic policy implemented by political elites. The political cultural evolution responsible for changing economic policy implemented by political actors is described in chapter 5.

In chapter 6, I introduce a new concept: social contagion. This mechanism is responsible for things like fifty-year cycles in war, prices, and social/cultural instability.  The periodic "social moments" S&H talk about mostly arise from this mechanism, not the generational mechanism S&H proposed.

Chapter 7 presents some application of these ideas and chapter 8 has a discussion of the current situation and how it might play out.

https://mikebert.neocities.org/America-in-crisis.pdf

[pbrower2a]

Mike --

It will take me time to read your article. My suspicion is that capitalism is doing best for Humanity when GDPpc/R is high. In such times, investment is creating opportunities and well-paying jobs. Profits are high on the whole because the level of economic activity is high enough to make up for lower margins of profit. People prosper and they are buying stuff. This can also reflect high-value technologies such as televisions in the 1950's. For the last 110 years, roughly, as GDPpc/R is high, inequality is low. Capitalism then works well for most people.

So what does it mean when GFPpc/R is low? There might be a technological drought. Big Business may be using its skills mostly to ensure that customers pay more for what they get, as seems to be the pattern for highway tolls. The idea is to charge what people will pay before rejecting the service or good. Capitalism is then a particularly raw deal, and the system basically rewards people for already being rich.

If there is capital it is then drawn into a speculative bubble, and we know how those go. Speculative booms are good for generating paper profits, but once the system runs out of potential buyers, paper profits turn into real losses.

[David Horn]

I spot read to see if it looked viable, and it holds together well so far, though spot reading isn't reading and reading isn't studying. I'll wade through it and give special attention to the math. This is "only" 201 pages, but intellectually weighty.

[Eric the Green]

(02-08-2022, 04:38 PM)Mikebert Wrote: Over the last two years I wrote a book about the current crisis in America. Here is a pdf of the manuscript.

https://mikebert.neocities.org/America-in-crisis.pdf

I use a secular cycle framework rather than a generational one as in my earlier books. This is because I see the generational framework as failing to match with the actual periodization after T4T was published in 1997. Based on the theory described in Generations and the dating of the Boom, GenX and Millennial generations provided by S&H a 4T necessarily had to begin between 2001 and 2008. The structure of a 4T was outlined in T4T. A gathering sense of crisis during the 3T encounters a triggering event that creates a new social mood that denotes a change in turning from unraveling to fully unraveled (i.e. crisis). Following the crisis the situation gets darker until a period is reached when a definite course of action that will eventually lead to a resolution to the crisis is begun. This is the regeneracy. The selected course of action is pursued, there are advanced and set back until a point comes when the light at the end of the tunnel is revealed, a turning point after which it is just cleanup. This is climax. It seems clear to me that whether you choose 911 or the 2008 crash as the trigger there has been no regeneracy.

Ten years ago or more at the old site there was a guy always talking about how the time will come when millennials who will already be operating the controls of our civilization, will just overrule their out-of-touch elders nominally in charge, in a word, revolution. Classic-Xer has been hinting at civil war for years. Polls now suggest many people think some sort of civil strife may be in our future.

In both cases the sense is anticipatory, of a looming danger still in the future. This is a 3T sense, there same sort of brooding sense of "this can't go on forever" that was present in the 1990's and seen as characteristic. Back then I and others saw many parallels with the 1920's. Today the action on financial markets is again very reminiscent of the 1920's. But the political situation is often compared to the 1850's. Both are 3Ts.  Also, a regeneracy must necessarily have happened already, yet I haven't seen one. So, I very much doubt we began a 4T over 2001-2008 and this rules out the S&H theory with the generations S&H identified.  Note, since century-long saecula were once common, we could have a 4T beginning as late as the early 2030's and it still be "normal" but this would require new generations with a prophet gen born roughly 1945-70, a nomad gen born over 1971-2995, and a hero gen born after 1995. I rather doubt 1960's GenXers becoming Boomers would sit well with them. And this scheme would eliminate millennials altogether.

Ah, a new anomaly. Interesting concept, Mikebert. I'm sure your book is thoughtful.

I understand that you and David Kaiser still hold to the idea that the 1850s were a 3T. I hold that it was 4T, and thus we being still 1850s redux does not mean still stuck in 3T. It means that, in the double rhythm, another civil war turning does not look like the external-directed turnings like the Revolution and Depression/WWII. Consensus is harder to come by in a civil war turning and has to be fought for. The fight may not even be over when the 4T ends, although some level of enforced consensus may exist for a while. So, I still stick with the older scheme, with a 4T having started in 2008. The Climate Crisis, the Trump presidency and the covid pandemic itself are full warrants to say we are in a full-blown Crisis/4T. And behavior seems to match previous crises too. But today's cold civil war does resemble the earlier civil war one, in which S&H said there was an anomaly, and so it might seem so again.

But I dissent from that analysis, both then and now. In a saeculum in which the country is hopelessly divided in its 4T until one side wins the fight, is not likely to see a "regeneracy" of the kind in FDR's time. The regeneracy has to be defined as a movement among the people, not by effective government action by a progressive leader. Biden seems to be the best we can do. Many people in the 1850s saw the civil war coming and were gearing up for the fight. That is what has been going on since Trump took over, if not before. The huge women's marches and the Parkland kids' march for our lives and the climate marches and the Black Lives Matter marches ARE the regeneracy that Barack Obama described in his 2018 talk to Illinois students. They were the biggest peoples' movements ever. "This time's different" he said. Many people are getting interested in political action and running for office for the first time, or for the first time in a long time, as Obama said in this wonderful speech. And Millennials started to fulfill their civic role for the first time, as Obama and David Hogg asked them to do.

So far your analysis is economically driven, although you promise more social and cultural elements in later chapters. I am not sure how you can say that GDP dropped in 1910 instead of 1930, or that inequality dropped so far in the 1930s when new deal measures were rather tepid until the war. It is true that our cold civil war conditions have not allowed the proposed economic remedies to get very far, and thus for inequality to start dropping. Right now the remedy is being proposed, but blocked by one senator, again because the progressive side has not been able to get over the hurdle of the division in the country. I don't think even in the 1850s that economic remedies were proposed to resolve the civil war crisis, or could have done so; this time economics and whether to even enact any state-crafted remedies are at the heart of the Crisis, and so results from the proposals by one side have not yet come to fruition. I am not so optimistic now that they will, but we are still only in 2022.

If they don't, my analysis suggests not only will the cycle have slowed down (say to 100 years, or revisable to that length in hindsight), but that the saeculum cycle may just be over. If we are set and determined to let the red side win in the USA, the result will likely not only be a postponed resolution, but the end of any hope for resolution, and the oncoming end of civilization as we have known it. Remember, no economic cyclic analysis is valid anymore without considering climate change, and the fact that we are near trigger points for hothouse Earth, and that we don't know exactly when they will tip. This is not a condition which confronted previous saecula.