Cyclical Generational Theory
I read a book a decade or so ago, published in 1997 called: The Fourth Turning An American Prophecy. The book proposed a theory for predicting the future based on cyclical repetition of the past along with the mechanism behind it. The centrist-leaning conservative authors, historian and economist Neil Howe and the late William Strauss, argue that history repeats itself in roughly 80 to 100 year cycles (about one long lifetime and called a saeculum) due to the constellation and archetype of generations that are influenced by events in the same way as their cohort generation 80 to 100 years in the past.
Background on the Fourth Turning Generational Theory
Per the theory, there are 4 generations influencing society at any given time (with smaller numbers very old stragglers still hanging on but not influencing society anymore and young children being born to the next generation). The archetypes used for these generations are Prophet, Nomad, Hero, Artist. Each Prophet generation shares traits with the Prophet generation from 80-100 years before. Same with Nomad, Hero and Artist generations. These map to our current constellation of generations as follows:
- Boomers = Prophet,
- GenX = Nomad,
- Millennials = Hero
- GenZ = Artist.
The very old Silent Generation are an Artist archetype and the very young Alpha generation will take on the Prophet archetype. The saeculum is broken into 4 eras, called turnings in the book.
- The First Turning is a High
- The Second Turning is an Awakening
- The Third Turning is an Unraveling
- The Fourth Turning is a Crisis
Each of these turnings is marked by a change in life stage of the generational constellation. In the First Turning, a prophet generation is being born, an artist generation enters young adulthood, a hero generation enters midlife and a nomad generation enters elderhood. This is easier to follow in table format:
This chart covers 80-100 years of time. And then it repeats. The authors present lots of evidence and history to support this theory, and I will admit much of it seems plausible. I do kind of wonder if it is like astrology or horoscopes, though, where your brain sees what you want to see. Gemini are ambitious, practical, disciplined, loyal, intelligent, etc. If you are a Gemini you think that describes you perfectly, right? Oops. I might have made a mistake- those are the traits of a Capricorn. You get my point? It's not enough to dismiss the theory, just something to be wary of while pondering it.
A few words on the generational archetypes. The traits that define a generation are created by their experiences at each stage of their life- how protected (or not) they are as children, what challenges they face in midlife, etc. A Hero generation tends to be selfless, rational, competent, unreflective, mechanistic, overbold. An Artist generation tends to be caring, open-minded, expert, sentimental, complicating, indecisive. A Prophet generation tends to be principled, resolute, creative, narcissistic, presumptuous, ruthless. A Nomad generation tends to be savvy, practical, perceptive, unfeeling, uncultured, amoral. Keep in mind, these traits are for a generation as a whole and don't reflect every individual member.
What is the Fourth Turning?
Ok, based on everything above, can you guess what turning we are currently in? If you guessed the Fourth, you are correct. Based on the latest thoughts from Neil Howe, he believes we entered the 4th turning about 2008 with the Great Recession. He also believes we won't exit the Crisis until ~2030. A 4th Turning is marked by wars, institutional breakdown, social upheaval and all kinds of bad things. At least I think they are bad. Others seem not to think so and are both wittingly and unwittingly plunging us forward towards crisis (see comments about Steve Bannon below).
Author Neil Howe in his recent follow up book The Fourth Turning is Here (2023) is careful not to make specific predictions about the future or lay out specific policies that are driving us to crisis. In the first weeks of Donald Trump's second presidency, I think it is becoming clear that we are going to have a crisis, but there are still many possible outcomes. Some possibilities based on history:
- Governmental Collapse (Who will rebuild? Will Russia Take over the US? Will Canada?).
- Military Coup (I'd guess this approach would attempt to restore a representative democracy in time, but how will it unite the country?)
- Revolution (When things get bad enough for enough people, this will happen. Will it be bloody or bloodless?)
- Mass Death via pandemic/starvation/??? (Some event will unite the country to work together and bring us out of the crisis).
- World War III (A common enemy to unite the country against. Do we win or lose? Which side are we even on and are we united in it? The president's kowtowing to Putin makes me wonder. I don't see the military agreeing to join an axis of evil with Putin and I don't see our country uniting around that, so maybe we are back to a military coup. Xi Jinping and China are the wildcard here.)
How We Got Here
Unlike Howe, I will offer you my predictions about how this will play out. I believe that the underlying cause of most of the strife we are experiencing today is economic inequality. Other issues such as abortion, DEI, transgender women in sports and so on are wedge issues that the billionaire right exploit as a tool to keep their base distracted and voting for them while they empty their pockets. It all comes back to economics in the end. A fourth turning is marked by a peak in the wealth gap between the rich and the poor. The crisis at the conclusion of the fourth turning resets that gap and we enter the first turning with healing and rebuilding. For the moment, Trump, Fox News and others have convinced enough Americans that they are struggling because of immigrants, DEI, transgender girls playing high school sports and government spending on food stamps and Medicaid. They are using that as the pretense for cutting taxes for the rich and cutting assistance programs for the poor. DOGE is all about eliminating government laws and entities that regulate business and get in the way of Elon Musk making more money at the expense of the American people. Eventually, enough of their supporters who are not rich are going to figure out that they got scammed and are actually worse off than before.
This chart shows the wealth share owned by the top 1% and 0.1% in the US over the past 100+ years. Source: National Bureau of Economic Research Macroeconomics Annual 2020
I picked this chart for a couple reasons. First, it shows the dramatic collapse of the wealth owned by the top 1% and 0.1% in the last fourth turning marked by the Great Depression and WWII. It also shows that their share of the wealth held pretty steady after WWII until 1970. When Trump says Make America Great Again, I suspect he is referring to this period of American History when he was a child, or at least that is what he wants his supporters to think. This was the time when the US led the world in industry and influence. The transistor and integrated circuits that brought us into the computer age were invented here in the late 40's and early 50's. Scientists were considered heroes. The country was united against the threat of the Soviet Union. Government Institutions were revered. NASA got us to the moon. Social Security gave everyone a retirement savings plan independent of their job. The size of the GDP pie grew and the middle class got a big piece of it. Granted, there were still plenty of problems during this time. There were recessions and periods of unemployment. There was segregation. There was fear of nuclear war. Oh yeah and the highest marginal tax rate at this time averaged around 90%! Somehow, Trump has convinced the MAGA crowd that lowering the highest marginal tax rate is going to get us back to great status. The data doesn't back that up. In fact, look at the 1920s. The highest marginal rate was cut from 73% in 1921 down to 25% in 1925. Look at the wealth transfer in the graph above that occurred from 1924 to 1929. The top 0.1% went from owning 15% of the wealth of the country to owning 25% in 5 years! And of course, that left the rest of America with much less wealth which directly led to economic collapse, the stock market crash of 1929 and then the great depression.
The second reason for picking the wealth chart above is it shows the reversal of the wealth trend that started in 1980 when Reagan was elected and started implementing trickle-down economics. I think anyone who is not in the 1% can now recognize that trickle-down doesn't work, unless by "work" you mean transferring wealth from the poor to the rich. The charts shows that all the tax cuts did was increase the transfer of wealth to the rich. The proponents of trickle-down economics say that the tax cuts for the rich spur economic growth and that a rising tide lifts all boats. Enough time has passed, and we have enough economic data to show that this is not the case. The tide rose for the rich but actually declined for the middle class and the poor. It doesn't show it on this particular graph, but the top 10% share of the wealth went up a bit since 1980, but for the bottom 90% it went down. This is why so many people feel that the country is going in the wrong direction.
Inexplicably, many people have been convinced that more tax cuts for the rich are the solution rather than the problem. What we have is trickle-up economics. Where do you think the wealth of billionaires comes from? It is not created out of thin air. When the stock price of Tesla goes up it is on the expectation or the reality that it is going to make more money. How does it make more money? It makes more money on each car it sells. How does it do that? By either charging more money for it (paid for by you, the bottom 90%- the money trickles out of your wallet and up to Elon Musk!) or lowering the cost to produce it. How does it lower the cost to produce it? There are several ways. Increasing productivity (the bottom 90% who work for Tesla have to work harder or be fired and replaced by robots or outsourced to a cheaper country.) Create economies of scale (this can lead to pricing monopolies and hence often leads to government regulation to prevent the negative externalities when a company achieves a certain scale. It also leads a large company to put heavy pricing pressure on smaller suppliers which in turn requires more productivity or lower wages from its work force in a vicious circle). So you see, Musk's billions are all taken from the same pie that all of us are trying to get a piece of. If he gets a larger slice, everyone else gets a fractionally smaller slice. Multiply this by all of the corporations we buy things from and interact with in our lives and you are left with very little pie.
There are a couple of exceptions here that are worth mentioning from an economics standpoint. There are two other factors that can grow the size of the pie. One is the government running deficits and/or printing more money. This is a temporary solution of kicking the can down the road. It isn't sustainable and will result in either 1. Inflation (something two entire generations are only just now learning about) or 2. Government debt default. I know less about government debt default, but I suspect that will impact the wealth of the rich and may be the preferred way out of our coming crisis. The other exception to mention is trading outside of the US. A trade surplus can grow the size of the pie, while a trade deficit shrinks it. Trump at least seems to get this. I'm not sure tariffs are the right approach to reducing our deficit and growing the pie, as despite what he says, they will result in higher prices for the consumer and bottom 90%. If the bottom 90% were otherwise financially healthy, retaliatory tariffs might be worth a little short-term pain to level the playing field with certain countries that impose tariffs on items they import from the US. This gets complicated, however, with the fluctuation of the strength of the US dollar and other currencies and my undergraduate economics training is not advanced enough to model the outcomes other than to say tariffs will be inflationary.
Where are we going from here?
There is only one outcome. The American Pie will be distributed more equitably. Unfortunately, I think we are at the point where this will only happen via revolution. I think there is a slim chance China does something to start a World War to give us an alternative path to unifying the US. To be clear, like Strauss and Howe, I am not advocating any kind of a violent revolution, just predicting it. We have passed the point where evolutionary change could swing the pendulum back in the other direction and ensure prosperity for everyone. Revolution is coming. I hope with all of my heart that we have a bloodless revolution and don't end up with a civil war or a bloody revolution like the French or Russian Revolutions. There are a number of billionaires out there who recognize this risk. Bill Gates and Warren Buffett, for example, would much rather pay a lot more in taxes and level the playing field to help out the 99% than face the guillotine. They recognize an economy that works for everyone is a necessity for a prosperous country. Rupert Murdoch and Elon Musk don't get that. They only crave more money and more power no matter the cost to others.
In fact, there are a number of right-wing operatives, such as Steve Bannon, that are aware of the Fourth Turning and cite it as a reason that they need to create revolution and go to war with the left. They actually want a bloody revolution. Jan 6th was the beginnings. They don't recognize that economic inequality is the root of the discontent in America and that the policies they advocate are accelerating the transfer of wealth to the 1%. (Note that some reviewers take Bannon's embrace of the cyclical generational theory and his extrapolation to drive towards a civil war as a reason to dismiss the theory and rail against the book, but I view it more like those people who extrapolated Darwin's theory of evolution into an argument for eugenics. They may be taking something fundamentally correct and warping it to support their own world view.) If things get so bad that the revolution turns bloody, would you bet on the 1% or the 99%? History says to go with the 99%. The billionaire controlled far right is doing their best to convince the 99% that DEI and big government are the problem and that the culture war is the battle that needs fighting, but now that they have dismantled those, who is going to be the bogeyman when the lives of the 99% fail to get better from here? The crowd will turn on them.
An economic and governmental revolution is a much better outcome than fighting in the streets. Unfortunately, to bring that about, enough Americans need to wake up to the fact that they are being fleeced by Trump and his billionaire buddies and are being used by their spineless representatives in the senate and congress who would rather maintain their own power than defend the long-term economic interests of their constituents. It will take (more) economic pain for that realization to happen, and that is what we are in for. If a revolution at the ballot box occurs, lots of policies could be enacted to stop the transfer of wealth from the many to the few. The health care system is a great place to start. Health insurance should not be a thing. We don't need for-profit trillion-dollar health insurance companies paying many millions of dollars to their CEOs. Luigi Mangione chose the bloody approach for revolution when he gunned down the United Healthcare CEO. Let's take the non-violent approach and change the laws instead.
A law needs to be enacted to override the Citizen's United supreme court ruling. Corporations now own the government rather than the people. That needs to change. I will even throw the Republicans a bone here- there is a lot of government waste that can and should be cleaned up and made more efficient (note what DOGE is doing now has nothing to do with efficiency, it is all about eliminating the government). As for taxes, they should be hugely simplified and made more progressive at both an individual level and a corporate level. The more money you earn, the higher percentage you pay. Or go with a VAT instead of an income tax. Or a combo. Whatever, is chosen, it should be balanced neutrally so it doesn't result in one group getting richer at the expense of another. And yes, that means it needs to have a progressive component to it. None of this is radical stuff. It is all things that could have and should have been done in the past couple decades. The government budget should be balanced over the long term but with leeway for Keynesian deficit spending to smooth out economic downturns (which we are getting good at doing) and running a budget surplus when the economy is chugging along and saving that money for the next downturn (which we have not done since the late 90s). Both political parties have had their chance to do this but didn't and now our country is on the precipice of collapse.
I guess one other possible solution that I daydream about is an amicable agreement to dissolve or split the United States. Trump likes to make deals. Let's make one with Canada. They can take all of the pesky blue states off his hands and the remaining red states can be turned into the conservative billionaire's paradise he daydreams about. Everybody wins and we all move on to the First Turning.
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