How would you describe the social mood of the nation and world?
Would anti-Establishment, anti-status quo, and anti-globalization be a good start?
How about choking on fast-rising debt?
Would stagnant growth, stagnant wages be a fair description?
Or how about rising wealth/income inequality?
Wouldn’t rising disunity and political polarization be accurate?
These are all characteristics of the long-wave social-economic cycle that is entering the disintegrative (winter) phase. Souring social mood, loss of purchasing power, stagnating wages, rising inequality, devaluing currencies, rising debt, political polarization and elite disunity are all manifestations of this phase.
There is a template for global instability, one that has been repeated throughout history…
Historian Peter Turchin explores the historical cycles of social disintegration and integration in his new book Ages of Discord.
Turchin finds 25-year cycles that combine into roughly 50-year cycles. These 50-year cycles are part of longer 150 to 200-year cycles that move from cooperation through an age of discord and disintegration to a new era of cooperation.
That we have entered an era of rising instability and uncertainty is self-evident. There will always be areas of instability in any era, but instability and uncertainty are now the norm globally.
Turchin’s model identifies three primary forces in these cycles:
1. An over-supply of labor that suppresses real (inflation-adjusted) wages
2. An overproduction of essentially parasitic Elites
3. A deterioration in central state finances (over-indebtedness, decline in tax revenues, increase in state dependents, fiscal burdens of war, etc.)
These combine to influence the broader social mood, which is characterized in eras of discord by fragmented loyalty to self-serving special interests (disintegration) and in eras of cooperation by a desire and willingness to cooperate and compromise for the good of the entire society (integration).
Rising discord can be quantified in a Political Stress Index. Do we find evidence of Turchin’s disintegrative forces in the present era?
1. Stagnating real wages due to oversupply of labor: check.
2. Overproduction of parasitic Elites: check.
3. Deterioration in central state finances: check.
Is it any wonder that political stress, however you want to measure it, is rising?
It is hubris in the extreme to think we have somehow morphed into some new kind of humanity far different from those people who tore down the Bastille in a great frustrated rage at prices for energy and bread they could no longer afford.
Based on the history painstakingly assembled by Fischer and Turchin we can thus anticipate:
— Ever higher prices for food, energy and water.
— Ever larger government deficits which end in bankruptcy/repudiation of debts/new issue of currency.
— Rising property/violent crime and illegitimacy.
— Rising interest rates (until very recently this was considered “impossible”).
— Rising income inequality in favor of capital over labor.
— Continued debasement of the currency.
— Rising volatility of prices.
— Rising political unrest and turmoil (see “Revolution”).
And there you have our future, visible in the 13th, 16th and 18th century price-revolution waves which preceded ours.
With this list of manifestations in hand, we can practically write the headlines for 2019-2025 in advance.