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Tuesday, March 04, 2008
Generational Dynamics--Hedge for the Edge
Back a generation or so ago, before the technical morass which we now call the web had collected its first flies, I happened one day to read somewhere about someone's theory of generations (as in the Baby Boomers or Generation X). It went on a bit about repeating cycles, and how one sort of generation led to the next and so on. I didn't think much of it at the time as it all seemed mere hindsight, but fifteen years later I was struck by how well the world had met with what I recalled of their predictions. My few attempts to dig it up on the web failed but I figured I'd bump into it by chance eventually, and that finally happened yesterday. What I saw must have been some of the early papers of Strauss and Howe.
What stuck in my mind was their description of the generation to follow mine as being very unified, a sort of Disney generation, potentially very powerful due to their predisposition to acting together. E.g., from the link above they describe my generation (X) as "ratty, tough, unwanted, diverse, adventurous, and cynical about institutions" while the one to follow, now entering their mid 20's and below, as "conventional, powerful, and institutionally driven, with a profound trust in authority." (Before you reject it out of hand by comparing yourself, remember these are depictions of the inertial center of the populace as a whole, which is pretty far from here.)
Since these generations coexist at various ages and stages of their lives, one can also look at the resulting periods, which Strauss and Howe called Turnings, for which there is a good summary here. That link in turn is a portion of an early draft of Generational Dynamics for Historians which purports to be an extension of Strauss and Howe's work to a much broader range of times and places. A quick reading of the Preface and first few chapters of either that or the other similar book on the same site will cover the essentials of that theory. (I just ignored the odd digression into AI toward the end...)
Whether you buy the theory or not, it does seem to be dovetailing well with current trends (I am particularly reminded of Radiata Prime's blog for some reason). I'll leave the unfortunate punchline for the curious to discover and the rest to be unbothered by.
Tangentially related (because the author of Generational Dynamics seems to be one of the few who share my concern about this particular point), I have been wondering lately whether we are due for inflation/stagflation as everybody expects, or deflation. The popular opinion and obvious surface analysis is to expect inflation due to a loose monetary policy, large government debt (which they would like to see inflated away) and so on. But it's not clear to me we are not following in Japan's footsteps, wherein a pair of asset bubbles (first stocks, then real estate) popped into a decade+ long deflation despite their government setting interest rates to 0% (yes, zero) and intervening regularly with loans to prop up insolvent banks and corporations (sound familiar?). The biggest and perhaps crucial difference is the magnitude and direction of the US national debt (as opposed to Japan's, or ours before the Great Depression), which perhaps favors inflation, but I remain on the fence for now. (As always, thoughts and insights welcome.)
Tying both topics together, it is hard to argue that we are not "due" for both a major economic depression and a world war, but we like to believe that things are different now than back then. And this belief may be exactly the problem--that the only people who really know otherwise have died and been replaced by people who don't understand. And what they don't understand is not how much things today are like they imagine of the start of the Great Depression, or the early years of Nazi Germany, or what have you, but rather how much those times in truth were much like today.
All that said, I'm not all doom and gloom. More flee with glee. Or hedge for the edge. I think I'll buy some Haliburton*, Raytheon*, and VICEX to keep my SRS*, and SKF* company.
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