DÉJÀ VU: is our past our future?

‘Those who forget the past are condemned to revive it. Again, and again’. In our times of accelerated change, rarely has this old saying been more challenged. Is this old wisdom still valid in the era of artificial intelligence, the metaverse, and quantum computing? Or are we on the verge of a completely new world where the old assumptions of the past are to be thrown into the dustbin of history?

This is not the first period in history when thinkers are victims of the ‘this time is different’ syndrome. Considering that new situations call for radical new paradigms, refusing to consider that - even if the context and technology may change - basic human and social psychology may nevertheless call for similar behaviors in similar situations and, therefore, fall into the same traps as their predecessors many decades or centuries ago.

We have seen that so many times. In finance, such as during the Tulip, South Sea, or Internet bubbles, when investors thought that ‘new’ economic paradigms would render obsolete the eternal monetary principles of the past… Or in politics, when totalitarian regimes thought that ‘new’ ideologic paradigms would reverse millennia of human evolution and would succeed in creating a ‘new’ man…

Despite the dramatic technological changes in our environment, are there some recurrences that may call for a “déjà vu”? Defying the Hegelian hope of continued progress by backslashes from the Nietzschean eternal return?

Indeed, while many analysts hastily recuse any resonance between our times and the past, some others find very interesting similarities between today’s crisis and previous periods of financial and sociological trouble. Periods which were also marked by frenzied speculation, bubble bursts, dramatic economic crisis, followed by populist moves everywhere, growing nationalism, international tensions, and the rise of totalitarian states. All that ultimately leading to a global war. Namely, the thirties of the 20th century, when it all happened in this order.

Indeed, there are staggering parallels between the thirties and our times. Yet, how could we imagine that history could be set to repeat itself again and again? Why would people from different eras follow the same path? Fascinating explanations have been offered in the 1990s by two public consultants and sociology researchers, William Strauss and Neil Howe, in their famous book published in 1997, “The 4th turning.”

Having studied in detail United States history since its foundation in the 1780s, Strauss and Howe have identified strange recurring periods of about 80 years over the centuries, each one encompassing the birth and the development of four successive archetypal generations of 20 years each, separated by strategic turnings (1):

• Each 80-year cycle typically begins after a crisis or a war, when a generation of rebuilders (the ‘Artists’), born from the fighters of the last crisis, work hard to rebuild a collective future. Having spent their childhood during hard times, raised by fighters, these rebuilders are driven by a pragmatic spirit of ‘hard work’ and progress.
• Their children (the ‘Prophets’) benefit from the dividend of the reconstruction, and are cherished and raised as spoiled children by parents willing to give them all that they didn’t benefit from in their childhood. When they grow up, they challenge their parents’ way of life and preach for hedonism, first getting rid of traditional values, then dissolving the collective dynamics in a search for individual profit.
• Their own children (the ‘Nomads’), raised in an increasingly fragmented and individualist society, accelerate the fall.
• All this leads to a fragmented, individualist, deregulated, short-termist, overconsuming society that breaks up into new crises that the next generation of ‘Heroes’ will have to endure and resolve. Until their own ‘Artists’ children patiently rebuild a devastated world and start a new cycle.

If this must be seen as a theoretical framework rather than as a formal predictive theory, the resonances of this framework with the cycles of US history are thought-provoking (2). Similarities in generational behaviors are notably striking between the 1869-1949 saeculum that succeeded the USA’s secession war and the post-World War II decades, with the ‘glorious thirties’ reconstruction, the ‘flower power’ years, the frenzied ‘greed is good’ individualism of the 90s, followed by today’s crisis, which Strauss-Howe presents as the 4th turning since the creation of the USA. Creating a fascinating infinite loop between “individual responsibility” and “moral libertarianism” on the personal side and “economic solidarity” and ‘economic libertarianism” on the economic side (3). 

It must be noted that Strauss–Howe’s theory - which was published at the end of the 1990s - predicted the burst of a large economic crisis in 2005. Just three years before it happened in 2008/09. Interestingly, there is also a strong resonance between the Strauss-Howe framework and the recent work on financial cycles held by the founder of one of the world’s largest hedge funds, Bridgewater Associates, Ray Dalio (4), in his book “Principles to Navigating Big Debt Crises,” which also identifies large debt cycles of around 80 years, set apart by a dramatic crisis.

If these parallels come true, what lies in front of us? Based on the Strauss-Howe framework, prospects do not encourage optimism, with a high probability of a huge financial crash, deep stagflation, and devastating global war in the very coming years… Ray Dalio has similar predictions, complemented by an analysis on a larger timescale, which make him envision the end of US world supremacy, the end of the dollar reserve currency status, and a probable US/China war within this 202x decade.

Ultimately, how to react? No one can be sure what the coming years will bring. While it evolves within repeated cycles, history remains chaotic. Like with the butterfly effect, small events can change history’s precise course. 

But if the future is still uncertain, one thing is sure: we are in the wake of a strategic turning. Will it end up in a mild crisis, with unrest limited to a small financial collapse and power struggles? Or may it end up in dramatic wartime, going well beyond today’s economic or proxy fights to break into truly high-intensity world conflicts, whether cyber, biological, or directly military and even nuclear - and the set-up of a fundamentally new world order? Time will tell. All options, including the most dramatic ones, are unfortunately possible. But in the coming times, we will definitively have to guard our rears…

As the old saying goes, again, those who do not remember the past are condemned to revive it. Again and again. So, won’t it be time now to apply the lessons of the past?

The next post in this initial 'Global Transition Crisis' series - HISTORY'S FORMULA - will be published next week. Click here to subscribe >

'DÉJÀ VU' is the fourth post of our 'Global Transition Crisis' series. The previous posts of this series, 'ANTI-PREDICTIONS 2022+", "ESCAPE VELOCITY" and "GREAT RESET" can be found here >   

_{(1) Members of each generation do, of course, live to be 80+ years old. But each 80-year cycle will see the rise of four successive generations, with a large turning point at the end of the cycle. Of course, Strauss-Howe’s four “Artists,” “Prophets,” “Nomads,” and “Heroes” generational types are archetypical models. In each generation, multiple individuals do not correspond to the archetype of their time. These archetypes just illustrate the overall predominant values and social, political, and economic climate of the time at which these generations come of age and when their cultural influence on society is maximal. For example, the “Prophets” generation of boomers, born approximatively from 1949 to 1969, marked mostly the 1969-1989 ‘flower power’ era, characterized by rising hedonism and contestation of the traditional values of the 1949-1969 fifties, which were led by the “Artists” generation born from 1929 to 1949. Note that these dates must NOT be taken as exact timeframes but rather as approximative milestones within a societal evolution continuum. The model described here is also an adaptation of Straus-Howe’s and of other generational theories. Some aspects of the original theories have been reshaped in order to propose a clear and actionable framework for historical analysis.}

_{(2) Since the foundation of the USA, on which their historical analysis work is based, Strauss-Howe has identified three recurrences of these 80-year saeculum cycles. The USA being the leading civilization of modern times since the beginning of the 20th century, their generational cycles can reasonably be considered to influence the whole world, notably the western world. In our modern timeframe, the boomers are obviously the “Prophets” of the cycle, Generation X (born 1969-1989) the “Nomads,” Generation Y (born 1989-2009) the ‘Heroes,” and Generation Z (2009+) should be the “Artists” rebuilders, even if the names attributed to each generation vary depending on analysts, and if the dates proposed here are slightly adapted for simplification. If we follow the pattern, this means that we are in the wake of the 4th turning crisis, which may cover approximately the 2009-2029 timeframe. Given the events since the 2008 financial bust and the beginning of the permacrisis, this may not be a complete surprise to observers.}

_{(3) This infinite loop between “individual responsibility” and “moral libertarianism” on the personal side and “economic solidarity” and ‘economic libertarianism” on the economic side is not to be considered from a moral perspective. Each phase of the cycle is a natural consequence of the previous phase, and each one has its advantages and its flaws. Each phase can also vary between reasonable and extreme flavors: social democracy or totalitarian state in the reconstruction phase; spiritual upheaval or rise of sectarian ideologies in the contestation phase; frenzied entrepreneurship or business gangs’ battles in the liberalization phase; libertarian anarchy or imperial dictatorship in the crisis phase. There is no intent here to consider that one phase is intrinsically or morally better than another. The evolutions between phases and the phases themselves are just a consequence of the social psychology evolutions across generations. Interestingly, this 80-year cycle shows how societies always ultimately revolve around an ideal equilibrium between solidarity and entrepreneurship and between ethics of responsibility and ethics of freedom. Possibly evolving for the better as humanity progresses from cycle to cycle, in moves that may interestingly evoke ecological panarchies.}

_{(4) In “How the Economic Machine Works,” Ray Dalio considers that economic cycles are the result of long-term debt cycles, each of which roughly lasts around 75-80 years, governs the expansion and recession phases of the economy, and ends up in populist moves and a global crisis. Interestingly, these long-term cycles can be mapped very finely with the Strauss-Howe 80 years saeculum cycles. More >  In its "Principles for Dealing with the Changing World Order" book, Ray Dalio extends his analysis over longer periods, covering the rise and fall of empires and monetary systems over secular cycles. This is a theme that we will cover in our next post.}