Business Cycles, Patterns and Trends Version 6 PDF

Business Cycles, Patterns
and Trends
Throughout eternity, all that is of like form comes around again –
everything that is the same must return in its own everlasting cycle.....
• Marcus Aurelius – Emperor of Rome •
Many Economists and Economic Planners have arrived at the same
conclusion – that most organizations have not yet widely developed, nor
adapted, sophisticated Economic Modelling and Forecasting systems – let
alone integrated their model outputs into core Strategic Planning and
Financial Management process.....

Stoicism – a branch of Philosophy
“All human actions share one or more of these causes: -
chance, reason, nature, habit, delusion, desire, passion and obsession.....”
• Marcus Aurelius – Emperor of Rome •

Stoicism – Motivation for Human Actions
Reason – logic
Human
Actions
chance
reason
obsession
passion
habit
nature
delusion
desire
Human Nature –
(good and evil)
altruism, heroism
curiosity, inquiry,
ignorance, malice
Desire –
need, want
Passion –
love, fixation
Obsession – compulsion Serendipity – randomness, chaos
Ritual, ceremony, repetition
Primal Instinct–
anxiety, fear,
anger, hate
Stochastic
Emotional Deterministic
Reactionary

• Marcus Aurelius •
Emperor of Rome
• “Throughout eternity, all
that is of like form will
come around again –
everything that is the same
must always return in its
own everlasting cycle.....”
• “Look back over time, with
past empires that in their
turn rise and fall – through
changing history you may
also see the future.....”
• Marcus Aurelius followed
• Stoic Philosophy •

Business Cycles, Patterns and
Trends
• This Slide Pack forms part of a Futures Study Training Module - the purpose of which
is to provide cross-functional support to those client stakeholders who are charged by their
organisations with thinking about the future – research, analysis, planning and strategy: -
– Finance, Corporate Planners and Strategists – authorise and direct the Futures Study.
– Product Innovation, Research & Development – plan and lead the Futures Study.
– Marketing and Product Engineering – review and mentor the Futures Research Study.
– Economists, Data Scientists and Researchers – undertakes the detailed Research Tasks.
– Research Aggregator – examines hundreds of related Academic Papers, “Big Data” & other
relevant global internet content - looking for hidden or missed findings and extrapolations.
– Author – compiles, documents, edits and publishes the Futures Study Research Findings.
– Business Analysts / Enterprise Architects – provide the link into Business Transformation.
– Technical Designers / Solution Architects – provide the link into Technology Refreshment.

Trends
• The purpose of a Futures Study Training Module is based on the need to enable clients
to anticipate, prepare for and manage the future - by guiding them towards understanding
of how the future might unfold. This involves planning, organising and running Futures
Studies and presenting the results via Workshops, Seminars and CxO Forums – working
with key client executives responsible for Stakeholder Relationships, Communications and
Benefits Realisation Strategies by helping to influence and shape organisational change
and driving technology innovation to enable rapid business transformation, ultimately to
facilitate the achievement of stakeholder’s desired Business Outcomes – and scoping,
envisioning and designing the Future Systems required to support client objectives -
integrating BI / Analytics and “Big Data” Futures Study and Strategy Analysis outputs
into their core Corporate Planning and Financial Management processes.....
– CxO Forums – executive briefings on new and emerging technologies & trends
– Workshops – discovery workshops to explore future SWAT and PEST matrices
– Seminars – presents the detailed Futures Study findings and extrapolations.
– Special Interest Groups (SIGs) – for stakeholder Subject Matter Experts (SMEs)

Abiliti: Future Systems
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Creative Destruction –
drives Disruptive Change
Disruptive Futurism as the "gales of creative destruction" forecast by
Austrian economist Joseph Schumpeter in the 1940s - are blowing just
as hard today as they ever were.....
The twin disruptive forces of a severe economic environment and
technology-driven innovation are giving birth to novel products and
services, new markets and new opportunities.
• Joseph Schumpeter – Economist •

Joseph Schumpeter
"Creative Destruction drives Disruptive Change" • Joseph Schumpeter – Economist •
JOSEPH SCHUMPETER (1883–1950) in describing Capitalism coined the paradoxical term
“creative destruction”. Numerous economists have since adopted “creative destruction” as a
shorthand description of the FREE MARKET’s disruptive mechanism for delivering economic
progress. In Capitalism, Socialism, and Democracy (1942), the Austrian economist wrote: -
• “The opening up of new markets, foreign or domestic, and the organizational development
from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial
mutation - if I may use that biological analogy - that continuously revolutionises the economic
structure from within, incessantly destroying the old one, ceaselessly creating a new one.
This process of Creative Destruction is the essential character of capitalism.” (p. 83)
• The paradox of the process of technology innovation in economic development - creative
destruction - forms the basis of the discipline of "Disruptive Futurism". Society cannot reap
the benefits of disruptive change – the rewards of creative destruction – without accepting
that there will be both winners and losers in the process of economic transformation. Some
individuals will prosper as new economic opportunities are created. Some individuals will be
worse off - not just in the short term, but perhaps for the remainder of their lives.

Joseph Schumpeter
• Joseph Alois Schumpeter was an Austria-American economist and political scientist, and a
member of the Austrian (Real) School of Economics. He briefly served as Finance Minister of
Austria in 1919. In 1932 he became a professor at Harvard University where he remained
until the end of his career. Schumpeter said that "the process of creative destruction is the
essence of capitalism.”
• 'Creative Destruction' is a term that was coined by Joseph Schumpeter in his work entitled
"Capitalism, Socialism and Democracy" (1942) to denote a "process of industrial mutation
constantly changing the economic structure from within, incessantly destroying the old
economy, incessantly creating a new economy.“
• Disruptive Futurists discover, analyse and interpret the "gales of creative destruction" which
were forecast by Austrian economist Joseph Schumpeter in the 1940s – and are blowing
harder today than ever before. The twin disruptive forces of the globalisation of a dynamic
and chaotic economy coupled with technology-driven innovation are giving birth to emerging
digital markets which generate new business models and revenue streams, novel products
and services – accompanied by clear and present dangers - as well as hidden threats.

Joseph Schumpeter
• Although Schumpeter devoted only a six-page chapter to “The Process of Creative
Destruction,” in which he described CAPITALISM as “the perennial gale of creative destruction,”
it has become the centrepiece of economic thinking on how modern economies evolve.
Schumpeter and the other Austrian School economists who adopt his succinct theory of the
free market’s ceaseless churning - echo capitalism’s critics, such as Karl Marx, in recognising
that lost jobs, ruined companies, and vanishing industries are the result of the inherent
consequences of the disruptive mechanism of economic growth.
• The corollary is that wealth springs eternal from the turmoil and chaos. Those societies that
allow creative destruction to operate in a free market economy with less state intervention –
tend, over time, to be more productive, grow faster and acquire more wealth. In those
societies where increased wealth is retained by Entrepreneurs – such as in the UK and USA
– there has been no real increase in the standard of living of the workforce for nearly sixty
years (forty years in the UK) – as measured by the number of Mars chocolate bars which may
be purchased on the average wage. In those societies where wealth is shared more equally
– such as in Northern Europe – their citizens work in new industries, have access to novel
and innovative products and services, and reap the benefits of shorter working hours, better
health, wealth, education and jobs, along with increased wages and higher living standards.

Joseph Schumpeter
• At the same time, attempts to soften the harsher aspects of creative destruction by trying to
preserve jobs or protect industries will lead to stagnation and decline, short-circuiting the
march of progress. Schumpeter’s enduring insights reminds us that capitalism’s pain and gain
are inextricably linked. The process of creating new industries does not go forward without
sweeping away the pre-existing order. The key enabler for economic transformation is the flow
of wealth from mature and stagnant industries to new and emerging industries - the transfer of
Capital generated by older companies (Cash Cows) into successor companies (Rising Stars).
• 'Creative Destruction‘ occurs when the arrival and adoption of new methods of production
effectively kills off older, established industries. An example of this is the introduction of
personal computers in the 1980's. This new industry, led by Microsoft and Intel, destroyed
many mainframe manufacturers. In doing so, technology entrepreneurs created one of the
most important industries of the 20th century. Personal computers are now being replaced by
devices from agile and innovative companies such as Apple and Samsung. Microsoft and
Nokia are in turn being destroyed - Windows-based smart phones and tablets from Microsoft
and Nokia now cling to less than 3% market share.

Joseph Schumpeter
• Companies show the same pattern of destruction and rebirth over many industrial cycles. Only
five of today’s hundred largest public companies were among the top hundred in 1917. Half of
the top hundred of 1970 had been replaced in the rankings by 2000. The Power of Technology
Innovation – driven by ENTREPRENEURSHIP and competition – drives the process of creative
destruction through the flow of capital from older, stagnant industries to new and emerging
industries. Schumpeter summed up the process of economic transformation as follows: -
• “The fundamental spark that sets up and keeps the economic engine in motion comes from
innovation – arranging existing resources in new and different ways to create novel and
innovative products and services. Entrepreneurial endeavour creates the new consumer
products and services, new markets, innovative methods of production, distribution or transport,
and new forms of industrial organization which drives economic growth.“ (p. 83)
• Entrepreneurs introduce new products and technologies with an eye toward making themselves
better off—the profit motive. New goods and services, new firms, and new industries compete
with existing ones in the marketplace, taking customers by offering lower prices, better
performance, new features, catchier styling, faster service, more convenient locations, higher
status, more aggressive marketing, or more attractive packaging. In another seemingly
contradictory aspect of creative destruction, the pursuit of self-interest ignites the progress that
makes others better off.

Joseph Schumpeter
• Producers survive by streamlining production with newer and better tools that make workers
more productive. Companies that no longer deliver what consumers want at competitive prices
lose customers, and eventually wither and die. The market’s “invisible hand” - a phrase owing
not to Schumpeter but to ADAM SMITH - shifts resources from declining sectors to more valuable
uses as workers, inputs, and financial capital seek their highest returns.
• The source of Joseph Schumpeter's dynamic, change-oriented, and innovation-based
economics was the Historical School of economics. Although Schumpeter’s writings could be
critical of the School, Schumpeter's work on the role of innovation and entrepreneurship can be
seen as a continuation of ideas originated by the Historical School – especially from the work of
Gustav von Schmoller and Werner Sombart. Schumpeter's scholarly learning is readily apparent
in his posthumous publication of the History of Economic Analysis – but many of his views
now appear to be somewhat idiosyncratic – and some even seem to be downright cavalier......
• Schumpeter criticized John Maynard Keynes and David Ricardo for the "Ricardian vice." Ricardo
and Keynes often reasoned in terms of abstract economic models, where they could isolate,
freeze or ignore all but a few major variables. According to Schumpeter, they were then free to
argue that one factor impacted on another in a simple monotonic cause-and-effect fashion. This
has led to the mistaken belief that one could easily deduce effective real-world economic policy
conclusions directly from a highly abstract and simplistic theoretical economic model.

Joseph Schumpeter
• Schumpeter thought that the greatest 18th century economist was Turgot, not Adam Smith, as
many economists believe today, and he considered Léon Walras to be the "greatest of all
economists", beside whom other economists' theories were just "like inadequate attempts to
capture some particular aspects of the Walrasian truth".
• Schumpeter's relationships with the ideas of other economists were quite complex - following
the views of neither Walras nor Keynes. There was actually some considerable professional
rivalry between Schumpeter and his peers. Schumpeter starts his most important contribution
to economic analysis The Theory of Economic Development – which describes business
cycles and economic development – with a treatise on circular flow in which he postulates that
slow or stationary economic growth occurs whenever innovation wave input from technology
research and development activities is reduced - or simply ceases. This form of stagnation in
economic development is, according to Schumpeter, described by Walrasian equilibrium.
• In developing the Economic Wave theory, Schumpeter postulated the idea that the
entrepreneur is the primary catalyst of industrial activity which develops in a cyclic fashion
along several discrete and interacting timelines – connecting generation waves with
entrepreneurship and capital funding, technology innovation with manufacturing process
improvements, and industrial investment cycles with economic growth These cycles acts to
stimulate the status-quo in an otherwise stagnant economic equilibrium or stationary economic
growth into a circular flow Thus the true hero of his story is the entrepreneur..

Joseph Schumpeter
• Schumpeter also kept alive the Russian Nikolai Kondratiev's concept of economic cycles in with
50-year periodicity - Kondratiev waves - and by extension, the 100-year cycle of the Century
Wave or Saeculum. Schumpeter suggested an integrated Economic Cycle Model in which the
four main cycles, Kondratiev (54 years), Kuznets (18 years), Juglar (9 years) and Kitchin (about
2-4 years) can be aggregated together to form a composite economic waveform. The economic
wave form series suggested here did not include the Kuznets Cycle simply because Schumpeter
did not recognize it as a valid cycle (see "Business Cycle" for further information). There was
actually some considerable professional animosity between Schumpeter and Kuznets. As far as
the segmentation of the Kondratiev cycle goes, Schumpeter further postulated that a single
Kondratiev cycle might be consistent with the aggregation of three lower-order Kuznets cycles.
• Each Kuznets wave could, itself, be made up of two Juglar waves. Similarly two or three Kitchin
cycles could form a higher-order Juglar cycle. If each of these were in harmonic phase, more
importantly if the downward arc of each was simultaneous so that the nadir (perigee) of each
cycle was coincident - it could explain disastrous economic slumps and their consequential
recessions and depressions. Schumpeter never proposed a rigid, fixed-periodicity model. He
saw that these cycles could vary in length over time - impacted on by various random, chaotic
and radically disruptive “Black Swan” events - catastrophes such as War, Famine and Disease.

Trends
Figure 1. Joseph Schumpter – Variable-length Economic Wave Series
Figure 2. Strauss-Howe – Variable-length Generation Wave Series
Cycle Pre-industrial (before 1860) Modern (post 1929)
Kitchen Inventory Cycle (KI-cycle) Stock-turn Cycle (3-5 years) One KI-cycle – 4.5 years
Juglar Fixed Investment Cycle (J-cycle) Business Cycle (7-11 years) One J-cycle - 9 years
Kuznets Infrastructure Cycle (KU-cycle) Property Cycle (15-25 years) One KU-cycle -18 years
Kondratiev Cycle (KO-cycle) Technology Cycle (45-60 years) One KO-cycle – 54 years
Grand-cycle / Super-cycle (GS-cycle) Saeculum (70 years +) Two KO-cycles - 108 years
Kitchen Cycle (KI-cycle) Production Cycle (3-5 years) Inventory Wave – 4.5 years
Juglar Fixed Investment Cycle (J-cycle) Business Cycle (8-11 years) Economic Wave - 9 years
Kuznets Infrastructure Cycle (KU-cycle) Property Cycle (20-25 years) Infrastructure Wave - 18 years
Strauss-Howe Cycle (SH-cycle) Population Cycle (20-30 years) Generation Wave - 24 years
Grand-cycle / Super-cycle (GS-cycle) Saeculum (70 years +) Century Wave – 96-108 years

Strauss–Howe Generation Wave
• The Strauss–Howe Generation Wave theory, created by authors William Strauss and Neil
Howe, identifies a recurring generational cycle in European and American history. Strauss
and Howe lay the groundwork for the theory in their 1991 book Generations, which retells the
history of America as a series of generational biographies going back to 1584. In their 1997
book The Fourth Turning, the authors expand the theory to focus on a fourfold cycle of
generational types and recurring mood eras in American history. Their consultancy, Life
Course Associates, has expanded on the concept in a variety of publications since then.
• The Strauss–Howe Generation Wave theory was developed to describe the history of the
United States, including the founding 13 colonies and their Anglo-Saxon antecedents, and this
is where the most detailed research has been done. However, the authors have also
examined generational trends elsewhere in the world and identified similar cycles in several
developed countries. The books are best-sellers and the theory has been widely influential
and acclaimed in the USA. Eric Hoover has called the authors pioneers in a burgeoning
industry of consultants, speakers and researchers focused on generations.
• Academic response to the theory has been somewhat mixed - some American authorities
applauding Strauss and Howe for their "bold and imaginative thesis," and others (mostly
European) criticizing the theory for the lack of any rigorous empirical evidence for their claims,
and a perception that many aspects of their “one size fits all” argument gloss over real
differences within the population of each generation. What is apparent is that Strauss and
Howe have failed miserably to grasp the importance of Generation Waves driving Technology
Innovation in the economy – instead, referring to weak and insipid hypotheses of “Spiritual
Awareness” and suchlike driving Generational Change through the saeculum (Century Wave).

Strauss–Howe Generation Waves
1. Arthurian Generation (1433–1460) (H)
2. Humanist Generation (1461–1482) (A)
3. Reformation Generation (1483–1511) (P)
4. Reprisal Generation (1512–1540) (N)
5. Elizabethan Generation (1541–1565) (H)
6. Parliamentary Generation (1566–1587) (A)
7. Puritan Generation (1588–1617) (P)
8. Cavalier Generation (1618–1647) (N)
9. Glorious Generation (1648–1673) (H)
10. Enlightenment Generation (1674–1700) (A)
11. Awakening Generation (1701–1723) (P)
12. Liberty Generation (1724–1741) (N)
13. Republican Generation (1742–1766) (H)
14. Compromise Generation (1767–1791) (A)
15. Transcendental Generation (1792–1821) (P)
16. Gilded Generation (1822–1842) (N)
17. Progressive Generation (1843–1859) (A)
18. Missionary Generation (1860–1882) (P)
19. Lost Generation (1883–1900) (N)
20. G.I. Generation (1901–1924) (H)
21. Silent Generation (1925–1942) (A)
22. Baby Boom Generation (1943–1960) (P)
23. Generation X (Gen X) (1961–1981) (N)
24. Millennial Generation (Gen Y) (1982–2004) (H)
25. Homeland Generation (Gen Z) (2005-present) (A)

Generation and Century Waves
Saeculum McLaughlin
Cycle
Spiritual Age High, Awakening,
Secular Crisis
Strauss-Howe
Generation
Generation
Date / Type
1415 - 1514 Pre-Columbian Renaissance
(1517-1539)
Retreat from France
Arthurian Generation 1433–1460) (H)
Wars of the Roses
(1455-1487)
War of the Roses
Humanist Generation 1461–1482) (A)
High: Tudor Renaissance Reformation Generation 1483–1511) (P)
1515 - 1614 Columbian Reformation
(1517-1539)
Awakening: Protestant
Reformation
Reprisal Generation 1512–1540) (N)
Spanish Armada
(1580-1588)
Intolerance and Martyrdom
Elizabethan Generation 1541–1565) (H)
Crisis: Armada Crisis Parliamentary Generation 1566–1587) (A)
High: Merrie England Puritan Generation 1588–1617) (P)
1615 - 1714 Colonial Early Enlightenment
(1610-1640)
English Civil War
(1675-1704)
Cavalier Generation 1618–1647) (N)
Glorious Generation 1648–1673) (H)
Enlightenment Generation 1674–1700) (A)
1715 - 1814 Revolutionary Late Enlightenment
(1730-1760)
American Revolution
(1773-1794)
Awakening Generation 1701–1723) (P)
Liberty Generation 1724–1741) (N)
Republican Generation 1742–1766) (H)
Compromise Generation 1767–1791) (A)

Saeculum McLaughlin
Cycle
Secular Crisis
Strauss-Howe
Generation
Generation
Date / Type
1815 - 1914 Victorian Transcendental
(1800-1830)
Napoleonic Wars
(1860-1865)
Transcendental Generation 1792–1821) (P)
Gilded Generation 1822–1842) (N)
Progressive Generation 1843–1859) (A)
Missionary Generation 1860–1882) (P)
Lost Generation 1883–1900) (N)
1915 - 2014 Loss of Empires Missionary Awakening
(1890-1920)
WWI, Depression & WWII
(1929-1946)
G.I. Generation 1901–1924) (H)
Silent Generation 1925–1942) (A)
Baby Boom Generation 1943–1960) (P)
Cold War Baby Boom Awakening
(1960-1980)
Regional Wars, Terrorism,
Insecurity
Generation X (Generation X) 1961–1981) (N)
Millennial 21st century Awakening
(2000 - 2020)
Insecurity
Millennial Generation (Gen Y) 1982–2004) (H)
Insecurity
Homeland Generation (Gen Z) 2005–2025 (A)
2015-2114 Post-Millennial 21st century Apocalypse
(2020 - 2040)
Global Food, Energy and
Water (FEW) Crisis
Apocalyptic Generation (Gen A) 2025–2050 (P)
Post-Apocalyptic
Realisation (2040 - 2060)
Wars, Disease, Famine ,
Terrorism and Insecurity
Post-Apocalyptic Generation
(Gen B)
2050–2070 (N)
Post-Apocalyptic Recovery
(2040 - 2060)
Recovery Generation (Gen C) 2070–2090) (H)

Trends – Innovation and Capital
Complex Market Phenomena are simply: - "the outcomes of
endless conscious, purposeful human actions, by countless
individuals exercising personal choices and preferences - each
of whom is trying as best they can to optimise their
circumstances in order to achieve various needs and desires.
Individuals, through economic activity strive to attain their
preferred outcomes - whilst at the same time attempting to avoid
any unintended consequences leading to unforeseen
outcomes.....”
• Ludwig von Mises – Economist •

Horizon and Environment Scanning,
Tracking and Monitoring Processes
• Horizon and Environment Scanning Event Types – refer to Weak Signals of any unforeseen,
sudden and extreme Global-level transformation or change Future Events in either the military,
political, social, economic or environmental landscape - having an inordinately low probability of
occurrence - coupled with an extraordinarily high impact when they do occur (Nassim Taleb).
• Horizon Scanning Event Types
– Technology Shock Waves
– Supply / Demand Shock Waves
– Political, Economic and Social Waves
– Religion, Culture and Human Identity Waves
– Art, Architecture, Design and Fashion Waves
– Global Conflict – War, Terrorism, and Insecurity Waves
• Environment Scanning Event Types
– Natural Disasters and Catastrophes
– Human Activity Impact on the Environment - Global Massive Change Events
• Weak Signals – are messages, subliminal temporal indicators of ideas, patterns, trends or
random events coming to meet us from the future – or signs of novel and emerging desires,
thoughts, ideas and influences which may interact with both current and pre-existing patterns
and trends to predicate impact or effect some change in our present or future environment.

HUMAN ACTIVITY CYCLES
SHORT PERIOD HUMAN ACTIVITY WAVES
• Price Curves – short-term, variable Market Trends,
• Seasonal Activities – Farming, Forestry and Fishing
• Trading and Fiscal Cycles – Diurnal to Annual (1 day to 1 year)
MEDIUM PERIOD HUMAN ACTIVITY WAVES – Joseph Schumpter Series
• Kitchin inventory cycle of 3–5 years (after Joseph Kitchin);
• Juglar fixed investment cycle of 7–11 years (often referred to as simply 'the business cycle’);
• Kuznets infrastructural investment cycle of 15–25 years (after Simon Kuznets);
• Generation Wave – 15, 20, 25 or 30 years (four or five per Saeculum and Innovation Wave)
• Innovation Wave – Major Scientific, Technology and Industrial Innovation Cycles of about 80 years
– Sub-Innovation Waves – Minor Technology Innovation Cycles @ 40 years (2 x Kuznets Waves ?)
• Kondratiev wave or long technological cycle of 45–60 years (after Nikolai Kondratiev)
• Saeculum or Century Wave – Major Geo-political rivalry and conflict waves of about 100 years
– Sub-Century Waves – Minor Geo-political Cycles @ 50 years (Kondratiev long technological wave)

HUMAN ACTIVITY CYCLES
LONG PERIOD HUMAN ACTIVITY WAVES
• Culture Moments – Major Human Activity achievements - Technology, Culture and History
• Industrial Cycles –phases of evolution for any given industry at any specific time / location
• Technology Shock Waves – Stone, Agriculture, Bronze, Iron, Steam, Information Ages etc.
– Stone – Tools for Hunting, Crafting Artefacts and Making Fire
– Fire – Combustion for Warmth, Cooking and changing the Environment
– Agriculture – Neolithic Age Human Settlements
– Bronze – Bronze Age Cities and Urbanisation
– Ship Building – Communication, Culture and Trade
– Iron – Iron Age Empires, Armies and Warfare
– Gun-powder – Global Imperialism and Colonisation
– Coal – Mining, Manufacturing and Mercantilism
– Engineering – Bridges, Boats and Buildings
– Steam Power – Industrialisation and Transport
– Chemistry – Dyestuff, Drugs, Explosives and Agrochemicals
– Internal Combustion – Fossil Fuel dependency
– Physics – Satellites and Space Technology
– Nuclear Fission – Globalisation and Urbanisation
– Digital Communications – The Information Age
– Smart Cities of the Future – The Solar Age – Renewable Energy and Sustainable Societies
– Nuclear Fusion– The Hydrogen Age - Inter-planetary Human Settlements
– Space-craft Building – The Exploration Age - Inter-stellar Cities and Galactic Urbanisation

Business Cycles, Patterns and Trends –
Economic Boom and Bust

Trends – Innovation and Capital
• The purpose of this section is to examine the nature and content of Clement Juglar’s contribution
to Business Cycle Theory and then to compare and contrast it with that of Joseph Schumpeter’s
analysis of cyclical economic fluctuations. There are many similarities evident - but there are
also some important differences between the two competing theories. Schumpeter’s classical
Business Cycle is driven by a series of multiple co-dependent technology innovations of low to
medium impact - whereas according to Juglar the trigger for a runaway bull markets is market
speculation fuelled by the over-supply of credit. A deeper examination of Juglar’s business
cycles can reveal the richness of Juglar’s original and very interesting approach. Indeed Juglar,
without having proposed a complete theory of business cycles, nevertheless provides us with an
original Money Supply theory of economic boom cycles supporting a more detailed comparison
and benchmarking between these two co-existing and compatible theories of business cycles.
• In a specific economic context characterised by the rapid development of both industry and
trade, Juglar's theory interconnects the development of new markets with credit availability for
speculative investments – and the bank’s behaviours in response to the various phases of the
Business Cycle – Crisis, Liquidation, Recovery, Growth and Prosperity, . The way that the
money supply, credit availability and industrial development interact to create business cycles is
quite different in Juglar’s viewpoint than that expressed by Schumpeter in his theory of economic
development – growth driven by innovation - but does not necessarily express any fundamental
contradiction. Entrepreneurs, through innovation , attract capital funding from investors for start-
ups and scale-ups. Compared and contrasted, these two different approaches refer to market
phenomena which are both separate and different – but still entirely compatible and co-existent.

Waves, Cycles, Patterns and Trends
• Business Cycles were once thought to be an economic phenomenon due to periodic
fluctuations in economic activity. These mid-term economic cycle fluctuations are usually
measured using Real (Austrian) Gross Domestic Product (rGDP). Business Cycles take
place against a long-term background trend in Economic Output – growth, stagnation or
recession – which affects Money Supply as well as the relative availability and consumption
(Demand v. Supply and Value v. Price) of other Economic Commodities. Any excess of
Money Supply may lead to an economic expansion or “boom”, conversely shortage of
Money Supply (Money Supply shocks – the Liquidity Trap) may lead to economic
contraction or “bust”. Business Cycles are recurring, fluctuating levels of economic activity
experiences in an economy over a significant timeline (decades or centuries).
• The five stages of Business Cycles are growth (expansion), peak, recession (contraction),
trough and recovery. Business Cycles were once widely thought to be extremely regular,
with predictable durations, but today’s Global Market Business Cycles are now thought to
be unstable and appear to behave in irregular, random and even chaotic patterns – varying
in frequency, range, magnitude and duration. Many leading economists now also suspect
that Business Cycles may be influenced by fiscal policy as much as market phenomena -
even that Global Economic “Wild Card” and “Black Swan” events are actually triggered
by Economic Planners in Government Treasury Departments and in Central Banks as a
result of manipulating the Money Supply under the interventionist Fiscal Policies adopted by
some Western Nations.

Scenario Planning and Impact Analysis

• Many Economists and Economic Planners have widely arrived at the consensus that a large
majority of organizations have yet to develop sophisticated Economic Modelling systems and
integrated their outputs into the strategic planning process. The objective of this paper is to
shed some light into the current state of the business and economic environmental scanning,
tracking, monitoring and forecasting function in organizations Impacted by Business Cycles.
• Major periodic changes in business activity are due to recurring cyclic phases in economic
expansion and contraction - classical “bear” and “bull” markets, or “boom and bust” cycles.
The time series decomposition necessary to explain this complex phenomenon presents us
with many interpretive difficulties – due to background “noise” and interference as multiple
business cycles, patterns and trends interact and impact upon each other. We are now able
to compare cyclical movements in output levels, deviations from trend, and smoothed growth
rates of the principal measures of aggregate economic activity - the quarterly Real (Austrian)
GDP and the monthly U.S. Coincident Index - using the phase average trend (PAT).
• This section provides a study of business cycles - which are defined as periodic sequences of
expansion and contraction in the general level of economic activity. The proposed Wave-
form Analytics approach helps us to identify discrete Cycles, Patterns and Trends in Big Data.
This approach may be characterised as periodic sequences of high and low business activity
resulting in cyclic phases of increased and reduced output trends – supporting an integrated
study of disaggregated economic cycles that does not require repeated multiple and iterative
processes of trend estimation and elimination for every possible business cycle duration..
Economic Waves, Cycles, Patterns and Trends

• Real (Austrian) business cycle theory assigns a central role to shock waves as the primary
source of economic fluctuations or disturbances. As King and Rebelo (1999) discuss in
.Resuscitating Real Business Cycles, when persistent technology shocks are fed through a
standard real business cycle model – then the simulated economy displays impact patterns
which are similar to those exhibited by actual business cycles. While the last decade has
seen the addition of other types of shocks in these models - such as monetary policy and
government spending - none has been shown to be a central impulse to business cycles.
• A trio of recent papers has called into question the theory that technology shocks have
anything to do with the fundamental shape of business cycles. Although they use very
different methods, Galí (1999), Shea (1998) and Basu, Kimball, and Fernald (1999) all
present the same result: positive technology shocks appear to lead to declines in labour
input.1 Galí identifies technology shocks using long-run restrictions in a structural VAR;
Shea uses data on patents and R&D; and Basu, Kimball and Fernald identify technology
shocks by estimating Hall-style regressions with proxies for utilization.
• In all cases, they find significant negative correlations of hours with the technology shock
waves, Gail's paper also studies the effects of the non-technology shocks – such as
Terrorism, Insecurity and Military Conflicts, as well as Monetary Supply and Commodity-
price Shocks - which he suggests might be interpreted as demand / supply shocks.
These shocks produce the typical business cycle co-movement between output and hours.
In response to a positive shock, both output and hours show a rise in the typical hump-
shaped pattern. Productivity also rises - but with only temporarily economic effect –
modifying Business Cycles rather than radically altering them.
Economic Waves, Cycles, Patterns and Trends

Wholesale Price Index – 1790-1640

Introduction - Business Cycles,
Patterns and Trends
• Prior to widespread international industrialisation (Globalisation), the Kondratiev Cycle (KO-
cycle) represented phases of industrialisation – successive waves of incremental development in
the fields of Technology and Innovation – which, in turn could be resolved into a further series of
nested Population Cycles (Human Generation Waves – popularised by Strauss and Howe). The
economic impact of Generation Waves was at least partially influenced by the generational war
cycle, with its impact on National Fiscal Policy (government finances). Shorter economic cycles
appeared to fit into the longer KO-cycle, rather existing independently - possibly harmonic in
nature. Hence financial panics followed a real estate cycle of about 18 years, denoted as the
Kuznets Cycle (KU-cycle) . Slumps occurring in between the Kuznets cycle at a half-cycle that
were of similar length to the “Boom-Bust” Business Cycles first identified by Clement Juglar.
• Business Cycles were apparently of random length - up to a full Juglar Business Cycle in the
range of 8 to 11 years . With the arrival of industrialisation, the ordinary Business Cycle was
now joined by a new Economic phenomenon – the Inventory Cycle, or Kitchen Cycle (KI-cycle)
with a range of 3-5 years duration – which was later challanged by a new, decreased and lower,
more uniform length (average 40 months). The Kuznets Cycle (KU-cycle) and Kondratiev Cycles
carried on much as before. From the changes induced by industrialisation, the Robert Bronson
SMECT structure emerged, in which sixteen 40 month Kitchen cycles "fit" into a standard
Kondratiev cycle – and the KO-cycle subdivided into 1/2, 1/4 and 1/8-length sub-cycles.

Trend - Introduction
• In his recent book on the Kondratiev cycle, Generations and Business Cycles - Part I -
Michael A. Alexander further developed the idea first postulated by Strauss and Howe - that the
Kondratiev Cycle (KO-cycle) is fundamentally generational in nature. Although it had been 28
years since the last real estate peak in1980 - property valuations had yet to reach previous
peak levels when the Sub-Prime Crisis began in 2006. Just as it had done in 1998 – 2000, the
property boom spawned by the Federal Reserve's rate cuts continued to drive increasing real
estate valuations for a couple of more years -- until finally the Credit Crunch arrived in 2008.
• From late Medieval times up until the early 19th century, the Kondratiev Cycle (KO-cycle) was
thought to be roughly equal in length to two human generation intervals - or approximately 50
years in duration. Thus two Kondratiev cycles in turn form one saeculum, a generational cycle
described by American authors William Strauss and Neil Howe. The KO-cycle was closely
aligned with Technology Arms Races and wars – so a possible mechanism for the cycle was
alternating periods (of generational length) featuring government debt growth and decline
associated with war finance. After the world economy became widely industrialised in the late
19th century – the relation between the cycles seem to have changed. Instead of two KO-
cycles per saeculum – Alexander claimed that there was now only found to be one.
• Such theory-driven Deterministic attempts to fit the observed Economic Data into fixed-length
hypothetical Business Cycles or Economic Waves – are doomed to failure. Much better
results are obtained from data-driven Probabilistic approaches – let the Data define the Cycles.

Trends
Figure 3. Robert Bronson's Deterministic SMECT System of Fixed-length Cycle Periodicity
Figure 4. Michael Alexander – Fixed-length Business Cycle and Bear Market Cycle Periodicity
Juglar Cycle (J-cycle) Business Cycle (8-11 years) Economic Wave - 9 years
K0-trend / Infrastructure Wave Property Cycle (20-25 years) Infrastructure Wave - 18 years
K0-wave / Generation Wave Population Cycle (20-30 years) Generation Wave - 36 years
K0-cycle / Innovation Wave Technology Cycle (45-60 years) Innovation Wave - 72 years
Grand-cycle / Super-cycle (GS-cycle) Saeculum (70 years +) Century Wave - 108 years
Kitchen Cycle (KI-cycle) Production Cycle (3-5 years) Inventory Wave- 40 months
Juglar Cycle (J-cycle) Business Cycle (8-11 years) Economic Wave - 9 years
Kuznets Cycle (KU-cycle) Property Cycle (20-25 years) Infrastructure Wave -18 years
Strauss-Howe Cycle (SH-cycle) Population Cycle (20-30 years) Generation Wave - 36 years
Kondratiev Cycle (KO-cycle) Technology Cycle (45-60 years) Innovation Wave - 72 years

Periodicity - Business Cycles,
Patterns and Trends
• Economic Periodicity appears less metronomic and more irregular from 1860 to 1929 (and
from 2000 onwards). Strauss and Howe claim that these changes in Economic Periodicity
were created by a shift in economic cycle dynamics caused by industrialisation around the
time of the American Civil War – hinting towards Schumpter’s view that Innovation and
Black Swan events can impact on Economic Cycle periodicity. Michael Alexander claims
that this new pattern only emerged after1929 – when the Kondratiev Cycle (KO-cycle)
appeared lengthened and at the same time the Saeculum shortened - to the point where
they both became roughly equal, and merged with a Periodicity of about 72 years long.....
• Michael Alexander further maintains that each Kondratiev wave can be subdivided into two
Kondratiev seasons, each associated with a secular market trend. Table 1 shows how
these cycles were related to each other before and after industrialization. The Kondratiev
cycle itself consists of two Kondratiev waves, each of which is associated with sixteen
occurrences or iterations of the Stock Cycle. The Juglar cycle was first noted by Clement
Juglar in 1860’s and existed in pre-industrial economies. The other two cycles were
identified much later (Kitchen in 1923). The Kuznets real-estate cycle, proposed in 1930,
still persists and this might be thought of as a periodic infrastructure investment cycle
which is typical of industrialised economies after the 1929 Depression. Shorter economic
cycles also exist, such as the Kuznets cycle of 15-20 years (related to building/real estate
valuation cycles), along with the Juglar cycle of 7-11 years (related to Stock Market
activity) and the Kitchen cycle of about 40 months (related to Stock or Inventory Cycles).

Economic Models
• At the onset of the Great Depression 1927-29, many economists believed that : -
“left alone, markets were self-correcting and would return to an ‘equilibrium’ that efficiently
utilised capital, workers and natural resources… this was the inviolate and core axiom of
‘scientific economics’ itself…
• A month after the Great Crash, economists at Harvard University, had made a statement (from
Richard Parker - John Kenneth Galbraith: his life, politics and economics, 2005, p.12) that : -
“a severe depression like that of 1920-21 is outside the range of probability.”
• They could not have been more wrong. In a new theory, Neo-liberal Keynesianism, which
emerged with the publication of John Maynard Keynes’ “The General Theory of Employment,
Interest and Money.” - Keynes had made use of a radically different set of assumptions, which
could lead to a startling new possibility of an alternative economic equilibrium consisting of
simultaneous high unemployment and low income – a stark and different equilibrium condition
where the economy could be forced into a deep state of inefficient economic equilibrium - or
stagnation - where the economy would stagnate (get stuck in a deep trough) – a condition from
which it was very difficult to escape. In Neo-classical Economic theory – this economic condition
was thought to be both implausible and impossible.

Economic Modelling and Long-range
Forecasting – Boom and Bust
• The way that we think about the future must mirror how the future actually
unfolds. We have learned from recent experience, that the future is not a
straightforward extrapolation of simple, single-domain trends. We now have
to consider ways in which random, chaotic and radically disruptive events
may be factored into enterprise threat assessment and risk management
frameworks - and incorporated into enterprise decision-making structures
and processes.
• Economic Modelling and Long-range Forecasting is driven by Data
Warehouse Structures and Economic Models containing both Historic (up to
20 years daily closing prices for LNG and all grades of crude) and Future
values (daily forecast and weekly projected price curves, monthly and
quarterly movement predictions, and so on for up to 20 years into the future
– giving a total timeline of 40-year (+ / - 20 years Historic and Future trends
summary, outline movements and highlights). Forecast results are obtained
using Economic Models - Quantitative (Technical) Analysis (Monte Carlo
Simulation, Pattern and Trend Analysis - Economic growth . contraction
and Recession / Depression shapes along with Commodity Price Curve
Data Sets) – in turn driving Qualitative (Narrative) Scenario Planning and
Impact Analysis techniques.

Robert Bronson's SMECT
Forecasting Model
Each thing is of like form from everlasting and comes
round again in its cycle - Marcus Aurelius
Alongside Joseph Schumpter’s Economic Wave Series
and Strauss and Howe’s Generation Waves - is Robert
Bronson's SMECT Forecasting Model - which
integrates both multiple Business and Stock-Market
Cycles into its structure.....

Robert Bronson SMECT System
• Alongside Joseph Schumpter’s Economic Wave Series and Strauss and Howe’s Generation
Waves is Robert Bronson's SMECT Forecasting Model - which Integrates Multiple Business and
Stock-Market Cycles in its structure.. After 1933, the Kondratiev cycle, representing Technology
and Innovation Waves still persisted - but its length gradually increased to about 72 years - as it
remains today. The Kuznets real estate cycle continued, but was much weaker for about 40
years until the 1970's when something like the old cycle was reactivated again in the economy.
• A number of ears ago, Bob Bronson, principal of Bronson Capital Markets Research, developed
a useful model for predicting certain aspects of the occurrence characteristics of both Business
cycles (stock-market price curves) and Economic cycles (Fiscal Policies). The template for this
model graphically illustrates that the model not only explains the interrelationship of these past
cycles with a high degree of accuracy - a minimum condition for any meaningful modelling tool,
but it also has been, and should continue to be, a reasonably accurate forecasting mechanism.
• Robert Bronson's SMECT System is a Forecasting Model that integrates multiple Business
(Stock-Market Movement) and Economic Cycles. Since there is an obvious interrelationship
between short-term business cycles and short-term stock-market cycles, it is useful to be able to
discover and understand their common elements - in order to develop an economic theory that
explains the underlying connections between them and, in our case, to form meaningful,
differentiating forecasts - especially over longer-term horizons. By pulling back from the close-up
differences and viewing the cycles from a longer-term perspective, their common features
become more apparent , Business Cycles are also subject to unexpected impact from external
or “unknown” forces - Random Events – which are analogous to Uncertainty Theory in the way
that they become manifest - but are subject to different interactions and feedback mechanisms.

Robert Bronson SMECT System
• It is a well-know and widely recognised phenomenon that stock market movements are
the single best short-term economic indicator. Dynamic stock market movements
anticipate the phases of short-term business cycles. Although there have been bear
markets which were not followed by recessions, there has never been a U.S. recession
that was not preceded by a bear market. Since 1854, there have been 33 recessions,
as determined by the National Bureau of Economic Research (NBER) - each economic
contraction always preceded by a bear stock market "anticipating" it. Most relevant for
our purposes, the stock market also anticipated the end of each recession with bear-
market lows, or troughs – occurring on average six months before economic growth in
consecutive quarters signalled the official end of those recessions.
• An alternative thesis proposed Strauss and Howe has also noted the discontinuous
behaviour of their Generation Waves at the same time – the so-called “War Anomaly”.
What is happening here ? Strauss and Howe attribute these changes to a skipped or a
“lost generation” caused by catastrophic human losses in the American Civil War - and
later, the Great War. The unusually poor economic outcomes after these conflicts may
be due to massive War Debts and the absence of economic stimulation through
Entrepreneurship and Innovation – caused by the absence of a “lost generation”.

Wave-form Analytics in Econometrics

Wave-form Analytics
Track and
Monitor
Investigate
and
Analyse
Scan and
Identify
Separate
and Isolate
Communicate Discover
Verify and Validate Disaggregate
Background Noise
Individual Wave
Composite
Waves
Wave-form
Characteristics

• Biological, Sociological, Economic and Political systems all tend to demonstrate
Complex Adaptive System (CAS) behaviour - which appears to be more similar
in nature to biological behaviour in a living organism than to Disorderly, Chaotic,
Stochastic Systems (“Random” Systems). For example, the remarkable
adaptability, stability and resilience of market economies may be demonstrated by
the impact of Black Swan Events causing stock market crashes - such as oil price
shocks (1970-72) and credit supply shocks (1927- 1929 and 2008 onwards).
Unexpected and surprising Cycle Pattern changes have historically occurred
during regional and global conflicts being fuelled by technology innovation-driven
arms races - and also during US Republican administrations (Reagan and Bush -
why?). Just as advances in electron microscopy have revolutionised biology -
non-stationary time series wave-form analysis has opened up a new space for
Biological, Sociological, Economic and Political system studies and diagnostics.
• The Wigner-Gabor-Qian (WGQ) spectrogram method demonstrates a distinct
capability for identifying revealing multiple and complex superimposed cycles or
waves within dynamic, noisy and chaotic time-series data sets – without the need
for using repetitive individual wave-form estimation and elimination techniques.

• Wave-form Analytics – characterised as periodic sequences of regular, recurring
high and low activity resulting in cyclic phases of increased and reduced periodic
trends – supports an integrated study of complex, compound wave forms in
order to identify hidden Cycles, Patterns and Trends in Economic Big Data.
• The existence of fundamental stable characteristic frequencies found within large
aggregations of time-series economic data sets (“Big Data”) provides us with
strong evidence and valuable insights about the inherent structure of Business
Cycles. The challenge found everywhere in business cycle theory is how to
interpret very large scale / long period compound-wave (polyphonic) time series
data sets which are in nature dynamic (non-stationary) such as the Schumpter
Economic Wave series - Kitchen, Juglar, Kusnets, Kondriatev - along with other
geo-political and economic waves - the Saeculum Century Wave and Strauss /
Howe Generation Waves.

Schumpter Economic Wave series: -
1. Kitchen Inventory Cycle - 1.5 - 3 years
2. Juglar Business Cycle - 7 - 11 years
3. Kusnets Technology Innovation Cycle - 20-25 years
4. Kondriatev Infrastructure Investment cycle - 40-50 years
Strauss / Howe Generation Waves
1. Generation Waves - 18-25 years
2. The Saeculum - 80-100 years
Black Swan Event Types – Fiscal Shock Waves
1. Money Supply Shock Waves
2. Commodity Price Shock Waves
3. Sovereign Debt Default Shock Waves

The generational interpretation of the post-depression era
• The generational model holds that the Kondriatev Infrastructure Investment Cycle (K-cycle ) has
shifted from one-half to a full saeculum in length as a result of industrialization and is now about 72
years long. The cause of this lengthening is the emergence of government economic management,
which itself is a direct effect of industrialization as mediated through the generational saeculum
cycle.

The generational interpretation of the post-depression era
• The generational model holds that the Kondriatev Infrastructure Investment
Cycle (K-cycle ) has shifted from one-half to a full saeculum in length as a
result of industrialization and is now about 72 years long. The cause of this
lengthening is the emergence of government economic management, which
itself is a direct effect of industrialization as mediated through the generational
saeculum cycle. The rise of the industrial economy did more than simply
introduce the Kitchen cycle. It also increased the intensity of the generation-
related Kitchen, Kuznets and Kondratiev cycles - all of which had already
been part of the pre-industrial economy.
• Thus, while the Kuznets-related Panic of 1819 was the first panic to make it
into the history books, it was a pretty mild bear market. The Panic of 1837 was
worse and the one in 1857 worse yet. The Panic of 1873 ushered in the
second worst bear market of all time. The depression following the Panic of
1893 was the worst up to that time. This depression was the first to take place
with a majority of the population involved in non-agricultural occupations.
Although hard times on the farm were a frequent occurrence, depressions did
not usually mean hunger. Yet for the large numbers of urban workers thrown
onto "the industrial scrap heap" the depression of the 1890's produced a level
of suffering unprecedented for a business fluctuation.

Saeculum or
Century Waves
• Long-term Economic
and Geopolitical Wave
Series – 50-100 years
• Regional and Global
Geopolitical Rivalry –
Human Conflict fuelling
Technology Arms Races
• Entrepreneurial-driven
Generation Waves
creating Technology
Innovation and driving
Economic Growth.

Natural v. Human Activity Cycles
• It seems entirely possible, even probable, that much Periodic Human Activity – Business,
Economic, Social, Political, Historic and Pre-historic (Archaeology) Human Activity Cycles
– may be compatible with, and map onto ,one or more of the Natural Periodic Cycles.: -
• Terrestrial Lunar and Solar Natural Cycles - Diurnal to Annual (1 day to 1 year)
– Tidal Deposition Lamellae in Deltas, Estuaries and Salt Marshes – Diurnal
– Seasonal Growth rings in Stromatolites, Stalagmites and Trees - Annual / Biannual
– Lamellae in Ice Cores, Calcite Deposits, Lake and Marine Sediments – Annual / Biannual
• Human Activity - Annual Cycles –
– Daily / Seasonal Agriculture, Trading and Ritual Cycles – Diurnal to Annual (1 day to 1 year)
• Short Period Natural Resonance / Harmonic / Interference Waves –
– Southern Oscillation / Lunar, / Solar Activity @ 3, 5, 7,11 and 19 years
• Schumpeter Composite Economic Wave Series -
– Resonance / Harmonic Wave Cycles @ 3, 5, 7,11 & 15, 20, 25 years
– Kitchin inventory cycle of 3–5 years (after Joseph Kitchin);
– Juglar fixed investment cycle of 7–11 years (often referred to as 'the business cycle’);
– Kuznets infrastructural investment cycle of 15–25 years (after Simon Kuznets);

Natural v. Human Activity Cycles
• It appears that many Human Activity Cycles - Business, Social, Political, Economic, Historic and Pre-
historic (Archaeology) Cycles - may be compatible with, and map onto the twenty-six iterations of
Dansgaard Oeschger and Bond Cycles Climatic Series with major periodicity 1470 years (and 800
to 1000 years) Oceanic Climate Forcing - Bond Climatic Cycles - 1470 years (and 800 to 1000 years) –
• Solar Climate Forcing - Milankovitch Cycles – Solar Insolation driving Pleistocene Ice Ages: –
– Neanderthal Culture
– Solutrean Culture
– Clovis Culture
– Neolithic Agricultural Revolution
• Oceanic Climate Forcing - Dansgaard-Oeschger and Bond Cycles - driving the duration of Civilisations
– Bronze Age City States
– Iron Age Mercantile Armies and Empires
– Western Roman Empire (300 BC – 500 AD
– Eastern Roman Empire (500 – 1300 AD)
– Islamic Empire – (800 - 1300 AD)
– Vikings and Normans - Nordic Ascendency (700-1500 AD) (Medieval “mini Ice Age”)
– The Anglo-French Rivalry – Norman Conquest to Entente Cordial (1066 -1911)
– Pre-Columbian Americas – Mayan, Inca and Aztec Civilisations
– Pueblo Indians (Anastasia) – drought in South-Western USA
– Asian Civilisation – Han, Chin, Ming Chinese Dynasties, Aryan, Mongol and Khmer (Amkor)
– Pacific – Polynesian Expansion – from Hawaii to Easter Island and New Zealand

Wave Theory Of Human Activity
• Wave-Form Analytics and Cycle Mapping - It also appears that many Human Activity
Cycles - Social, Business, Political, Economic, Historic & Archaeology (Pre-historic)
Cycles - may be compatible with, and map incrementally onto one another, over time .....
• Schumpter Business Cycles –
– Kitchen, Juglar, and Kuznets Business Cycles map onto
– Strauss and Howe Generation Wave Series (20-25 years)
• Industry Cycles –
– Strauss and Howe Generation Wave Series (20-25 years) which map onto
– Innovation waves (40-80 years) - and Generation Waves may also map onto
– Kondratiev - long technology innovation investment cycle (50 years)
• Economic Waves –
– Kondratiev long infrastructure investment cycle (50 years) maps onto
– Saeculum Century Waves – Geo-political cycles (100 years)
• Saeculum Century Waves –
– Saeculum Century Waves – Geo-political cycles map onto Civilisations (variable)
– Civilisations (variable) map onto Technology Shock waves (variable)
• Technology Shock Waves – Stone, Agriculture, Bronze, Iron, Wind Power, Water Power,
Steam Power, Internal Combustion, Nuclear Fission, Nuclear Fusion etc.

Human Activity Cycles
SHORT PERIOD HUMAN ACTIVITY WAVES
• Price Curves – short-term, variable Market Trends,
• Seasonal Activities – Farming, Forestry and Fishing
• Trading and Fiscal Cycles – Diurnal to Annual (1 day to 1 year)
MEDIUM PERIOD HUMAN ACTIVITY WAVES – Joseph Schumpter Series
• Kitchin inventory cycle of 3–5 years (after Joseph Kitchin);
• Juglar fixed investment cycle of 7–11 years (often referred to as 'the business cycle’);
• Kuznets infrastructural investment cycle of 15–25 years (after Simon Kuznets);
• Generation Wave – 15, 20, 25 or 30 years (four or five per Saeculum and Innovation Wave)
• Innovation Wave – Major Scientific, Technology and Industrial Innovation Cycles of about 80 years
– Sub-Innovation Waves – Minor Technology Innovation Cycles @ 40 years (2 x Kuznets Waves ?)
• Kondratiev wave or long technological cycle of 45–60 years (after Nikolai Kondratiev)
• Saeculum or Century Wave – Major Geo-political rivalry and conflict waves of about 100 years
– Sub-Century Waves – Minor Geo-political Cycles @ 50 years (Kondratiev long technological wave)

• Saeculum or Century Waves – Human Conflict, Technology and Innovation waves
– Industrial / Technology Arms Race Cycles – 25 year cycles (four per Saeculum)
• American Civil War 1863
• Anglo-Chinese Opium War - 1888
• The Great War - 1914
• The Second World War – European Theatre 1939
– Geo-political Rivalry and Conflict – 20 year cycles (four per Saeculum)
– Olympics Years - even decades
• The Second World War – Pacific Theatre 1940
• Malayan Emergency - 1960
• Russian War in Afghanistan - 1980
• Balkan Conflict - 2000
• Culminating in a future Middle East Conflict before 2020 ?
– Geo-political Rivalry and Conflict – 20 year cycles (four per Saeculum)
– World Cup years - odd decades
• Korean War - 1950
• Vietnam War - 1970
• 1st Gulf War - 1990
• “Arab Spring” Uprisings - 2010
• Culminating in a future Trade War between USA and China before 2030 ?

1. Arthurian Generation (1433–1460) (H)
2. Humanist Generation (1461–1482) (A)
3. Reformation Generation (1483–1511) (P)
4. Reprisal Generation (1512–1540) (N)
5. Elizabethan Generation (1541–1565) (H)
6. Parliamentary Generation (1566–1587) (A)
7. Puritan Generation (1588–1617) (P)
8. Cavalier Generation (1618–1647) (N)
9. Glorious Generation (1648–1673) (H)
10. Enlightenment Generation (1674–1700) (A)
11. Awakening Generation (1701–1723) (P)
12. Liberty Generation (1724–1741) (N)
13. Republican Generation (1742–1766) (H)
14. Compromise Generation (1767–1791) (A)
15. Transcendental Generation (1792–1821) (P)
16. Gilded Generation (1822–1842) (N)
17. Progressive Generation (1843–1859) (A)
18. Missionary Generation (1860–1882) (P)
19. Lost Generation (1883–1900) (N)
20. G.I. Generation (1901–1924) (H)
21. Silent Generation (1925–1942) (A)
22. Baby Boom Generation (1943–1960) (P)
23. Generation X (Gen X) (1961–1981) (N)
24. Millennial Generation (Gen Y) (1982–2004) (H)
25. Homeland Generation (Gen Z) (2005-present) (A)
• Industrial / Technology Arms Races – 25 years
– American Civil War - 1863
– Anglo-Chinese Opium War - 1888
– The Great War - 1914
– The Second World War – 1939
• Geo-political Rivalry and Conflict – 20 years
(Olympic Games Years - even decades)
– The Second World War - 1940
– Malayan Emergency - 1960
– Russian War in Afghanistan - 1980
– Balkan Conflict – 2000
– Culminating in a future Middle East Conflict by
2020 ?
• Geo-political Rivalry and Conflict – 20 years
(Football World Cup years - odd decades)
– Korean War - 1950
– Vietnam War - 1970
– 1st Gulf War - 1990
– “Arab Spring” Uprisings – 2010
– Culminating in a future Trade War between USA
and China by 2030 ?
Generation and Century Waves – Human Conflict:- Technology and Innovation waves

Human Activity Cycles
LONG PERIOD HUMAN ACTIVITY WAVES
• Culture Moments – Major Human Activity achievements - Technology, Culture and History
• Industrial Cycles –phases of evolution for any given industry at a specific location / time
• Technology Shock Waves – Stone, Agriculture, Bronze, Iron, Steam, Information Ages etc.
– Stone – Tools for Hunting, Crafting Artefacts and Making Fire
– Fire – Combustion for Warmth, Cooking and changing the Environment
– Agriculture – Neolithic Age Human Settlements
– Bronze – Bronze Age Cities and Urbanisation
– Ship Building – Communication, Culture and Trade
– Iron – Iron Age Empires, Armies and Warfare
– Gun-powder – Global Imperialism and Colonisation
– Coal – Mining, Manufacturing and Mercantilism
– Engineering – Bridges, Boats and Buildings
– Steam Power – Industrialisation and Transport
– Chemistry – Dyestuff, Drugs, Explosives and Agrochemicals
– Internal Combustion – Fossil Fuel dependency
– Physics – Satellites and Space Technology
– Nuclear Fission – Globalisation and Urbanisation
– Digital Communications – The Information Age
– Smart Cities of the Future – The Solar Age – Renewable Energy and Sustainable Societies
– Nuclear Fusion– The Hydrogen Age - Inter-planetary Human Settlements
– Space-craft Building – The Exploration Age - Inter-stellar Cities and Galactic Urbanisation

• A saeculum is equivalent of the complete renewal of a human population - or a length
of time roughly equal to the potential lifetime of the longest-lived person in a generation.
The term was first used by the Etruscans. Originally it meant the period of time from the
moment that something happened (for example the founding of a city) until the point in
time that all people who had lived at the first moment or founding event of a saeculum -
had died. At this point a new saeculum would start – marked by a new founding event.
According to legend, the gods had allotted a certain number of saecula to every nation
or civilization; the Etruscans themselves, for example, had been given ten saecula.
• By the 2nd century BC, Roman historians were using the saeculum to measure out
historic periodicity in their chronicles - and to track wars. At the time of the reign of
emperor Augustus, the Romans decided that a saeculum was 110 years. In 17 BC
Caesar Augustus organised Ludi saeculares ('century-games') for the first time to
celebrate the 'fifth saeculum of Rome'. Later emperors like Claudius and Septimius
Severus have celebrated the passing of saecula with games at irregular intervals. In
248, Philip the Arab combined Ludi saeculares with the 1000th anniversary of
the founding of Rome 'ab urbe condita'. The new millennium that Rome entered was
called the Saeculum Novum, a term that had a metaphysical connotation in Christianity,
referring to the worldly age (hence the term secular)
Saeculum - Century Waves

Saeculum – Strauss & Howe
Generation Type Birth years Formative era
Late Medieval Saeculum
Arthurian Generation Hero (Civic) 1433-1460 (27) Unravelling: Retreat from France
Humanist Generation Artist (Adaptive) 1461–1482 (21) Crisis: War of the Roses
Reformation Saeculum (104)
Reformation Generation Prophet (Idealist) 1483–1511 (28) High: Tudor Renaissance
Reprisal Generation Nomad (Reactive) 1512–1540 (28) Awakening: Protestant Reformation
Elizabethan Generation Hero (Civic) 1541–1565 (24) Unraveling: Intolerance and Martyrdom
Parliamentary Generation Artist (Adaptive) 1566–1587 (21) Crisis: Armada Crisis
New World Saeculum (112)
Puritan Generation Prophet (Idealist) 1588–1617 (29) High: Merrie England
Cavalier Generation Nomad (Reactive) 1618–1647 (29) Awakening: Puritan Awakening
Glorious Generation Hero (Civic) 1648–1673 (25) Unraveling: Reaction and Restoration
Enlightenment Generation Artist (Adaptive) 1674–1700 (26) Crisis: King Philip's War, Glorious Revolution
Revolutionary Saeculum (90)
Awakening Generation Prophet (Idealist) 1701–1723 (22) High: Augustan Age of Empire
Liberty Generation Nomad (Reactive) 1724–1741 (17) Awakening: Great Awakening
Republican Generation Hero (Civic) 1742–1766 (24) Unraveling: French and Indian War
Compromise Generation Artist (Adaptive) 1767–1791 (24) Crisis: American Revolution
Civil War Saeculum (67)
Transcendental Generation Prophet (Idealist) 1792–1821 (29) High: Era of Good Feeling
Gilded Generation Nomad (Reactive) 1822–1842 (20) Awakening: Transcendental Awakening
Progressive Generation Hero (Civic) 1843–1859 (16) Unravelling: Slavery abolished - British Empire
Missionary Generation Artist (Adaptive) 1860–1882 (22) Crisis: American Civil War

Saeculum – Strauss & Howe
Generation Type Birth years Formative era
Great Power Saeculum (85)
Missionary Generation Prophet (Idealist) 1860–1882 (22) High: Reconstruction/Gilded Age
Lost Generation Nomad (Reactive) 1883–1900 (17) Awakening: Missionary Awakening
G.I. Generation Hero (Civic) 1901–1924 (23) Unravelling: World War I/Prohibition
Silent Generation Artist (Adaptive) 1925–1942 (17) Crisis: Great Depression/World War II
Millennial Saeculum (65+)
Baby Boom Generation Prophet (Idealist) 1943–1960 (17) High: Superpower America
Generation X1
"13th Generation"
Nomad (Reactive) 1961–1981 (20) Awakening: Consciousness Revolution
Millennial Generation2 Hero (Civic) 1982–2004 (22) Unravelling: Culture Wars, Postmodernism
Homeland Generation3,4 Artist (Adaptive) 2005–present
Crisis: Climate Change, War on Terror,
Global Financial Crisis
The current saeculum runs from the start of WWI in 1914 and so ends in 2015 – the same
time as the current 50-year Kondriatev Wave also ends. The new saeculum can mark the
beginning of a new period of unprecedented growth and prosperity – or global crisis. Strauss
and Howe have defined all of the saeculae over the past 600 years based on Anglo-American
history, from the start of the Protestant Reformation until the present day. In common usage,
a saeculum is not usually allocated to any fixed time period, but any duration from 80 up to
100 years. Saeculae may be divided into four "seasons" or generations of 15-30 years each;
Strauss and Howe represent these seasons as youth, rising adulthood, midlife, and old age.
The basis of the Strauss and Howe saeculum definition is, however, somewhat debatable.....

• In their book Generations, William Strauss and Neil Howe introduce a fascinating theory
that interprets the whole of Western history in terms of a repeating series of four basic
types of generations. Innovation Generations create technology, which drives economies,
and the wealth created in turn influences the social and political ambitions of their peers. In
their follow-up work, The Fourth Turning, Strauss and Neil Howe propose that history
moves in long cycles or waves, each of four or five generations duration, which they call
the saeculum, after the ancient Etruscan cycle of a similar length. The saeculum contains
four or five periods, called turnings, or a sequence of generations - each associated with
a unique set of Technology Shock Waves - a clustered series of technology Innovations
that are discovered, developed, exploited, plateau and are then replaced and phased out.
• The Lost generation, born at the end of the nineteenth century, and Generation X have
similar peer personalities, making them the same generation type. The Lost generation
were the conservative elders of the Edwardian Period, who tended to be conservative not
because they were old - but because they had been born into a more conservative society.
Similarly, today's elder generation are more liberal because they were born (baby boom)
and grew up (1960s) in a more liberal post-war society. Strauss and Howe might argue
that the move towards the political right over the last couple of decades, and the liberal era
before that - simply reflect the impact of different combinations of generations in the adult
stages of life occupying the Power-bases in Political, Economic and Social Structures.

• Table 2 illustrates this by comparing Strauss and Howe Social Moment turnings (the period
of generational length that encompass Social Moments) with McLoughlin's awakenings.
Strauss and Howes’ Awakening turnings are located 16-27 years from the nearest secular
crisis with an average spacing of 23 years, close to their standard 22 year generation.
• In contrast, McLoughlin's dates are located 6-35 years from the nearest secular crisis and
can hardly be said to be spaced a generation apart from crisis eras. That is, a saeculum
which is defined by McLoughlin Awakenings isn't very regular - suggesting either that such a
regular century cycle may not exist - or at least cannot easily be revealed by a simplistic
survey of a timeline of major historical events.....
Saeculum Spiritual Awakenings
Secular Crises*
Strauss and Howe* McLoughlin6
1515 - 1614 1621-1649 1610-1640 1569-1594
1615 - 1714 1727-1746 1730-1760 1675-1704
1715 - 1814 1822-1844 1800-1830 1773-1794
1815 - 1914 1886-1908 1890-1920 1860-1865
1915 - 2014 1964-1984 1960-0000 1929-1946

Social Generations
• Strauss and Howe define a social generation as the aggregate of all people born
over a span of roughly twenty years or about the length of one phase of life:
childhood, young adulthood, midlife, and old age. Generations are identified
(from first year-of-birth to last) by looking for cohort groups of this length that
share three criteria. First, members of a generation share what the authors call
an age location in history: they encounter key historical events and social trends
while occupying the same phase of life. In this view, members of a generation
are shaped in lasting ways by the eras they encounter as children and young
adults and they share certain common beliefs and behaviours. Aware of the
experiences and traits that they share with their peers, members of a generation
would also share a sense of common perceived membership in that generation.
• Strauss and Howe say they based their definition of a generation on the work of
various writers and social thinkers, from ancient writers such as Polybius and Ibn
Khaldun to modern social theorists like José Ortega y Gasset, Karl Mannheim,
John Stuart Mill, Émile Littré, Auguste Comte, and François Mentré.[19]

Saeculum Spiritual Awakenings
Secular Crises*
Strauss and Howe* McLoughlin6
1515 - 1614 1621-1649 1610-1640 1569-1594
1615 - 1714 1727-1746 1730-1760 1675-1704
1715 - 1814 1822-1844 1800-1830 1773-1794
1815 - 1914 1886-1908 1890-1920 1860-1865
1915 - 2014 1964-1984 1960-0000 1929-1946
Saeculum Strauss-Howe
Cycle
Spiritual Awakening Secular Crisis
1415 - 1514 Pre-Columbian Renaissance (1517-1539) Wars of the Roses (1455-1487)
1515 - 1614 Columbian Reformation (1517-1539) Spanish Armada (1580-1588)
1615 - 1714 Colonial Puritan Awakening (1621-1640) Glorious Revolution (1675-1692)
1715 - 1814 Revolutionary Great Awakening (1734-1743) American Revolution (1773-1789)
1815 - 1914 Victorian Transcendental Awakening (1822-1837) American Civil War (1857-1865)
1915 - 2014 Great Power Missionary Awakening (1886-1903) WWI, Depression & WWII (1932-1945)
Cold War Baby Boom Awakening (1967-1980) Regional War, Terrorism and Insecurity
Millennial Post-Cold War Awakening (2000-2014) Regional War, Terrorism and Insecurity

Generational Archetypes and Turnings
Turnings
• While writing Generations, Strauss and Howe discovered a pattern in the historical generations they examined which
revolved around generational events which they call turnings. In Generations, and in greater detail in The Fourth Turning,
they identify the four-stage cycle of social or mood eras (i.e. turnings).
High
• According to Strauss and Howe, the First Turning is a High. This is a post-Crisis era when institutions are strong and
individualism is weak. Society is confident about where it wants to go collectively, though those outside the majoritarian
centre often feel stifled by the conformity.[20]
• According to the authors, America’s most recent First Turning was the post-World War II American High, beginning in
1946 and ending with the assassination of President John F. Kennedy on November 22, 1963. The Silent Generation
(Artist archetype, born 1925 to 1942) came of age during this era. Known for their caution, conformity, and institutional
trust, Silent young adults epitomized the mood of the High. Most married early, sought stable corporate jobs, and moved
into new suburbs.[21]
Awakening
• According to the theory, the Second Turning is an Awakening. This is an era when institutions are attacked in the name
of personal and spiritual autonomy. Just when society is reaching its high tide of public progress, people suddenly tire of
social discipline and want to recapture a sense of personal authenticity. Young activists look back at the previous High as
an era of cultural and spiritual poverty.[22]
• America’s most recent Awakening was the “Consciousness Revolution,” which spanned from the campus and inner-city
revolts of the mid-1960s to the reelection of Ronald Reagan. The Boom Generation (Prophet archetype, born 1943 to
1960) came of age during this era. Their idealism and search for authentic self-expression epitomized the mood of the
Awakening.[23]

Generational Archetypes and Turnings
Unraveling
• According to Strauss and Howe, the Third Turning is an Unraveling. The mood of this era is in many ways the
opposite of a High: Institutions are weak and distrusted, while individualism is strong and flourishing. Highs come after
Crises, when society wants to coalesce and build. Unravelings come after Awakenings, when society wants to atomize
and enjoy.
• America’s most recent Unraveling was the Long Boom and Culture War, beginning in the mid-1980s and ending in the
late 2000s. The era began during the second term of (Reagan’s “Morning in America”), which eventually developed
into a "debased" popular culture, a pervasive distrust of institutions and leaders, and the splitting of national consensus
into competing “values” camps. Generation X (Nomad archetype, born 1961–1981) came of age during this era.
Crisis
• According to the authors, the Fourth Turning is a Crisis. This is an era in which institutional life is destroyed and rebuilt
in response to a perceived threat to the nation’s survival. Civic authority revives, cultural expression redirects towards
community purpose, and people begin to locate themselves as members of a larger group. Fourth Turnings have all
been new “founding moments” in America’s history, moments that redefined the national identity.[25] America’s most
recent Fourth Turning began with the stock market crash of 1929 and climaxed with the end of World War II. The G.I.
Generation (a Hero archetype, born 1901 to 1924) came of age during this era. Their confidence, optimism, and
collective outlook epitomized the mood of the era.[26] Today’s youth, the Millennial Generation (Hero archetype, born
1982 to 2004), show many traits similar to those of the G.I. youth, including rising civic engagement, improving
behavior, and collective confidence.[27]

• The situation for spiritual awakenings is even more problematic. The spiritual awakenings in
Table 1 roughly correspond to periods of religious fervour identified by historian William
McLoughlin in his book Revivals, Awakenings and Reform..
• McLoughlin defines awakenings as periods of cultural revision caused by a crisis in value
and belief systems - producing a reorientation in those values and beliefs. McLoughlin
identifies awakenings in 1610-40, 1730-60, 1800-30, and 1890-1920.6 Comparison of these
dates with those for spiritual awakenings in Table 1 shows a rough correspondence. The
spiritual awakenings are subsets of the McLoughlin Cycles and tend to be located midway
between secular crises so that a regular pattern of alternating social moments is evident.
Saeculum McLaughlin Cycle Spiritual Awakening Secular Crisis
1415 - 1514 Pre-Columbian Renaissance (1517-1539) Wars of the Roses (1455-1487)
1515 - 1614 Columbian The Reformation (1517-1539) Spanish Armada (1569-1594)
1615 - 1714 Colonial Early Enlightenment (1610-1640) English Civil War (1675-1704)
1715 - 1814 Revolutionary Late Enlightenment (1730-1760) American Revolution (1773-1794)
1815 - 1914 Victorian Transcendental (1800-1830) Napoleonic Wars (1860-1865)
1915 - 2014 Loss of Empires Missionary Awakening (1890-1920) WWI, Depression & WWII (1929-1946)
Cold War Baby Boom Awakening (1960-1980) Regional Wars, Terrorism, Insecurity
Millennial 21st century Awakening (2000 - 2014) Regional Wars, Terrorism, Insecurity

Saeculum - Century Waves – Human Conflict, Technology Arms Race & Innovation cycles: -
• Industrial / Technology Arms Race Saeculum – 100 years / generation intervals @ 25 years
– American Civil War - 1863
– Anglo-Chinese Opium War - 1888
– The Great War - 1914
– The Second World War – European Theatre 1939
• Cold War Geo-political Rivalry and Conflict – @ 20 years (Olympic Games - even decades)
– The Second World War – Pacific Theatre 1940
– Malayan Emergency - 1960
– Russian War in Afghanistan - 1980
– Balkan Conflict – 2000
– Culminating in a future Middle East Conflict by 2020 ?
• Cold War Geo-political Rivalry and Conflict – @ 20 years (Soccer World Cup - odd decades)
– Korean War - 1950
– Vietnam War - 1970
– 1st Gulf War - 1990
– “Arab Spring” Uprisings – 2010
– Culminating in a future Trade War between USA and China by 2030 ?

Generation Wave Archetypes
Prophet
• Abraham Lincoln, born in 1809. Strauss and Howe would identify him as a member of the Transcendental generation.
• Prophet generations are born near the end of a Crisis, during a time of rejuvenated community life and consensus
around a new societal order. Prophets grow up as the increasingly indulged children of this post-Crisis era, come of
age as self-absorbed young crusaders of an Awakening, focus on morals and principles in midlife, and emerge as
elders guiding another Crisis.[44]
• Due to their location in history, such generations tend to be remembered for their coming-of-age fervor and their
values-oriented elder leadership. Their main societal contributions are in the area of vision, values, and religion. Their
best-known historical leaders includeJohn Winthrop, William Berkeley, Samuel Adams, Benjamin Franklin, James
Polk, Abraham Lincoln, Herbert Hoover, and Franklin Roosevelt. These people were principled moralists who waged
idealistic wars and incited others to sacrifice. Few of them fought themselves in decisive wars, and they are
remembered more for their inspiring words than for great actions. (Example among today’s living generations: Baby
Boomers.)
Nomad
• Nomad generations are born during an Awakening, a time of social ideals and spiritual agendas, when young adults
are passionately attacking the established institutional order. Nomads grow up as under-protected children during this
Awakening, come of age asalienated, post-Awakening adults, become pragmatic midlife leaders during a Crisis, and
age into resilient post-Crisis elders.[44]
• Due to their location in history, such generations tend to be remembered for their adrift, alienated rising-adult years
and their midlife years of pragmatic leadership. Their main societal contributions are in the area of liberty,
survival and honor. Their best-known historical leaders include Nathaniel Bacon, William Stoughton, George
Washington, John Adams, Ulysses Grant, Grover Cleveland, Harry Truman, and Dwight Eisenhower. These were
shrewd realists who preferred individualistic, pragmatic solutions to problems. (Example among today’s living
generations: Generation X.[45])

Generation Wave Archetypes
Hero
• Young adults fighting in World War II were born in the early part of the 20th century, like PT109 commander LTJG John F.
Kennedy (b. 1917). They are part of the G.I. Generation, which follows the Hero archetype.
• Hero generations are born after an Awakening, during an Unravelling, a time of individual pragmatism, self-reliance, and
laissez faire. Heroes grow up as increasingly protected post-Awakening children, come of age as team-oriented young
optimists during a Crisis, emerge as energetic, overly-confident midlifers, and age into politically powerful elders attacked
by another Awakening.
• Due to their location in history, such generations tend to be remembered for their collective military triumphs in young
adulthood and their political achievements as elders. Their main societal contributions are in the area of community,
affluence, and technology. Their best-known historical leaders include Cotton Mather, Thomas Jefferson, James
Madison, John F. Kennedy and Ronald Reagan. These have been vigorous and rational institution builders. In midlife, all
have been aggressive advocates of economic prosperity and public optimism, and all have maintained a reputation for
civic energy and competence in old age. (Examples among today’s living generations: G.I. Generation and Millennials.)
Artist
• Artist generations are born after an Unraveling, during a Crisis, a time when great dangers cut down social and political
complexity in favour of public consensus, aggressive institutions, and an ethic of personal sacrifice. Artists grow up over-
protected by adults preoccupied with the Crisis, come of age as the socialized and conformist young adults of a post-
Crisis world, break out as process-oriented midlife leaders during an Awakening, and age into thoughtful post-Awakening
elders.
• Due to their location in history, such generations tend to be remembered for their quiet years of rising adulthood and their
midlife years of flexible, consensus-building leadership. Their main societal contributions are in the area of expertise and
due process. Their best-known historical leaders include William Shirley, Cadwallader Colden, John Quincy Adams,
Andrew Jackson, and Theodore Roosevelt. They have been complex social technicians and advocates for fairness and
inclusion. (Example among today’s living generations: Silent.)

Saeculum McLaughlin
Cycle
Secular Crisis
Strauss-Howe
Generation
Generation
Date / Type
1415 - 1514 Pre-Columbian Renaissance
(1517-1539)
Retreat from France
Arthurian Generation 1433–1460) (H)
Wars of the Roses
(1455-1487)
War of the Roses
Humanist Generation 1461–1482) (A)
High: Tudor Renaissance Reformation Generation 1483–1511) (P)
1515 - 1614 Columbian Reformation
(1517-1539)
Protestant Reformation
Reprisal Generation 1512–1540) (N)
Spanish Armada
(1580-1588)
Intolerance and Martyrdom
Elizabethan Generation 1541–1565) (H)
Crisis: Armada Crisis Parliamentary Generation 1566–1587) (A)
High: Merrie England Puritan Generation 1588–1617) (P)
1615 - 1714 Colonial Early Enlightenment
(1610-1640)
English Civil War
(1675-1704)
Cavalier Generation 1618–1647) (N)
Reaction and Restoration Glorious Generation 1648–1673) (H)
Crisis: King Philip's War,
Glorious Revolution
Enlightenment Generation 1674–1700) (A)
1715 - 1814 Revolutionary Late Enlightenment
(1730-1760)
American Revolution
(1773-1794)
Awakening Generation 1701–1723) (P)
Great Awakening Liberty Generation 1724–1741) (N)
French and Indian War Republican Generation 1742–1766) (H)
Crisis: American Revolution Compromise Generation 1767–1791) (A)

Saeculum McLaughlin
Cycle
Spiritual Age Secular Crisis Strauss-Howe
Generation
Generation
Date / Type
Victorian Age -
(1815 – 1914)
Imperialism and
National Rivalry
Transcendental
(1800-1830)
High: Era of Good Feeling
Transcendental Generation 1792–1821) (P)
Industry/Technology
Arms Races
Transcendental Awakening
Gilded Generation 1822–1842) (N)
Unravelling: Slavery
abolished in British Empire
Progressive Generation 1843–1859) (A)
Napoleonic Wars
(1860-1865)
Missionary Generation 1860–1882) (P)
Anglo-Chinese Opium
War - 1888
Lost Generation 1883–1900) (N)
Globalisation –
(1915 – 2014)
World Wars and
Loss of Empires
Missionary Awakening
(1890-1920)
The Great War –
(1914-1918)
G.I. Generation 1901–1924) (H)
WWI, Depression &
WWII (1929-1946)
The Second World War –
(1939-1945)
Silent Generation 1925–1942) (A)
Cold War Korean War - 1950 Baby Boom Generation 1943–1960) (P)
Regional Wars,
Terrorism, Insecurity
Baby Boom Awakening
(1960-1980)
Vietnam War - 1970
Russian War in
Afghanistan - 1980
Generation X (Generation X) 1961–1981) (N)
Millennial Conflicts 21st century Awakening
(2000 - 2020)
1st Gulf War –1990
Balkan Conflict – 2000
Millennial Generation (Gen Y) 1982–2004) (H)
Post-Millennial
Conflicts
“Arab Spring” Uprisings –
2010
Homeland Generation (Gen Z) 2005–2025 (A)

Saeculum McLaughlin
Cycle
Secular Crisis
Strauss-Howe
Generation
Generation
Date / Type
2015-2114 Post-Millennial 21st century Apocalypse
(2020 - 2040)
Global Food, Energy and
Water (FEW) Crisis
Apocalyptic Generation (Gen A) 2025–2050 (P)
Post-Apocalyptic
Realisation (2040 - 2060)
Post-Apocalyptic Generation
(Gen B)
2050–2070 (N)
Post-Apocalyptic Recovery
(2040 - 2060)
Recovery Generation (Gen C) 2070–2090) (H)
The current saeculum starts at the beginning of WWI in 1914, and so ends 100 years later in
2015 – which is the same time as the current 50-year Kondriatev Infrastructure Investment Wave
also ends. A new saeculum can mark the beginning of a either a period of unprecedented growth
and prosperity – or of global crisis. From 2015, a number of Economic Cycles rise together.
Strauss and Howe have based their definition of all of the saecula during the past 600 years on
Anglo-American history - from the start of the Protestant Reformation until the present day. In
common usage, the term saeculum is not usually allocated to any fixed period of time, but may
be of any duration from 80 up to 100 years. Saecula may be divided into four generations or
"seasons" varying between15-30 years each; Strauss and Howe represent these seasons as
youth, rising adulthood, midlife, and old age. This basis for Strauss and Howe generations and
saecula definition is somewhat arbitrary and debatable. McLaughlin, however, makes a much
better fist of his definition of generations and saecula.

• One example of the effect of succession changing generational membership is the
decline in community spirit across American society over the post-war decades. In
his intriguing book Bowling Alone, Robert Putnam proposes that the succession
of a civic-minded pre-war generation and gradual replacement with the markedly
more individualistic, self-confident and self-centric baby boomers is responsible for
about half of this decline. In a particularly striking figure, Putnam documents
downward trends in eight measures of Civic Engagement by year-of-birth.
• For seven of the eight measures, this decline either begins or accelerates in the
late 1920's to early 1930's period. People born after the early 1930's are less
active in their community than those born before, and this trend towards less
engagement accelerates with more recent birth years. Strauss and Howe would
explain the trends that Putnam describes as being the result of the succession of
generations having peer personalities characterized by decreasing levels of civic-
responsibility and public-orientation. Their GI generation (b 1901-24) has a peer
personality of a particularly civic-minded type - in stark contrast to the GI's are the
Baby Boomers Generation X and Generation Z – all of which have highly-focused
and individualistic peer personalities, as evidenced by the growth in Social Media.

• The peer personality of a particular generation is shaped by the generation's historical
location relative to a social moment. A social moment is an era, typically lasting about a
decade, when people perceive that historical events are radically altering their social
environment. Thus, a generation's peer personality (what makes it a particular kind of
generation) depends on when they were born relative to particularly eventful periods in
history. There are two types of social moments: secular crises, when society focuses on
reordering the outer world of institutions and public behaviour; and spiritual awakenings,
when society focuses on changing the inner world of values and private behaviour.
• What constitutes the saeculum is not the regularly repeating series of social moments –
but technology innovation. If succession moments occurred sporadically, a regular series
of generations would not be created and there would be no saeculum. Strauss and Howe
list six spiritual awakenings and five secular crises (Table 1) spaced 88 years apart on
average as their primary evidence for the existence of regularly spaced social moments.
• They propose generations reflect the experience of living through a social moment which
is triggered at a particular phase of life by economic wealth from innovation. The phases of
life are youth (age 0-21), rising adulthood (age 22-43), maturity (age 44-65) and elderhood
(age 66-87). They are 22 years in length and four of them comprise an 88-year saeculum,
which neatly dovetails with the average spacing of social moments of the same type.

Robert
Putnam
• The effect of
succession-
changing
generational
membership on
trends in Social
Connectivity
• Have Smart
Apps and
Social Media
replaced Face-
2-face human
contact and
attending group
social events in
creating and
maintaining
Social
Networks ?

BIBLOGRAPHY
Bohm-Bawerk, Eugen. 1891. The Positive Theory of Capital. London: Macmillan and Co.
Garrison, Roger. 2001. Time and Money: the Macroeconomics of Capital Structure. New York: Routledge.
Garrison, Roger. 2007. “Capital-Based Macroeconomics,” on-line slide show,
http://www.slideshare.net/fredypariapaza/capitalbased-macroeconomics, accessed 10/6/07.
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Hoppe, Hans-Hermann. 1993. The Economics and Ethics of Private Property. Boston: Kluwer Academic.
Keynes, John M. 1931. “The Pure Theory of Money. A Reply to Dr. Hayek.” Economica (11) 34, 387-397.
Kurz, Heinz D. 1990. Capital, Distribution and Effective Demand: Studies in the “Classical Approach” to Economic
Theory. Cambridge, UK: Polity Press.
Kurz, Heinz and Salvadori, Neri. 1992. Theory of Production I. Milan: Instituto di ricera sulla Dinamica dei Sistemi
Economoci (IDSE).
Menger, Carl. [1871] 1950. Principles of Economics. Glencoe, IL: Free Press.
Mises, Ludwig. [1932] 1990. “The Non-Neutrality of Money”, in Money, Method and the Market Process, Richard M.
Ebeling, ed., from lecture given to New York City Economics Club. Norwell, MA: Kluwer Academic Publishers.
Mulligan, Robert F. 2006. “An Empirical Examination of Austrian Business Cycle Theory.” Quarterly Journal of Austrian
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Schumpeter, Joseph R. 1950. Capitalism, Socialism and Democracy. New York: Harper & Row.

Econometrics
How should the progress and
development of a Sovereign Nation States
be measured and compared ?

Econometrics
• Econometrics is the application of statistical and mathematical techniques to
competing economic theories for the purpose of forecasting future trends and
risks. This takes economic models and time-series data sets through
statistical trials in order to test, verify and validate alternative hypotheses.
Collaboration between academia, government and the financial services
industry is improving the understanding of economic theory and econometric
modelling and advancing the homogeneity and integration of competing
economic theories and models, especially wherever suitable time-series data
sets exist to support model evaluation and benchmarking.
Competing theories and conflicting models underling fiscal policy analysis and
market risk evaluation are now being given a more sympathetic treatment and
satisfactory integration. Even now, attempts are being made to resolve those
factors of heterogeneity and conflict in economic modelling – an essential
condition for the development of a “standard economic theory” integrating
macro- and micro-economic views within a universally valid “standard
economic risk framework”.

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