Social generations are a powerful force in history. This is the basis of research done by William Strauss and Neil Howe who have identified a recurring generational cycle in American history.
Why does it interest me? How often do we hear, “something has to give …”, “the world has gone crazy …” “we can’t sustain this …”. My job is to try and understand what drives economies, markets and people and use that information to formulate a solid investment thesis.
There are few definitions that I need to cover first:
A generation: the aggregate of all people born over a span of roughly twenty years.
Phase of Life: childhood, young adulthood, midlife and old age. *Rather than thinking of people “belonging” to an age bracket, the authors believe generations pass through age brackets.
Archetype: similar collective personas of generations; Prophet, Nomad, Hero and Artist.
Saeculum: The Romans defined a saeculum as a long human life, or a natural century. The full cycle is probably between 80 and 90 years.
Turning: There are four turnings in a saeculum. Each turning is approximately 20 years – roughly the span of a generation. The turnings are described as a High, Awakening, Unravelling and Crisis.
The theory is that society has traversed a four stage cycle over many decades. At the start of each era, people change how they feel about themselves, about culture, the nation and the future and this determines how they face problems and obstacles.
What drives the cycles of spiritual and cultural upheaval? Generations. The national character reflects a composite of generational personas from all phases of life from youth to old age. Every two decades or so, the current older leaders pass on, and each generation moves up from old age, midlife, young adulthood, and a new generation of babies is born. As each generation moves into the next phase of life, their distinct generational attitudes and behaviours transform and provoke powerful new currents in the public mood. Strauss and Howe talk of four generational archetypes, which they called Prophet, Nomad, Hero and Artist. The generations in each architype have similar age locations in history and therefore share some basic attitudes towards family, risk, culture and values. As each architype ages their personas and characteristics change, but each one has an underlying identity that endures over the centuries.
The Archetypes
Prophet generations are born after a crisis, during a time of rejuvenated community life and consensus around societal order. Prophets grow up as increasingly indulged children of this post-crisis era, come of age as narcissistic young crusaders of a spiritual awakening, cultivate principle as moralistic mid-lifers, and come of age as wise elders guiding another crisis. In today’s living generations these are the Boomers.
The Nomad generation is born during a spiritual awakening, a time of social ideals and spiritual agendas, when youth-fired attacks break out against the established institutional order. Nomads grow up as the unprotected children during this awakening and come of age as alienated young adults in a post awakening world. They mellow into pragmatic mid-life leaders during a historical crisis and age into tough post-crisis elders. In today’s living generations these are the Generation X’s.
Hero generations are born after a spiritual awakening, during a time of individual pragmatism, self-reliance, laissez faire and national chauvinism. Heroes grow up as increasingly protected post-awakening children, come of age as the heroic young team workers of a historical crisis, demonstrate hubris as energetic mid-lifers, and emerge as powerful elders attached by another awakening. In today’s living generations these are the GI’s and the Millennials.
Artist generations are born during a great war or other historical crisis. Worldly perils boil off the complexity of life and public consensus, and personal sacrifice prevails. Artists grow up overprotected by adults preoccupied with the crisis, come of age as the sensitive young adults of a post crisis world and break free as indecisive midlife leaders during a spiritual awakening and age into empathetic post awakening elders. In today’s living generations these are the Silent generation and the Homelanders.
Archetypes are an important part of predictive power of the Strauss-Howe generational theory. By looking at previous generations of the same archetypes evolved, it is possible to make nonlinear forecasts of generations are likely to think and feel as they grow older. Many forecasters assume that the current attitudes and behaviours of any given age bracket will either remain the same or intensify their current direction indefinitely. However, every twenty years or so, a new generation ages into that bracket and dramatically changes the trend!
The Turnings
The First Turning is a High. Old Prophets die, nomads enter elder-hood, Heroes enter midlife and artists enter young adulthood. A new generation of Prophets are born. This is an era when institutions are strong and individualism is weak. Society is confident about where it wants to go collectively even if those outside the majoritarian centre feel stifled by the conformity.
America’s most recent first turning was the post-World War II ‘American High’ (where we witnessed America’s ascendency as a superpower) beginning in 1946 and ending with the assassination of John F Kennedy in 1963. Coming of age in this High was the Artist archetype Silent Generation, born 1925 – 1942). They were known for their caution, conformity and institutional trust. Most married early, sought stable corporate jobs and slipped quietly into America’s gleaming new suburbs.
The Second Turning is an Awakening. Old Nomads die, Heroes enter adulthood, Artists enter midlife, Prophets enter young adulthood and a new generation of child Nomads are born. This is an era when institutions are attacked in the name of personal and spiritual autonomy. Think about the Vietnam War and the rebellious counterculture that arose (feminism, environmental, black power). This turning peaked in 1974 with Watergate and ended with Reagan’s election campaign in 1984, as hippies grew up and started families. This was a time that the Boomers were entering young adulthood.
The Third Turning is an Unravelling. Old Heroes die, Artists enter adulthood, Prophets enter midlife and Nomads enter young adulthood. New Heroes are born. The last third turning was the “long Boom & Culture Wars”. Reagan brought “Morning in America” individualism, and through this era we experience stock market booms, celebrity scandals, a “war on terror” and ended the turning with the Great Financial Crisis! People felt optimistic about their personal lives, but pessimistic about nationalism. Inequality was on the rise, and with it came a rise in violence and incivility. The Gen X’s were entering young adulthood.
The Fourth Turning is a Crisis. Old Artists die, Prophets enter adulthood, Nomads enter mid-life and hero’s enter adulthood. New Artists are born. Our fourth turning probably started with the Global Financial Crisis. The Boomers are entering elderhood, and the Gen X’s are entering midlife. The Millennials are entering young adulthood and the Homelanders (born from 2005 onwards) are entering childhood. Public Trust continues to ebb and there is a degeneration of civic purpose. It is difficult to contemplate what crisis will end the Fourth Turning, but it will probably happen during this decade. Looking back at some of the main events of the past, these could include war, depression and revolutions. The last Fourth Turning started with Black Monday in 1929 – the start of the Great Depression and ended with the start of World War II.
There are many threats that could feed a sense of public urgency as the Fourth Turning progresses – environment crises, energy shortage, weapons proliferation, financial collapse. The interesting study is how different generations respond to these crises – it is the response not the initial event that defines the era. Will the Nomad leaders be able to navigate their way through whatever turmoil presents itself?
Please let me know if this interests you – I would be happy to delve into more of the personality traits of the different Archetypes and generations. I could go on and on, but Andrew says this piece is too long as it is!!
The fourth turning
Social generations are a powerful force in history. This is the basis of research done by William Strauss and Neil Howe who have identified a recurring generational cycle in American history.
Why does it interest me? How often do we hear, “something has to give …”, “the world has gone crazy …” “we can’t sustain this …”. My job is to try and understand what drives economies, markets and people and use that information to formulate a solid investment thesis.
There are few definitions that I need to cover first:
A generation: the aggregate of all people born over a span of roughly twenty years.
Phase of Life: childhood, young adulthood, midlife and old age. *Rather than thinking of people “belonging” to an age bracket, the authors believe generations pass through age brackets.
Archetype: similar collective personas of generations; Prophet, Nomad, Hero and Artist.
Saeculum: The Romans defined a saeculum as a long human life, or a natural century. The full cycle is probably between 80 and 90 years.
Turning: There are four turnings in a saeculum. Each turning is approximately 20 years – roughly the span of a generation. The turnings are described as a High, Awakening, Unravelling and Crisis.
The theory is that society has traversed a four stage cycle over many decades. At the start of each era, people change how they feel about themselves, about culture, the nation and the future and this determines how they face problems and obstacles.
What drives the cycles of spiritual and cultural upheaval? Generations. The national character reflects a composite of generational personas from all phases of life from youth to old age. Every two decades or so, the current older leaders pass on, and each generation moves up from old age, midlife, young adulthood, and a new generation of babies is born. As each generation moves into the next phase of life, their distinct generational attitudes and behaviours transform and provoke powerful new currents in the public mood. Strauss and Howe talk of four generational archetypes, which they called Prophet, Nomad, Hero and Artist. The generations in each architype have similar age locations in history and therefore share some basic attitudes towards family, risk, culture and values. As each architype ages their personas and characteristics change, but each one has an underlying identity that endures over the centuries.
The Archetypes
Prophet generations are born after a crisis, during a time of rejuvenated community life and consensus around societal order. Prophets grow up as increasingly indulged children of this post-crisis era, come of age as narcissistic young crusaders of a spiritual awakening, cultivate principle as moralistic mid-lifers, and come of age as wise elders guiding another crisis. In today’s living generations these are the Boomers.
The Nomad generation is born during a spiritual awakening, a time of social ideals and spiritual agendas, when youth-fired attacks break out against the established institutional order. Nomads grow up as the unprotected children during this awakening and come of age as alienated young adults in a post awakening world. They mellow into pragmatic mid-life leaders during a historical crisis and age into tough post-crisis elders. In today’s living generations these are the Generation X’s.
Hero generations are born after a spiritual awakening, during a time of individual pragmatism, self-reliance, laissez faire and national chauvinism. Heroes grow up as increasingly protected post-awakening children, come of age as the heroic young team workers of a historical crisis, demonstrate hubris as energetic mid-lifers, and emerge as powerful elders attached by another awakening. In today’s living generations these are the GI’s and the Millennials.
Artist generations are born during a great war or other historical crisis. Worldly perils boil off the complexity of life and public consensus, and personal sacrifice prevails. Artists grow up overprotected by adults preoccupied with the crisis, come of age as the sensitive young adults of a post crisis world and break free as indecisive midlife leaders during a spiritual awakening and age into empathetic post awakening elders. In today’s living generations these are the Silent generation and the Homelanders.
Archetypes are an important part of predictive power of the Strauss-Howe generational theory. By looking at previous generations of the same archetypes evolved, it is possible to make nonlinear forecasts of generations are likely to think and feel as they grow older. Many forecasters assume that the current attitudes and behaviours of any given age bracket will either remain the same or intensify their current direction indefinitely. However, every twenty years or so, a new generation ages into that bracket and dramatically changes the trend!
The Turnings
The First Turning is a High. Old Prophets die, nomads enter elder-hood, Heroes enter midlife and artists enter young adulthood. A new generation of Prophets are born. This is an era when institutions are strong and individualism is weak. Society is confident about where it wants to go collectively even if those outside the majoritarian centre feel stifled by the conformity.
America’s most recent first turning was the post-World War II ‘American High’ (where we witnessed America’s ascendency as a superpower) beginning in 1946 and ending with the assassination of John F Kennedy in 1963. Coming of age in this High was the Artist archetype Silent Generation, born 1925 – 1942). They were known for their caution, conformity and institutional trust. Most married early, sought stable corporate jobs and slipped quietly into America’s gleaming new suburbs.
The Second Turning is an Awakening. Old Nomads die, Heroes enter adulthood, Artists enter midlife, Prophets enter young adulthood and a new generation of child Nomads are born. This is an era when institutions are attacked in the name of personal and spiritual autonomy. Think about the Vietnam War and the rebellious counterculture that arose (feminism, environmental, black power). This turning peaked in 1974 with Watergate and ended with Reagan’s election campaign in 1984, as hippies grew up and started families. This was a time that the Boomers were entering young adulthood.
The Third Turning is an Unravelling. Old Heroes die, Artists enter adulthood, Prophets enter midlife and Nomads enter young adulthood. New Heroes are born. The last third turning was the “long Boom & Culture Wars”. Reagan brought “Morning in America” individualism, and through this era we experience stock market booms, celebrity scandals, a “war on terror” and ended the turning with the Great Financial Crisis! People felt optimistic about their personal lives, but pessimistic about nationalism. Inequality was on the rise, and with it came a rise in violence and incivility. The Gen X’s were entering young adulthood.
The Fourth Turning is a Crisis. Old Artists die, Prophets enter adulthood, Nomads enter mid-life and hero’s enter adulthood. New Artists are born. Our fourth turning probably started with the Global Financial Crisis. The Boomers are entering elderhood, and the Gen X’s are entering midlife. The Millennials are entering young adulthood and the Homelanders (born from 2005 onwards) are entering childhood. Public Trust continues to ebb and there is a degeneration of civic purpose. It is difficult to contemplate what crisis will end the Fourth Turning, but it will probably happen during this decade. Looking back at some of the main events of the past, these could include war, depression and revolutions. The last Fourth Turning started with Black Monday in 1929 – the start of the Great Depression and ended with the start of World War II.
There are many threats that could feed a sense of public urgency as the Fourth Turning progresses – environment crises, energy shortage, weapons proliferation, financial collapse. The interesting study is how different generations respond to these crises – it is the response not the initial event that defines the era. Will the Nomad leaders be able to navigate their way through whatever turmoil presents itself?
Please let me know if this interests you – I would be happy to delve into more of the personality traits of the different Archetypes and generations. I could go on and on, but Andrew says this piece is too long as it is!!
Asset Class Returns
The table below represents a rolling year view of the major asset class returns that we track. It offers a view of the asset classes we use to diversify your portfolio.