Keeping it Simple | Ep.38: Are We Fourth Turning Japanese? Or Is It Different this Time?
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Neil Howe joins Mike and Harley for a discussion of cycles and saeculi.
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Neil Howe argues that America is currently in a Fourth Turning (crisis era) that began around 2007-2008 and will climax around 2032, characterized by increasing tribalism and institutional restructuring, after which a First Turning of community, equality, and long-term focus will emerge—a cycle driven by generational archetypes shaped by historical experiences.
- Generational cycles are driven by how cohorts are shaped young by history and then shape history 40 years later, creating a closed system of four distinct generations and moods
- Fourth Turnings climax in organized conflict (internal or external) that forces institutional creative destruction and community mobilization, after which societies rejuvenate institutions and defy entropy
- The current cycle will involve inflation as a burden-sharing mechanism and financial repression to devalue prior claims and rebuild institutions, particularly infrastructure and community-oriented systems
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In 1939 most Americans believed the coming war would be between fascism and communism, not between liberal democracy and fascism, because no one believed liberal democracy had a future; the 1930s polarization led to dictatorships in Europe while America avoided dictatorship partly through FDR's transformative New Deal policies.
“if you had gone out on the street and uh and and and done a poll of Americans in uh say 1939, you'd say, 'Look, uh there's going to be a huge conflict in a few years from now, let's say three. Um what's it going to be about?' I think most Americans would have said, 'Remember, we were totally isolationist at that point. We'd have said, 'It's going to be between fascism and communism.' I mean, remember at that point, Michael, no one believed that liberal democracy had a future. Um it was either we were going toward, you know, one model or another. Uh it that was the mood at the time. And and the the New Deal so polarized America, we were incredibly polarized and tribal during that decade. And in many countries, obviously, and particularly in Europe, it brought dictatorships.”
The Declaration of Independence refers to 'free and independent states' (plural), and the US had an unlikely emergence as a unified nation given that independent states appeared to be fragmenting in the 1780s; this institutional creation was not inevitable and is under-discussed in American history narratives.
“The Declaration of Independence says we are free and independent states. S at the end. How did we ever become a nation? That is something we don't talk about as much...and and unfortunately we are running out of time. So I wanted to Neil, I wanted to do basically what Harley did and run you through 60 60-second answers to questions here, right? So one of your big fans, Cindy, asks, 'Given that some time has passed since the book came out, when would you say the ecpyrosis ecpyrosis will happen?'”
The Boomer generation, when first graduating from college in the early 1960s, appeared to be the most docile generation in the world and likely to enter establishment institutions, contradicting their actual role as architects of the 1960s counterculture and institutional critique.
“if you would like the Boomers uh back when they were, you know, early wave Boomers when they were just graduating from college they looked like the most docile generation in the world. In fact, Pat Brown, I grew up in California, but Pat Brown had this famous quote 1962. He said said, 'These kids, they're just going to be they're going to go right into the system. All of our defense industries, they're going to be the most easy to handle generation and you know, never did a a governor say anything so stupid because about 18 months later was Mario Savio, the free speech movement and suddenly we're not going to throw our bodies under the gears of the machine, you know, what? And then all hell broke loose, right?'”
Financial repression involves forcing institutions to buy more government bonds at negative real rates and forcing citizens to hold them, combined with inflation to reduce the real value of debt—a dual mechanism that was used during WWII and will be used again during the fourth turning climax.
“I'm going to inflate your bonds but I'm going to force you to hold them and if you're a financial institution, I'm going to force you to buy more of them. And that's exactly what we did during World War II.”
The American Revolution initially appeared to be Patriots versus Tories (with the Tories as external others), but the next climax was the constitutional struggle, which was internal, and it followed the 1780s, the most economically depressed decade in American history (exceeding the Great Depression in income per capita decline).
“American Revolution where in the uh late '70s uh it was you know, the the Patriots against the Tories and the Tories were regarded as an outsider uh Most of the deaths in American Revolution were Americans killing other Americans by the way. It wasn't killing British, but they were regarded as an outside other. The next big climax, however, which occurred later was the battle over the Constitution. And that was definitely an internal struggle and it followed by the way the most uh the most uh uh depressed uh economic uh a decade in American history, the 1780s. The 1780s shows a decline in um uh income per capita that actually exceeds the Great Depression.”
The American population believed in the late 1930s that America could not win WWII given its internal struggles and challenges, contradicting the post-war narrative that America's manufacturing dominance made victory inevitable.
“Even though America was clearly the manufacturing engine for the the the vast Not the vast majority, but a large fraction of the American populace thought there was no chance that the United States could actually win that type of war given the struggles and challenges that we were facing at home. Right?”
The 'Greatest Generation' (GI generation) in youth was actually highly problematic: they were overprotected, worried about, joined radical groups including the Communist Party, signed the Oxford Peace Pledge swearing never to serve in the armed forces, and were seen as soft and decadent—yet this same generation conquered half the world, defeated fascism, built the Interstate System, and created the Great Society.
“Let's go back and look at Judy Garland and Mickey Rooney, you know, as as very young adults in maybe the late 1930s...people worried about them. They were so protected, you know, we had child labor laws for them, they all went to high school, everyone knew that they had been much more protected than the earlier lost generation. Um they were kind of optimistic about the future with seemingly no basis in fact...they were all into sort of technological improvements, but they never had to do the really hard gritty jobs that their parents had to do. And most of all, they were radical in the most unseemly ways. This is a generation that joined the popular front, many of them joined the Communist Party...they were signing the Oxford Peace Pledge...swearing never to serve in the armed forces”
Internal conflicts almost inevitably lead to external conflicts because losing sides seek foreign allies, and external conflicts almost always develop internal dimensions; the American Revolution was driven by France's involvement, and the Civil War turned on whether European powers (especially Britain) would intervene.
“almost every time we have an internal conflict, it almost inevitably leads to external because if you're on the losing side of an internal conflict, you always want to draw in allies from abroad. We won the American Revolution cuz we pulled in the French. Well, we went an internal conflict external, right? Uh and if it hadn't been for the French, we wouldn't have won it...What did the South do when it was a losing? Well, what did it do? Try to bring in France. Try to bring in France. I believe they were one big battlefield victory away from getting uh Palmerston and uh Britain on their side. If Lee had won the Battle of Antietam, that was critical. That was before the the emancipation proclama-”
The 1930s saw an incredible growth in Communist Party registration and general anarchism/resistance to traditional order, showing that crisis-era societies are deeply polarized and open to revolutionary ideology before they reorganize.
“There was an incredible growth of the registration of the Communist Party. There was an incredible move in terms of general anarchism, etc., resistance to the traditional order.”
Population growth in the 20th century was unprecedented and drove approximately 50% of GDP growth over time through both capital broadening (increased workers) and capital deepening (increased capital per worker), but the working-age population in high-income and emerging markets will stop growing and begin declining by 2027-2028.
“completely predicated on a constantly expanding population, which has been responsible for roughly half of GDP growth over time, uh give or take, uh but that's been approximately true over time. Uh that's going to be gone...if you look at the entire high-income world plus the entire emerging market world, so that includes India, China, you know, all the usual suspects, Brazil and all the rest, that entire working-age population will stop growing and begin to decline slightly by 2027, 2028.”
During WWII, DuPont entered the 1930s with a global monopoly on aluminum but exited WWII without it, showing how rapidly corporate structures and competitive positions change during fourth turning climax.
“you know, I just want to remind people that DuPont went into the 1930s with a global monopoly on aluminum and came out without it. So it you know, these things change very rapidly and very unexpectedly.”
The South's window for British recognition in the Civil War depended on military victory before the Emancipation Proclamation; Lee's failure at Antietam cost the South the chance to secure foreign support because once slavery became the issue, European powers could no longer politically support the Confederacy.
“I believe they were one big battlefield victory away from getting uh Palmerston and uh Britain on their side. If Lee had won the Battle of Antietam, that was critical. That was before the the emancipation proclama- you know, the emancipation proclamation. Once Lincoln did the emancipation proclamation, it's kind of all over. Because now Europe really couldn't come in on the Southern side.”
Every fourth turning climaxes in inflation because inflation is one of several means of burden-sharing (along with taxation and bond sales) that governments use to distribute the costs of mobilization, and this pattern extends back to the War of Spanish Succession in the 17th century.
“in this movement toward tribalism community, which ultimately in the climax will involve the mobilization of the entire country, right? That always involves inflation. Always. Every fourth turning it climaxes in inflation. Why? Because inflation is just one of several different means of burden sharing. It's as simple as that, right? So what do you do? Well, you can tax, you can sell bonds, and you can inflate. And that is what governments do every single time going back by the way to the war of Spanish Succession. I mean that goes back way back in the past. I'm talking about the 17th century.”
At the climax of fourth turning, government will override all market mechanisms and may directly buy assets (like the Fed almost did with S&P 500 during pandemic) to prevent market prices from being revealed—markets cease to function as price-discovery mechanisms.
“particularly at climax of the fourth turning, everything is overridden by government. You know, my government's going to come in and maybe buy the buy the spy, you know, buy the S&P 500 just as they were about to do, you remember during the pandemic. In the extreme, I mean government will do anything just to prevent you from getting the market price.”
When soft decadent democracies act as a single unified organism, they produce an unbelievably stunning response that is more impressive than autocratic mobilization, because people are voluntarily joining rather than being coerced, making democratic mobilization during fourth turning climax more powerful than authoritarian alternatives.
“Um and it is uh it is much more impressive in its response than a uh autocratic society where you have to constantly scream at people to do things because now you've got everyone voluntarily joining in to do it, right? Uh and that's an amazing thing to watch. It is I think our future uh or I'm hopeful that that's our future, and it is one of those processes we go through in the fourth turning.”
Dictatorships like Germany and the Soviet Union viewed America as fundamentally decadent and lacking will despite recognizing US manufacturing capacity, leading them to underestimate American mobilization capacity and commit strategic errors like Germany declaring war after Pearl Harbor.
“was also the feeling among the dictatorships that yeah, America was very rich. They had these huge mass production things. I mean, you know, Ford was a was a was a was almost a saint in in in the Soviet Union. Everyone worshipped Ford, you know. Not not almost. Not almost. In both Germany and in the Soviet Union, he was absolutely perceived as the technologist, right? But here was the problem. They thought, yeah, all these things about America really interesting, but they're fundamentally decadent. They're fundamentally hedonistic, and they have no will, right?...so all of the dictatorships basically discounted America. Would Germany have declared war on America at the end of the the probably the most imbecilic decision in probably the last several centuries is, you know, declaring war on America after Pearl Harbor.”
Interest rates have two components: scarcity (unwillingness to lend due to personal survival concerns) and capital deepening requirement (need for additional capital investment when population growth requires labor force expansion); when population growth reverses, capital deepening is no longer required, fundamentally changing interest rate dynamics.
“Interest rates can be a function of scarcity. I'm unwilling to lend you resources because if I do, I'll starve to death. And there's a secondary component, which is you need capital deepening in order to maintain a capital-labor ratio. When you have explosive growth in population, you're going to see your capital-labor ratio fall. Therefore, you need additional capital investment. The Fed's response to the 1970s inflation anymore. Neil, quick question for you. We we certainly believe in cycles. We certainly in cycles, Neil. We certainly Hold on, hold on one second. Let Neil finish. We we certainly needed uh capital broadening uh uh through the 1970s and '80s. Uh not only boomers coming in, but women coming in in huge numbers. Workforce in the in the workforce. Uh no longer, uh Michael.”
Protectiveness is good, but when Gen Xers raise children it can become pathological because it removes all opportunity for failure and agency development, creating the anxiety epidemic documented in Jonathan Haidt's 'The Anxious Generation'.
“protectiveness is good except when it's in in xers, right? And then it becomes. It can become problematic. In fact, it even can become it can become up pathological. So Neil you're proposing a. Like like like an 80 year social cycle through four...the great book by Jonathan height that came out recently called the anxious generation. About the kids that xers have raised. Who are overprotective, right?”
Inflation is fundamentally about devaluing the claims that the prior generation holds on assets and future resources, freeing up those resources for the younger generation undertaking the mobilization, which is the real problem being solved beyond nominal burden-sharing.
“inflation is not a method for solving the problem per se, but it's a method of devaluing the claims that the prior generation has and freeing up problem. That is That's the problem you're solving.”
When people think history is linear upward (progressive), talking about cycles appears pessimistic; but when people think history is linear downward (declining), talking about cycles becomes optimistic because cycles imply recovery is inevitable.
“when you think that history is linear up, uh, uh, talking about cycles is always very pessimistic. But when you think that history is linear down, which is the way a lot of people do today, talking about cycles becomes a little bit more upbeat.”
During WWII, the US government owned 60% of the capital of America's manufacturing companies on VJ Day, all funded directly by the government and overseen by the government to keep fixed returns, showing how complete government ownership and control occurs during fourth turning climax.
“An interesting statistic on World War II, by the end of World War II on VJ Day uh the United States owned 60% of the capital of America's manufacturing companies. Yep. It's absolutely amazing. It was all funded by the government. They went into Ford, they went into General Motors, turn your entire assembly line into making tanks or jeeps or or or ships, we'll pay for it directly. And so we had Right. But we will do so at a fixed rate of return. So it's like there's plenty of profiteering that can occur. Oh, we had totally. Yeah, administered prices uh and then you won't know the real price until after uh uh, controls are lifted after the conflict.”
Green believes a deflationary episode is likely to occur first (due to bizarre interest rate policy of the last two years) before the inflationary climax period begins.
“I completely agree with that. It's part of the reason why I've warned people that I think what actually comes first is a deflationary episode associated with the truly bizarre behavior that we've had on interest rate policy over the last 2 years followed by everything that you're talking about”
Realigning elections occur approximately every 40 years during awakenings or crises, and the US just experienced realigning elections in 2016 and 2020 where working-class non-college voters shifted from Democratic to Republican parties and suburban college voters shifted oppositely, representing the seventh realigning election in American history.
“One of the most cycles that which fits what we do best actually is the cycle of realigning elections. Um you know, this is what political scientists always point out that, you know, once once about every 40 years we have a great realigning elections. Those have always occurred during awakenings or crises. And in fact, I think we just had our realigning election uh or elections, you know, it's usually one confirmed by another like 1932 confirmed by 1936 with FDR and the New Deal coalition. But I think we had it in in 2016 and and 2020. Uh where you had this recomposition of the two parties, right? Uh I working class, non-college went from the Democratic Party to the Republican. And you know, your suburban college went the opposite direction. And I've noticed that in the new political science textbooks, they're beginning to talk about the seventh realigning election in America, which is this most recent realignment.”
The US already carries a debt burden of approximately 100% of GDP in publicly held national debt, nearly equivalent to post-WWII levels, and when combined with autopilot entitlement spending programs, creates a trajectory that will necessitate massive increases in discretionary spending, cuts to entitlements, and reorganized healthcare systems to spread the burden.
“one of the reasons I think we are so sure to have inflation is that we already have a debt burden even before the climax which equals what we were in the last war it turned after the climax, right Michael? We're at about you know, 100% of GDP give or take on publicly held national debt. Uh and We're almost at exactly the same levels that we were after World War II.”
History is not linear but occurs through punctuated equilibrium—periods of stability interrupted by rapid institutional transformation at the climax of crisis eras, making history appear to happen suddenly rather than gradually.
“History is not gradual. History goes through periods of punctuated Um equilibrium. Yeah. It's like evolution.”
Howe cannot and will not predict whether the climactic conflict will be internal or external because the distinction turns on contingencies that are unknowable until a late point, though there is greater and greater potential energy for community against an 'other' that is undefined until revelation.
“I cannot predict whether it will be internal or external for a reason that I discuss actually pretty great length in the book and I actually have a long discussion of that because it's amazing how there's a razor edge...What I what I maintain is that that that it's a greater and greater potential energy for community against another. But what the other is is remarkably undetermined until a late instance.”
Organized conflict—either internal or external, or both—always reshapes societies during fourth turnings and is the incubator for community, and this reshaping renders many other factors secondary.
“what does the reshaping, and that kind of renders a lot of things secondary. Fundamentally, what does the reshaping? Talk about this in detail in the book, so I don't want to you know um Organized conflict. Always. Yeah. Always. It's either internal or external. One or the other. It always happens every fourth turn, right?”
Michael Green has been critical of inflation predictions in this cycle (contrasting with Harley Bassman's inflationism), arguing that inflation in the 1960s-1970s was driven by unprecedented population growth rather than political burden-sharing, but both agree inflation will play a role in fourth turning climax.
“I wanted to be very clear. I'm not pushing back on the idea that inflation is absolutely going to play a role here. In fact, what I think is most likely is is that we have retreated in this inflation framework. And I just want to um highlight that there are two very different reasons why inflation can happen. Inflation can happen because there is exactly the sort of political crisis that you're describing. And then there's also a very fundamental inflation. There's a fantastic paper by the Dallas Fed that actually hits on elements of this just released a couple of days ago, which is inflation that's tied to population growth.”
The world is increasingly growing more tribal and community-oriented both internally within nations and internationally, with nations clustering around different axes (similar to the 1930s), but people still do not recognize this tribalism and continue to interpret events as 'drifting into pieces' rather than coalescing into groups.
“the entire world is growing more tribal, more community-oriented in that sense. I mean, this is internally politically, but also internationally it's growing more tribal. I mean, we see now clusters of nations all beginning to orient themselves around these different axes, you know, this we called them during the 1930s. But in a way, we don't even recognize that we're living through this increasing grouping uh or what I call tribalism both, you know, within and among nations. We still think we're you know, drifting into pieces.”
Generations are shaped young by history—particularly by what they experience as children and during coming of age regarding what they fear, what they value, whether they are protected or unprotected—and then 40 years later that generation shapes history which shapes the next group, creating a closed system that produces four distinct generations with four distinct moods.
“Generations are shaped young by history, right? As children in coming of age, that sort of shapes them. Uh you know, and what they fear, what they value, what they get too much of, what they don't get enough of. Whether they're very protectively raised, whether they're just throwaway kids, no one really cares about them. You know what I mean? That's how that shapes them. And then 40 years later, that generation shapes the history, which shapes the next group. So, my thesis is that that creates a closed system. And out of that closed systems comes four distinct generations and four distinct uh moods that corresponds to each new generation coming of age and each generation moving up another age bracket, right?”
During each turning, people are haunted by the fear that they are still living in the previous turning, which creates a 'difference engine' that propels motion through cycles—the second derivative of fear of the last season drives the current season forward.
“In every turning, we are we are haunted by the fear that we're still living in the last turning. Right? So, during the American High, people don't, you know, we think oh, conventional culture, everything was kind of corny and and no individualism. You remember that people were still haunted by the fact that we might still be in a crisis. We were arming ourselves to the teeth. We were all gathering the the wagons...And it's interesting that during the awakening of the '60s, we still were afraid that we were living in the high...But I think in a way today during the during this crisis, we don't need we don't even think that we're in a crisis. We still think we're in the unraveling.”
Generational cycles require a built-in periodicity governor, and generational aging through recognized life phases provides this causal mechanism—not all cycles would have such a clear underlying driver, making generational theory more persuasive than other long-cycle theories.
“One thing that I like about a generational cycle is it has a built-in periodicity. It has a built-in governor, right? It has to do with aging, right? Every generation ages. We go through phases of life. And in fact, as those phases of life dilate, expand, or contract, that actually influences the uh the total timing of the cycle.”
Being modern—which is necessary for generational cycles to operate—requires a sense of progress (originating in monotheistic religion, accentuated by the Reformation, Renaissance, and French Revolution) where each generation thinks about where it stands in the path of progress and leaders devise different strategies, generating cyclical dynamics.
“To have a generational cycle, you must in some essential way be modern. What does it mean to be modern? It means that you have a sense of progress. And it could be because, you know, this really started with monotheistic religion. It probably was accentuated by the Reformation, the Renaissance, technology, certainly by the French Revolution. But you saw in the West, probably coming out of um uh probably the Reformation and and Renaissance, a real notion that history is linear and could could yield progress. What that does is then orient every generation to think, 'Well, where do they stand in that progress?' And makes every generation of leaders want to have devised different strategies of progressing. And that leads to a cycle.”
Why America was a community-oriented society during presidencies of Truman, Eisenhower, and Kennedy cannot be explained without reference to having just fought WWII—the shared sacrifice and community built during that conflict carried forward into the first turning.
“If you want to know why America was such a community-oriented society during the American high, the presidencies of Truman and Eisenhower and and John Kennedy it was you you can't explain that without talking about how we just went through World War II.”
Monetary policy has been a 'cheat code' that has allowed ignoring fundamental problems but cannot be a solution long-term; central banks will shift from interest rate setting to credit allocation during fourth turning climax.
“monetary policy has been the cheat code that has allowed us to ignore many of these challenges up to this point. It's not the solution. And and and central banks will be used for for allocation, credit allocation, not just setting of interest rates. And when you're allocating credit, no one's going to care about interest rates.”
Even with shifts to materials and defense sectors, returns may be constrained due to government price controls, financial repression, and nationalization risk in an increasingly collectivist society—companies will do better than alternatives but may not provide attractive returns on an absolute basis.
“my caution there is is that I think ultimately what you're describing is correct, that those resources will be used for rebuilding, but remember that we are talking about an increasingly collectivist society and so the returns associated with owning those assets could actually be quite restricted, right? Again, this idea of financial repression that you highlight.”
First Turnings are characterized by very close community, firmer and more trusted institutions, greater equality (particularly in economic life with regard to wealth and income), more conventional culture, and greater dedication toward the long-term future, and are responses to the preceding crisis-era turnings.
“we will enter a first turning, which is a time of um uh, uh, very close community um, uh, firmer, more trusted institutions, greater equality, uh, particularly in our economic life, you know, wealth and income. Uh, a more conventional culture and a greater dedication toward long-term future. We have always found that in first turnings. That's kind of the post-crisis era. And uh, like every other era, it's a response to the one that comes before it.”
Gen Xers are by far the most pro-Trump age bracket in current America (45-65 years old), showing 15-18 percentage point advantage for Trump over Democrats, more so than older Boomers, reflecting their under-protected, iconoclastic generational character.
“they are far and away, I don't know if you've seen the Siena uh in New York Times Siena polls, they are far and away the most pro-Trump age bracket in America today. 45 to 65. They're out there 15, 18 percentage points for Trump.”
The climax of the crisis always catapults technological development, as seen in the shift from the 1939 World's Fair showcasing technological ideas to massive wartime implementation of those technologies in the post-WWII era.
“The climax of the crisis always catapults technology. You know, just think of the from We went from the World's Fair of '39, where we all these things were just ideas, but the younger generation is looking forward. And look at how many of those things we implemented in the in the high that followed.”
The current generation (Gen Z and Millennials) are anxious due to overprotection, making them different from any previous generation in their inability to remember a time when an adult did not know their exact location.
“I go out and I talk to. 14, 15, even 17 year olds who tell me. They can't remember a single time in their entire life when they're some adult did not know exactly where they were right that were actually looking at them or monitoring their exact position. I don't know about you Michael, but. Those of us who are all I can't even imagine growing up that way, right? Where do you get a sense of agency? Where can you fail?”
During the 1960s awakening, people still feared institutional control and constraints rather than recognizing they had already left behind the preceding crisis era and entered a new phase, showing how each generation misidentifies which turning it is in.
“during the awakening of the '60s, we still were afraid that we were living in the high, right? Institutions were were were hemming us in, preventing us from growing, you know, taking away all our authenticity.”
When Millennials become generational leaders, they will be highly oriented toward left-brain engineering of the outer world and reorganizing communities and external infrastructure, in contrast to Boomer and Gen X focus on individual consumption and devices.
“I think when millennials become the generation in charge, Michael, uh they will be highly oriented around kind of left brain engineering of the outer world, you know, so that we all live a better life. And particularly reorganizing our communities, the external infrastructure of how we live together, not so much, you know, our our our individual devices. You know what I mean? Which I think what Boomers and Gen Xers have done so much, individual consumption. Millennials are really going to focus on how we live together as communities. Uh I will hate it, you know, a Boomer. I will just uh chafe under that world. I won't like it, but it will be what society needs and it is where we're going.”
When looking at generational character, one must look at underlying nature and archetypes in chrysalis rather than surface trends and fads, because a generation's true character is revealed only when circumstances elicit their core traits.
“So what you have to do when you look at a generation is not look at the trends, the fads and and so on. You have to look at the underlying nature. And if you would looked at the underlying nature of the GI generation, you would have seen a hero generation in chrysalis. You know what I mean? Because they did have that community orientation. They did have that long-term vision about the world they wanted to build.”
Generational archetypes represent not fixed traits but characteristic paths of development at different life stages, meaning young people of a generation may appear quite different from how that same generation looks decades later when in leadership positions.
“when we're looking um Michael at a at an archetype you're looking at uh a a a type of generation a sort of an archetype of a generation that has a characteristic path of development, right? It isn't just a thing for all time at all ages. You know, that's not how it works.”
The 1930s experienced ethnocentric populist leaders (Modi, Xi Jinping, etc.) born after WWII who are all pulling the world in the same direction, indicating a global Fourth Turning pattern.
“I think that the Anglo-American experience is probably the longest case study in it, but I think it's absolutely You look at these more ethnically ethnocentric populist leaders in charge in East Asia today. You know, the the Narendra Modi's and the Xi Jin Ping's, and just all of these people, they're all born after World War II. You know, they're they're all they're all of their generation and they're all pulling the world in the same direction.”
Crisis eras last 21 to 24, even 25 years long, with distinct morphology stages: precursor, catalyst, periods of degeneracy when tribalism increases and tribes are redefined, consolidation when fate of the country is at stake, climax when reshaping occurs (usually near the end), and resolution when treaties are signed and institutions become solid.
“when I talk about crisis, I'm talking about a crisis era. So, that lasts an entire generation. That could be 21 to 24, even 25 years long. In other words, it's a it's a whole generation, right? Um and we don't think this one's going to come to a close probably until, you know, 2032 or something like that...I do talk about a crisis era having a morphology and I talk about the precursor, the catalyst, uh these periods of degeneracy when we become increasingly tribal and we kind of redefine our tribes, and then finally the consolidation when we recognize the fate of our country is at stake. And then ultimately the the climax, right?”
Fourth turnings are times when societies rejuvenate institutions, render themselves institutionally young again, and defy entropy—reversing the perception of decline, disconnection, loneliness, and meaninglessness that characterizes the unraveling and crisis phases.
“Four returnings are times when by the By the time we get to the end of it, we actually rejuvenate our institutions. We render ourselves institutionally young again, and and we we defy entropy. And I think we're we're overwhelmed by entropy today. We just think that everything, you know, the energy drains out of everything. Everything becomes more complicated and more more indecipherable, more meaningless. We're all lonelier. We're more disconnected. This all reverses. And there are times in history when it reverses. I History is not gradual. History goes through periods of punctuated Um equilibrium.”
During fourth turning climaxes, investment in hard assets may not protect value because hard assets can be devalued in real terms relative to human labor value; wages historically rose significantly in late 1930s and WWII periods as labor scarcity and wartime mobilization increased labor value.
“I think that there's a very real risk that hard assets or many types of hard assets actually get devalued in very real terms versus the value of human labor in particular...Well, you know, unfortunately for on the last 150 years, you can't own human labor. That's a problem, Mike. Uh Yep. But it is no question about it. Uh you know, wages for any other kind of income hugely rose, you know, in the late 1930s and particularly during World War II.”
The reception of The Fourth Turning when it was released in 1997 was skeptical and dismissive as 'way out there' and pessimistic, but the reception of The Fourth Turning is Here has been remarkably different—readers are shocked that Howe is optimistic, asking 'How can you be so optimistic?' when they expected only decline.
“When we came out with The Fourth Turning back in 1997 the reaction was well, that's kind of interesting. It's way out there. It sounds kind of gloomy. You know, it's sort of pessimistic. You know, it's kind of a doomsday book way out there. The reception of this book when it came out last year um first of all, it it sold a lot better right off the gate. But the other thing is is that it was a very different reception. Everyone said, 'How can you be so optimistic? I mean, isn't this isn't this a decline without end?'”
America entered the Fourth Turning around 2007-2008, approximately when Howe and Strauss predicted it would occur in their 1997 writings, and will remain in this crisis era for about another decade until around 2032.
“I sort of date our entry into this winter season of history thinking of history as seasonal to the GFC 2007-2008 which is about when we expected it you know, way back in 1997. Um And we still have about a decade to go.”
America has historically come out well from fourth turnings and Howe is optimistic about the current one, though forewarnings of decline exist (as with Russia experiencing 30-35 million unnatural deaths from WWI through WWII).
“No. Uh I am very hopeful. Now, I can't tell uh there are forewarnings of the end very badly. We all know of countries that go through these. Uh look at look at what happened to Russia, you know, from World War I to the end of World War II. 30 to 35 million I mean, you know, unnatural deaths. Let me put it that way. But, you know, horrible. So, horrible things can happen in four returnings. Historically, four returnings have usually come out well for America. I'm optimistic about this one.”
Getting out of nominally denominated assets and publicly held equity (which is more easily regulated) into alternative or privately held assets involving commodities is advisable for fourth turning climax preparation.
“I do think, however, that if you're thinking about wealth, things you can own, I do think obviously get out of uh nominally denominated assets. That's kind of an obvious. And I would say publicly held equity may also be a disadvantage. It's more easily regulated. Going into more alternative or privately held assets, particularly ones that do involve commodities.”
The current Supreme Court decision on presidential immunity and the emergence of '#resist' rhetoric mirror Civil War patterns and indicate the US is entering a dangerous phase where the losing side views the incoming administration with the same resistance mentality as Germans viewed French occupation.
“Just look at how you know, what people are thinking about with regard to November 5th coming up and look at how divided our country is. It it is uh scary to me. Um this new Supreme Court decision on immunity, it's as though we you know, whoever comes into Washington, the other side will amount to resistance. Kind of like the Germans came into Paris. You know what I mean? This scares me.”
While the cycles predict a realignment winner (one party becomes the 'sun', the other the 'moon'), this cycle has not yet shown a clear winner, but historically the dominant party must eventually come to terms with the other party, creating a more cohesive country regardless of which side nominally wins.
“What we have not seen this cycle is a clear winner from the realignment, but but history tells us that usually appears. If you don't consider the fact we'll call yours the H wave versus a K wave that when the when it came in not heard of that. When the K and H both peak at the same time, you'll get a a larger and if they're and one's peaking one's bottoming, you'll get a softer kind of muting. Is is there a I mean, if you have a 60-year cycle and 80-year cycle, at some point they're going to double top and and double bottom. You know, I look a lot at economic cycles. Obviously, I you know, looking at uh uh you know, 3-year, 10-year, 20-year”
Defense and infrastructure companies will be at a premium during fourth turning climaxes and will be 'force-fed' by government and public sector investment.
“needless to say, things like defense and think things involving uh building stuff that communities need at scale, those kinds of companies will be at a premium and uh they will be force-fed by by governments, by the public sector.”
Elliott Wave and Fibonacci cycles cannot be objectively tested without an algorithm that can machine-learn identify wave patterns from random data, and Howe is skeptical of trusting pattern recognition without such objective verification.
“I've looked at that. I think I think you know, I'll I'll be honest with you, my opinion looking at uh uh you know, Elliot waves and so on is a is a testimony to uh uh uh humanity's ability to see uh to see uh patterns in anything. Uh I've tried to identify them. I've looked at, you know, random things and I say, 'Ah, it all kind of depends.' I In other words, if someone could actually give me uh an algorithm whereby I could put it into um you know, machine learning and actually just, you know, I could objectively determine what those are and I could test it, uh then great, but uh I've never seen any If you know someone who does that, I can just take any piece of random data and actually identify which of which of the are we on the up five or the down five? You know what I mean? Uh then great, I would implement it, but I'm not going to trust my own uh pattern recognition on that.”
The Kondratiev cycle operates on approximately 45-60 year waves (with Howe preferring the 45-year 'K-wave' model), which roughly aligns with second and fourth turnings being economically more difficult than first and third turnings.
“the Kondratiev cycle, you know, was is sort of hit by wars and things and it's partly taking in Europe, it's partly taking in America. Um I think that the K-wave cycle that works for me is basically a two-stroke cycle, which is more a, you know, 45-year cycle, uh which actually does work. And in fact, throughout our history our our second and fourth turnings economically are much more difficult than our first and third turnings, right?”
The book 'The Quartet' provides important analysis of the Constitutional Convention and the institutional crisis of the 1780s that preceded it, showing how fourth turning climaxes can lead to institutional reconstruction.
“There's some good books that have just came out by the way. One called The Quartet uh on the uh Constitutional Convention and what led to it.”
The cycle has not yet become completely global; the Muslim world operates on a slightly different timing for reasons Howe details in the book, and sub-Saharan Africa remains partly traditional and difficult to categorize, but the economically relevant part of the world can be described as operating on global cycles.
“Not not completely global. Again, I think uh you know, to look at I think the the Muslim world is a slightly different timing for reasons I point out in the book. Um and sub-Saharan Africa, it's kind of hard to say because in many ways they remain traditional. Um but I I think you know, for for for people who think about sort of the the the economically relevant part of the world, yes, I think you can say that it's global.”