In an article by a local politico, they posited a theory about major political upheavals every 80 years that resulted in significant violence. The theory is that every eighty years or so, people are so distanced ideologically, they can’t comprehend the other side. It started with England and the colonies who thought of themselves as States. Eighty years later it was Slavery and the civil war. Eighty years after that, isolationists vs. New Deal era interventionists which lead to World War II. Their theory is that we are right about that eighty year point, and the cycle has manifested in our cultural war. A war which they predict will end in violence if it follows the normal trend. If you’ve spent any time in my little town of Pittsboro and watched the protests over the civil war statue in the last election cycle, you could see where the local politico is coming from. More importantly, his article reminded me of another eighty year cycle theory. This theory is one of economic turmoil. More than likely the two are intertwined. That got me thinking, if we are aware of it, can we avoid letting it impact our lives?
In the 80 year cycle of economic prosperity, officially known as the “Kondratieff Wave” or “Kondratieff Cycle,” because it was originally proposed by Russian economist Nikolai Kondratieff in the 1920s. The official theory breaks down the different periods into four seasons. To distill the highly complex theory to its most basic element, economic upheaval happens about every 80 years because everyone who was alive during the last one is now dead. The current generation makes the same mistakes and goes through a cycle that reflects generations past. Usually this is caused by what my grandma would say is putting “good money after bad”. An economist would say it’s a massive overinvestment into securities where the perceived value is far far adobe the actual value. Eventually a major crash happens.
This is simple and makes sense even if the actual underpinning theory is significantly more complex. If you have no emotional connection to the past, then what you are doing seems new and different even if it’s really the same as what happened before. Remember the phrase “new economy” right before the dot com bust? I do. Unfortunately, most of the population isn’t a history theorist. They know what they have experienced and have been enculturated to by their family. A good example of family enculturation existed when I was a child. We were encouraged to “go to school and get a good job” because college, at the time, was fairly inexpensive and resulted in highly paid jobs with minimal dangerous physical labor attached to it. Over the years, that changed. Companies, who were loyal to employees in the 1950’s and 1960’s changed their philosophy of operating by minimizing the value, and related investment into, the humans they employed. Colleges got more expensive through feature creep and bureaucracy bloat. Easy student loans meant a generation grew up with advanced degrees, lots of debt, and an unreliable employer environment leading to limited ability to pay for their education or even maintain a minimal quality of life.
These generational cycles are all big trends that can be avoided if you are able to see them. When I say avoided, you can’t avoid a macro environment. You can minimize the macro environment’s impact on your life. In my case I would like to choose to not have anything to do with the cycle. It’s easier said than done like most things in life, at least economically. How do you survive in an economic downturn when there are no jobs available? I went through that in the great recession with nearly two years without a job in my field. The eventual job I got was with a boiler room operation masquerading as a real tech company.
It’s definitely easier to deal with emotionally if you see it as a cycle. The militant conservatives of the 2020’s don’t have an emotional or practical connection to the militant conservatives of the 1930’s or the 1860’s. If they did, they would accept that the world is changing. They would understand on an emotional level that the benefit of going to war over cultural values isn’t worth the price, especially if you are absolutely going to lose. I only say that because, the argument of “Let’s go back to the way things were”, always loses. We don’t have slaves, we aren’t isolationists, and I predict a European style nanny state is inevitable in another generation or two. I’ve come to terms with that.
These are social and socio-political trends. Even though I’m more interested in the 80 year economic cycle, or more specifically how the macro-economics affects micro lifestyles, I know the two are intertwined. This makes complete sense as how we manage our money equates to how we express our values. If we follow the political and economic theory we know that there is going to be a major economic upheaval soon. It may even include significant and impactful violence. Then how do you keep this from destroying your life?
I’ve developed some survival tactics.
Regarding pressing issues of the day, don’t have an opinion, at least not a strong outward opinion. If you have an opinion you become a member of a tribe. That alienates you from everyone who’s not in the tribe. It also keeps you from thinking clearly about the trends. Of course this puts you in the minority. In times of upheaval, most people are taking sides. It’s a skill that has to be developed, but you can try to be neutral in a way where most people think you agree with them. In the end, having a strong opinion isn’t a good thing, at least not for your quality of life.
Accepting you can’t change society will help you come to peace with things you may not like. Abortion legal and you don’t like it? Teach your kids why you don’t think it should be allowed, but don’t tell them to go out and protest at abortion clinics. That does nothing to actually change the world. It may even get them killed. Also, keep in mind their generation is different from yours. Don’t disown your kids because the world they grew up in sees abortion as an accepted right that they agree with. What about the other side of the aisle? Do you support trans advocacy to the extreme? For example, do you want insurance to pay for gender realignment surgery? Accept that there will always be a large portion of the population who will be militant in protecting traditional gender roles.
Another survival tactic is to protect yourself economically. This means conservative and diversified investments and limited debt. If you don’t have monthly bills, it’s easier to surf the months where there is limited income. The conservatively diversified investments means your losses in times of upheaval will be minimal. There will still be losses, but they will be something you can overcome.
The limited debt piece is really hard, but the most powerful. If you have no mortgage, no car payment, no student loans, no medical debt, and most importantly, no credit card debt, then you only have to deal with utilities and taxes. If you find yourself in a situation where you have to work three part time jobs because the economy is in the toilet, then you can still survive. It’s like financially treading water until the world gets over its issues and starts to work again. Yes, there is always bankruptcy but that doesn’t help keep your quality of life stable.
But what about everyone who doesn’t see it? These are broad trends and only someone who’s got an analytical mind and an interest in history will be drawn to them. That’s a very small subset of our population. Historical socio-political-economic cycles simply don’t come up as a topic of conversation at community gatherings. If you bring them up you will be quickly shut down, or emotionally reactive commentary will take over the conversation. This is because the majority of the world will rely on their life experiences to develop opinions and make decisions. Honestly, there isn’t a solution here. This ignorant majority is the reason why these cycles exist. I’d say ignore these people and eject them from your circle but that’s not an option if you want to have any sort of social life. We have to accept and interact with the good things people bring to our lives, even if that means dealing with the bad. That’s why I go back to the first role of not having an opinion.
There is more to be said about the other facets of the cycles, i.e. if you were entering the workforce during the last ‘spring’ cycle, right when broad adoption of computing was changing the face of business, then it’s pretty clear where you needed to go and what you needed to do. If you got involved in that industry at that time, jumped around to different companies that were growing, and took some risks, you’d have a great career behind you and a very fat retirement account. Unfortunately it’s pretty clear we aren’t in that season of the cycle. The world is bifurcated and very conflicted and the trends don’t look good. That’s why I chose to focus on survival tactics for uncertain times economically and socially.
Understanding the concept of an 80 year cycle is easy. Understanding it on an emotional level and reacting appropriately based upon where your birth lottery put you in that cycle is much harder. Still if you can see it, then there is real power in making big life and career moves based on the cycle. You can zag when everyone else is zigging. My final thought is that it’s a real shame they don’t teach this theory in high school history class. I think my life could have been much different had I understood this cycle thirty years ago. At least I can teach it to my kids, it won’t change the world’s cycle, but maybe it will change the arc of their lives as they navigate their own cycles.
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