I recently took the time to catch up on some of my old reading material and watched some related Youtube stuff which helped to bring things into better focus given recent events. I remember reading books like “The Great Reckoning” by James Dale Davidson and Lord William Rees–Mogg which saw the separation of the world into three parts. Looking at things as they are today, there is definitely acceleration in this direction.
I’ve also studied Elliott Wave Theory and Robert Prechter’s Socionomics has always resonated with me especially given that mainstream economists and financial gurus were quite happy with their inaccurate forecasts of markets and economies. Socionomics takes the view that social mood drives markets.
I had given up on the traditional finance and economic nonsense very early on as they were attempts to force an outcome instead of reflecting reality. Although the wave principle and socionomics were useful tools in forecasting, the downside was that they did not adequately explain the underlying reason why any particular social mood was experienced.
Then there was the generational stuff written by Neil Howe and William Strauss. This was really, really interesting stuff. They wrote a couple of books which I waded through back in the mid-nineties: “Generations” and this was followed by “The Fourth Turning”. Suddenly, the pieces of the puzzle started fit together.
These guys are demographers and, in a nutshell, their thesis suggested that each generation got its chance to play on the world stage as it came of age. Further, and more importantly, each generation had its own unique characteristic traits; Boomers, GenX and Millennials being the most recent. If you get the chance, I encourage you flick through some of the Youtube links below.
Unfortunately, these kinds of topics don’t resonate with people during rising markets that reflect a positive sentiment. As such, the opportunity for conversation was few and far between. Further, it’s not mainstream which means building the framework for having a conversation is tedious to say the least – a lecture no one wants to hear. But things have changed and we are where all these guys forecast we would be all those years ago.
It’s the generational stuff that interests me the most as it reflects the entire cycle of life with each generation influenced by the previous in some way. Although Howe and Strauss put their work in the context of American society, it equally applies to us and all other nations for that matter.
Howe discusses the role of the Millennials in particular and their influence in world politics. They have come of age and they are making their mark. So what do they want? Well, it boils down to certainty, security and community. Certainty, particularly in decision making. It doesn’t matter whether it is right or wrong so long as there’s a clear direction forward. This has been one of the traits of our Prime Minister, Jacinda Ardern and goes some way to explaining her substantial approval rating in current times.
Security and community is also important to this group. They have seen the results of the previous two generations and clearly are not interested in following in their footsteps. In contrast, the Boomers and GenX were all about independence and quite happy taking risks. I’ve often heard that this generation is lazy. However, in my opinion, it just reflects the fact that they generally are not interested in what is currently on offer. Now that they are politically active, they will drive change in the direction of things that matter to them so buckle up for the ride.
Although Howe’s focus is on the Millennials driving nations in a new direction, we should all bear in mind that Boomers are all up for retirement – not just here but everywhere. As such, from my point of view, there is every possibility that their agenda will easily shift to align with that of the Millennials. Particularly so given the huge wealth gap, the unreliability of their investments going forward and the recognition that they cannot possibly expect the younger generation to foot the bill for their retirement years.
Over the past sixty or so years we (and many nations) have lost considerable infrastructure as a result of pursuing independence based free market policies. There were a lot of good things but also consequences that have now come home to roost. Looking ahead, I think there will need to be a lot of soul searching and top down planning to build new infrastructure. It wont be simple or easy and there will be plenty of pain as existing structures are unravelled to make way for something new whatever that may be.
There is often a lot of talk of conflict spilling over into possible war and parallels are often made with the early 1900s and in particular to the 1930s. However, as I see it, there is one big difference in relation to the demographics of that time compared to today. Back then, there were a lot more young people which enabled a population to recover. Today, the reverse is true.
Much of our world, including China, have an aging population that exceeds the younger generation although New Zealand’s census indicates we are holding our own. Personally, I can’t see us geriatrics with our A-frames fighting it out in the trenches. More importantly, given our current demographics, sending our young folk off to war in droves is tantamount to a nation committing suicide. Things would need to be really dire for a nation to head in this direction given present demographic information.
So, to sum it all up, I expect the road ahead to be difficult for many – no news there as change always is. It is likely that we will have higher rates of taxation to meet the demands for new infrastructure. It is likely that homes will fill with extended families – something that is already happening. It is likely that many services we were happy to outsource will be performed in-house. It is likely that our expectations will contract in line with our new reality.
But I am also hopeful. I expect local enterprises to get a boost. Being small and nimble is likely to out-perform the large. I expect at the end of it all, we may have found our connection to each other to be more meaningful. I expect that there will be something built that future generations can rely on in the same way as our generation was able to rely on the sweat of those who went before. From my point of view, it isn’t all just about us and the now. It is about recognising the cycle of life in its entirety and our place in that context.
I’ve had some questions raised about what type of infrastructure is likely to be focused on by the next generation. So, here’s my rough and ready speculative thoughts on this.
Let’s start with transport. Every car maker knows that their sales have been declining. They know that the younger generation are generally not interested in driving. Getting them to go for their drivers licence is difficult. I was keen for my driver’s licence when I was fifteen as it was another step towards freedom. My daughter, on the other hand, can drive well but getting her licence is not really a priority and she’s not alone. This generation prefers public transport for getting around. As such, it’s a no brainer that instituting really good quality reliable public transport services will be right up there on their list of priorities.
Next is IT infrastructure. I think proprietary closed systems will take a hit in favour of open source solutions. It easily ticks the boxes for security and community. Patents and copyrights and other intellectual property rights don’t really mean much in today’s world unless you’re a lawyer or you have plenty of cash to defend those rights. This generation doesn’t have anything so such things are going to be meaningless. Also, these cumbersome systems are archaic and get in the way of a “sharing” culture and open source is about building communities. Expect value in “standing on the shoulders of giants”.
Housing is next on my list. I expect property values to crash like a stone resulting in a massive redistribution of housing stock. Yes I know – no Boomer or GenX wants to hear this. Nonetheless, the current generation (generally speaking) doesn’t have any problems living at home with their parents. We shouldn’t forget that this was once the norm so it’s not surprising for us to come full circle albeit to the dismay of some parents who were hoping for freedom - chuckle, chuckle. Also, we have driven a basic need of having a roof over our heads way out of reach of so many people and this is something that cannot be fixed without the pain. The Government’s quantitative easing measures, ie printing money, only serves to prop up the status quo which is unsustainable. Eventually, somethings got to give.
Power generation and distribution is an essential part of staying connected and staying warm. Power is an essential service that “everyone” makes use of. Personally I can see this being drawn back into centralised government hands. Recent examples of manipulating generation capacity for profit only lends weight to this in my view so it’s only a matter of time. Private corporate ownership (even in part) always demands profits and this works against consumers and, in particular, those who can least afford it.
Clean and green is also likely to be a significant focus. However, this will not be simple when you give proper consideration to building such systems from an end to end perspective, ie. making solar panels is not necessarily a process without consequences even if the end result looks shiny. As such, there may be some difficult decisions ahead. One thing that I do think will come out of this is generation systems that are more decentralised. A house that generates its own power not only takes pressure off the main grid, but also provides a higher level of certainty and security for home owners.
Finally, the shape of societies and culture. If we look back upon ancient or older civilisations, you will note that they were generally run by women. Such matriarchal societies were the norm. This was replaced by patriarchal societies and we a very familiar with this. So having experienced both these forms, perhaps it’s time to head towards something that is much more balanced – just a thought.
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