|By Alan Hall, originally published in the April 2010 and May 2010 Socionomists|
Part 1: The Wave Principle Governs Fear and The Social Desire to Submit
Mention authoritarianism and most people imagine its ultimate incarnation—a dictator wielding top-down control. The socionomic perspective, however, paints a fuller picture.
Authoritarianism begins with a negative social mood trend, which in turn spawns a desire among some to submit to authority and among others to coerce their fellows to submit. At the same time, still others, caught up in the same emotional climate, battle against authoritarianism.
We forecast that a continuing long-term trend toward negative social mood will produce increasingly authoritarian—and anti-authoritarian—impulses and eventually lead to the appearance of severe authoritarian regimes around the globe.
A Society’s Definition of Normal Constantly Changes
To begin our study, we must look at how a society determines what is socially, politically and morally “Normal.” Different large-degree mood trends create dramatically different perceptions of normalcy, even in the same country. Positive mood trends produce increasing confidence and consensus; negative mood trends produce fear, anger, polarization, discord and challenges to the status quo. Chapter 14 of The Wave Principle of Human Social Behavior (HSB, p. 227-228) says:
A waxing positive social mood appears to correlate with a collective increase in concord, inclusion, a desire for power over nature … . A waxing negative social mood appears to correlate with a collective increase in discord, exclusion, a desire for power over people … .1
In the United States, for example, the massive 1950s-1960s Cycle wave III bull market featured broad agreement on many basic values and norms. Increasing inclusionism ushered Alaska and Hawaii into statehood in 1959, and society’s desire to express its power over nature led to, among other massive ambitions, the moon landings in the late 1960s and early 1970s. In contrast, today—10 years into a Grand Supercycle-degree bear market—U.S. society’s perception of itself and its future has radically changed. Increasing discord and exclusionism is evident in calls for secession, threats of violence against members of Congress and Arizona’s recent passage of highly restrictive anti-immigration legislation. As for power over nature: opposition to genetically modified foods and to carbon-producing industry show the opposite impulse, and NASA’s share of the federal budget is one-tenth what it was in the 1950s.
Around the globe, the desire for power over nature is yielding to the desire for power over people. Segments of society are increasingly accepting this as “normal”; others are battling against that view.
Introducing the Socionomic Nolan Chart
Social polarization is not limited to the one-dimensional political spectrum of left versus right. It also includes the opposing views of anarchy and authoritarianism. The first image in Figure 1 is our adaptation of the Nolan Chart, a simple diagram that depicts these complex political dynamics. David Nolan posits that left-wing liberalism advocates personal freedom, and that right-wing conservatism advocates economic freedom; libertarians advocate both, and authoritarians neither. We added the inner diamond to Nolan’s picture to show the distinction between the consensus that occurs during a bull trend and the polarization of views during a bear.
A Society’s Perception of “Normal” Is Constantly Changing
Images 2 through 6 in Figure 1 portray how a society’s perception of what is “normal” shifts over time.
- Snapshot of bull market, with the consensus view arbitrarily positioned in the center.
- Beginning of Bear Market: Polarization begins. People abandon the consensus view.
- Mood decline accelerates: Polarization increases, as do calls for separation, opposition and destruction of the status quo. Society’s sense for what is “normal” loses definition.
- Majorities form and one prevails: Society’s new normal gels nearer one of the corners.
- Mood trend bottoms, reverses: A new bull market begins. Polarization decreases. Partisans begin to embrace compromise and re-form a centrist view.
- Bull market under way: Society desires peace and cooperation. Optimism and willingness to compromise prevail. “Normal” may begin a slow shift, but even as the perception moves, society maintains consensus.
A large-degree mood reversal can accomplish a dislocation of views in a relatively short time. For example, the 1929-1932 Supercycle wave (IV) mood decline set up a dramatic change in the United States’ consensus view of “normal.” First, the trend toward negative mood polarized society and diffused consensus, throwing “normal” into flux. Once the bottom formed, the majority began to emphasize unity and self-sacrifice in the face of external enemies; a new centrist-diamond “normal” coalesced, lower and further left than before. This new normal persisted into the 1950s bull market, when U.S. citizens displayed unusual compliance with reduced economic freedom via record-high tax rates. The consensus held for 50 years, with moderate Democrats Kennedy and Clinton and moderate Republicans Eisenhower, Nixon and Bush reflecting the middle-of-the-road political viewpoint.
Bull markets generate consensus even in societies that are very near a Nolan extreme. For instance, the Supercycle wave (IV) of 1929-1932 caused Soviet society to polarize as well. Amid rising factionalism in 1929, Joseph Stalin attempted a hard-left, super-authoritarian move to collectivize agriculture. The authoritarian/anti-authoritarian conflict took a heavy toll:
Farmers considered this policy a return to serfdom. They resisted and destroyed about half the U.S.S.R.’s livestock—some 55 million horses and cows—whereupon Stalin responded by sending about a million families into exile. This conflict, and a catastrophic decline in grain production, exacerbated the famine of 1932-1933 that killed between five and 10 million people.
—Global Market Perspective, “A Socionomic Study of Russia,” November 20072
After Supercycle wave (IV) bottomed, the Soviet centrist diamond re-formed near the repressive authoritarian pole. Then from this unlikely position, the bullish mood behind Supercycle wave (V) unified Soviet society enough that it achieved remarkable success in its space program. The Soviets orbited the first satellite, Sputnik, in 1957; put the first man into space in 1961; and landed the first spacecraft on the moon in 1966.
In contrast, declining mood currently has one of the world’s leading democracies implementing authoritarian practices. In 2004, the British government’s own information commissioner warned that the country risks “sleepwalking into a surveillance society.” Since then surveillance has only increased, while the nation debates whether to accept the scrutiny.
Large-degree bear markets can lead to calls for freedom, authoritarianism, left-leaning and rightist solutions. Where a country ends up is unpredictable. What is predictable is that societies tend to look far different after major mood declines than they did before them.
Bear Markets Encourage Authoritarianism
Past issues note that the stock market is our best measure of social mood. Our studies also show that the complete U.S. stock record, with British data preceding, is an excellent meter of long term global mood. Such is the case with our study of authoritarianism. (For more on why U.S. stocks reflect global mood, see “A Socionomic Study of Russia,” November 2007 Global Market Perspective; call our offices for details.)
Figure 2 shows that over the past 300 years, major bear markets hosted most of the notable examples of authoritarianism. There are incidents of authoritarianism in bull markets, but they are fewer and smaller. Let’s review the history:
Grand Supercycle wave & produced both an increasingly authoritarian Great Britain and the American Revolution as a response.
In Supercycle wave (I), Cycle wave IV included the United States’ Tariff of 1828. The South called it the “Tariff of Abominations” because it supported the North’s industry at the expense of the South’s agriculture. The September 2001 issue of The Elliott Wave Theorist explains the forecasting value of fourth waves:
The negative themes in “wave four” within the “five waves up” presage those that will dominate, more dramatically and on a much bigger scale, in the ensuing “three waves down.”
In this case, wave IV discord foreshadowed the coming extreme polarization of Supercycle wave (II), which led to the American Civil War.3
Historians associate the 1850s—the second leg down of Supercycle (II)—with the Authoritarian Decade in Great Britain, Austria and Prussia. In Europe Reshaped 1848-1878, J.A.S. Grenville writes:
The decade of the 1850s presents an extraordinary contrast to the turmoil of the ‘hungry forties’ … . The state was paternalist and authoritarian.4
The authoritarian impulse was not limited to those countries. In the United States, Lincoln suspended the writ of habeas corpus, which allows appeal against unlawful imprisonment, and dismissed the states’ understanding that they could secede from the Union at will. In France, Napoleon III revived and extended Napoleon I’s authoritarian nationalism. His police state tactics—spies, arrests, political trials and restrictions on freedom of speech, assembly and the press—“provided the old ruling classes of Europe with a new model in politics” (A History of Western Society, McKay, Hill, Buckler).
Later, Cycle wave IV of Supercycle (III) brought the initial rise of the authoritarian left via the Bolsheviks in the 1917 Russian Revolution. To a lesser degree, it also brought authoritarianism to the United States. Sociologist Robert Nisbet wrote:
The West’s first real experience with totalitarianism—political absolutism extended into every possible area of culture and society, education, religion, industry, the arts, local community and family included, with a kind of terror always waiting in the wings—came with the American war state under [President Woodrow] Wilson.5
The American Protective League—a quarter-million volunteer vigilantes authorized by the U.S. attorney general—spied on, assaulted, detained and otherwise violated the civil rights of citizens. They were joined by:
A mammoth web of patriotic organizations enlisting thousands of volunteer spies … . The Liberty League, the American Defense Society, the Home Defense League, the National Security League, the Anti-Yellow Dog League … the Boy Spies of America, the American Anti-Anarchy Association, and the Sedition Slammers.6
In Liberal Fascism, Jonah Goldberg detailed that during the late teens, the Wilson Administration censored, harassed and threatened the American press. In Abrams v. United States (1919), the Supreme Court upheld a sedition verdict and a sentence of 20 years in prison for five Russian immigrants who tossed anti-American leaflets from the windows of buildings in New York City. The government also imprisoned U.S. citizens for verbalizing opposition. For example,
In Waterbury, Conn., a salesman was sentenced to six months in jail for remarking that Lenin was “one of the brainiest” of the world’s leaders.7
The larger decline of Supercycle wave (IV) brought more extreme authoritarianism. Millions of Russians died as a result of Stalin’s collectivization of agriculture and Purges. Fascists seized power and began militarizing Italy, Germany and Japan. Authoritarianism increased in America as well, but less so than in other countries. HSB (p. 284) observes:
One manifestation of [the] mood extremity was the increased enrollment in and disruptive activity by the Communist Party in the U.S. In contrast to the German experience, however, the most extreme political forces never achieved political control … .8
The Franklin Delano Roosevelt administration flirted with dictatorship, redistributed wealth and made extraordinary efforts to “pack” the Supreme Court.
The next major bearish period, Cycle wave II (1945-48), echoed Supercycle (IV). It launched the careers of two of history’s most notable authoritarians: Kim Il Sung of North Korea in 1948 and Mao Zedong of the People’s Republic of China in 1949. Kim imposed isolation and economic deprivation on North Korea. Mao’s authoritarian Great Leap Forward (1958-1961) led directly to the largest famine in history. This particular Mao program came during a bull phase in much of the world. But Mao’s subsequent and more overtly violent Cultural Revolution (1966-1976) came during Cycle wave IV. It killed as many as 30 million people.
Just before Mao began his bloody Cultural Revolution in China, Nicolae Ceauşescu assumed power in Romania. The year was 1965 and a long bull market (Cycle wave III) was nearing an end. Early on, Ceauşescu enjoyed popular support for his independent nationalism and challenges to Soviet dominance. But as Cycle wave IV matured, Ceauşescu began to emulate the totalitarian systems of China, North Korea and North Vietnam. He expanded government control into many areas of Romanian life, outlawing contraception and divorce, for instance. He starved Romania’s economic growth and controlled the media to create an idealized and heroic public image of himself.
In 1975, with Cycle wave IV still under way, Pol Pot led the Cambodian Khmer Rouge movement to power, imposing agrarian collectivism, civilian relocations, slave labor and executions. His genocides killed as many as 2.5 million Cambodians.
In Iran, the shah’s increasingly despotic reign ended with the even more authoritarian Islamic Revolution in January 1979. A few months later, Saddam Hussein used security forces to assume control of the government in nearby Iraq and quickly suppressed all political opposition. In 1980—as wave IV was finally grinding to its end—Saddam invaded Iran. The eight-year conflict, among the longest and deadliest wars of the 20th century, ended in stalemate, with estimates of up to 1 million dead.
Such actions are among the fruits of major declines in social mood.
Resurging Authoritarianism Today
Another bear market began in 2000, and authoritarianism is waxing along with it.
Liberal democracies, which feature constitutional protections of individual rights from government power, have risen in concert with the Dow Jones Industrial Average since the early 1800s. That trend appears to be faltering. Figure 3 is from the February 2010 issue of The Elliott Wave Financial Forecast (EWFF), which observed:
Just as stocks struggled higher in the 2000s, the number of liberated democracies slowed dramatically. A slight tick down, from 90 to 89 “free” countries in 2009, confirms what we said here last month: The social effects of the bear market are mostly still to come. … According to Freedom House, 2009 was “marked by intensified repression against human defenders and activists in 40 countries.” It was the fourth straight year of increased repression, “the longest stretch of civil rights setbacks” in 40 years.9
Freedom House is an international organization that researches and advocates democracy, political freedom and human rights. Its director of research, Arch Puddington, wrote “Civil Society Under Threat,” published in the spring 2009 issue of Harvard International Review. It begins with this warning:
After several decades of consistent progress, the state of global freedom has entered a period of stagnation and possibly even decline … . Among the principal targets of the new authoritarianism is civil society. The result has been a notable reversal for freedom of association throughout much of the world.10
After a long trend toward positive social mood, authoritarianism’s popularity hit bottom in the 1990s, when the Soviet Union collapsed and political scientist Francis Fukuyama proclaimed “the universalization of Western liberal democracy as the final form of human government.” Now, just a decade later, authoritarianism is resurgent.
Both Russia and China have histories of extreme authoritarianism, and both countries are now attempting to recast democracy as a blend of free markets and authoritarian politics. British historian Timothy Garton Ash calls authoritarian capitalism “the biggest potential ideological competitor to liberal democratic capitalism since the end of communism.” A June 2009 Foreign Policy Magazine article, “Authoritarianism’s New Wave,” describes the countries’ impressive new global media tactics:
Today’s authoritarian regimes are undermining democracy in updated, sophisticated, and lavishly funded ways … . The Kremlin has launched Russia Today, a multimillion-dollar television venture … . Beijing has reportedly set aside at least $6 billion for these media expansion efforts.11
Meanwhile, many liberal democracies themselves are becoming increasingly authoritarian. In October 2001, President George W. Bush signed the USA Patriot Act, giving law enforcement officials unprecedented access to Americans’ telephone and electronic communications. The Bush administration itself has been widely criticized for suspending habeas corpus and employing torture in off-shore prisons such as Guantanamo Bay and Abu Ghraib.
The British think tank Adam Smith Institute reports that the U.K., a nation with less than one percent of the world’s population, possesses one quarter of the world’s security cameras. Ironically, Britain in February introduced a new law—Section 76 of the Counter-Terrorism Act 2008—that can send those who photograph police to jail for 10 years.
A graphic example of Britain’s nascent authoritarianism, reminiscent of Orwell’s 1984, is this poster, which first appeared throughout London in October 2002. It advises citizens to feel secure under the surveillance. In a more recent example, the popular British radio show TalkSport broadcast a government anti-terrorism advertisement—available on YouTube—encouraging citizens to be suspicious of neighbors who keep to themselves, close their curtains or use cash instead of credit cards. The ad ominously counsels, “If you suspect it, report it.”
Some authoritarian tragedies begin this way. Robert Gellately, author of The Gestapo and German Society: Enforcing Racial Policy 1933-45, writes of his surprise upon reading a collection of 19,000 Gestapo files that Nazi officers were unable to burn before the Allies arrived:
I had found a shocking fact. It wasn’t the secret police who were doing this wide-scale surveillance and hiding on every street corner. It was the ordinary German people who were informing on their neighbors … . business partners turning in associates to gain full ownership; jealous boyfriends informing on rival suitors; neighbors betraying entire families who chronically left shared bathrooms unclean or who occupied desirable apartments.12
A Princeton University Internet expert says, “The inconvenient truth is that authoritarianism is adapting to the Internet age” (St. Louis Today, March 4, 2010). In addition to providing governments a cheap online channel for distributing propaganda, the Internet makes it easier for them to spy on their own citizens. Here are just a few examples.
In February, U.S. President Barack Obama extended three provisions of the Patriot Act, allowing the government “to obtain roving wiretaps over multiple communication devices, seize suspects’ records without their knowledge … and conduct surveillance of someone deemed suspicious” (Christian Science Monitor, March 1, 2010). The Obama administration also recently unveiled a new computer intrusion detection system called Einstein 3 to guard against cyber attacks. The Department of Homeland Security insists the system does not compromise privacy: “No agency traffic is collected or retained by US-CERT unless it is associated with a cyber threat.” As cyber threats increase with the bear market, however, so will the private information associated with them, likely widening Einstein’s scope.
Also in February, the French National Assembly passed a bill to “allow unprecedented control over the Internet … . a new level of censorship and surveillance” (Der Spiegel February 17, 2010). The bill creates “one of the toughest censorship regimes of any robust democracy in the Western hemisphere” (Ars Technica, February 17, 2010).
Google Inc. notes, “The number of countries that censor the Internet has grown from a handful eight years ago to more than 40 today…”
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Most economists, historians and sociologists presume that events determine society’s mood. But socionomics hypothesizes the opposite: that social mood determines the character of social events. The events of history—such as investment booms and busts, political events, macroeconomic trends and even peace and war—are the products of a naturally occurring pattern of social-mood fluctuation. Such events, therefore, are not randomly distributed, as is commonly believed, but are in fact probabilistically predictable. Socionomics also posits that the stock market is the best available meter of a society’s aggregate mood, that news is irrelevant to social mood, and that financial and economic decision-making are fundamentally different in that financial decisions are motivated by the herding impulse while economic choices are guided by supply and demand. For more information about socionomic theory, see (1) the text, The Wave Principle of Human Social Behavior © 2011, by Robert Prechter; (2) the introductory documentary History's Hidden Engine; (3) the video Toward a New Science of Social Prediction, Prechter’s 2004 speech before the London School of Economics in which he presents evidence to support his socionomic hypothesis; and (4) the Socionomics Institute’s website, www.socionomics.net. At no time will the Socionomics Institute make specific recommendations about a course of action for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended.