This is the chart that I tapped out rather carefully. I’ve highlighted the key cell in green.
“Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II.”
William Strauss & Neil Howe, The Fourth Turning: What the Cycles of History Tell Us About America's Next Rendezvous with Destiny (published 1 Dec 1996)
I strongly expect we’ve arrived at the (kinetic) origins of a big global event. The foresight of the authors above seems to be amazing and uncomfortable. This year Neil published The 4th Turning is Here, a book updating and extending the previous previous collaboration with Bill Strauss. They mapped the many recent cycles of human generations and how the cycles recur and reform. In his model are cycles with four seasons of approximately 20 years each. Each generation comes to adulthood in a sort of season much like the annual seasons. Baby boomers actually faced the springtime of love and millennials the autumn of good vibes.
The fourth season in each cycle is the one that most directly experiences widespread conflict as charted above. The last to experience this was the generation we now call “The Greatest Generation” and the new generation’s crucible seems to have arrived. If the model holds we are now witnessing the inevitable sweep of a persistent force toward tangible kinetic conflict and the horrors that brings.
In rough agreement with Strauss and Howe are at least a few other hyper-intelligent prophetic analysts, who from different angles and mechanisms seem to be describing the same overarching pattern:
Peter Turchin, has a 2023 book aptly titled “End Times”; Ray Dalio, recently published “The Changing World Order”; and George Friedman in 2020 put out “The Storm Before the Calm”.
These are not lightweight efforts, Friedman, Howe’s, and Turchin’s analysis on these cycles started independently around 4 decades ago and have remained independent efforts.
On the one hand, I hope, they are all wrong but the collective analysis seems to me to point to real dynamics, dynamics that in fascinating and terrifying ways seem to transcend all the other major changes that occur through history.
They are all fairly directly saying: that now is a time of chaos and conflict, and while it has been easier to see it as a guess and a future problem in past reads, it seems reasonable to take their prophecies more seriously as events seem to be unfolding. Maybe, hopefully, we will all be wrong.
However, with that context. I believe global energy production is the place where the heaviest cascading dominoes make contact. Rolling feedforward when energy is taken off the global market accelerates discord.
If one or more major energy exporters lose the ability to export there is a good chance that global energy supply decreases and prices significantly increase. When that happens the world’s poor become poorer. That increase in impoverishment is like sparklers falling on a parched forest floor. Humans hate a regress in their quality of life and are apt to do the most about it when existing on the knife’s edge of survival.
Despite economists and environmentalists perpetually ignoring the obvious, petrochemical energy prices are the base of all economic prices and the base of all quality of life for most humans. Another way to say the same thing is that the command of calories any individual has in society is his or her wealth.
When energy prices go up, transportation, production, & food prices also go up…relative to your time, your labor & your life. This is not the inflation emphasized by money printing. These prices go up, up in real terms regardless of the way the government handles money. In the short term, there is little governments can do to make it better. Efficiencies help, but more energy is ultimately the answer.
When we as individuals run out of energy we cease to exist. Before that happens; however, we usually become irritable and rebellious and so too our nation-states become bellicose and monger for war.
Leaders get nervous as local conditions deteriorate and the poor become restless. They point their sabers at foreign enemies while internal contenders mount plans to ascend and overthrow. As history suggests, internal political rivals are often the first enemies to be targeted on the way toward militarism and external conflict.
As of late October 2023, It seems Russian energy supplies were more than replaced by a combination of substitutes and simple redirections to new purchasers. Power and profits have changed hands but so far, the total global energy including natural gas has remarkably been stable and in some cases even increased. The below is natural gas production which includes a 12% drop in Russian exports made up for by the US, Canada, the Middle East, China, Australia, and others.
Here is the total global energy production which is continues to increase.
Below is the blurb from the chart from website, EnerData:
Global energy production accelerated in 2022 (+3.7%), much above its 2010-2019 average (+1.6%/year). The growth was driven by China (+5.6%), the United States (+5.8%), Saudi Arabia (+15%), India (+7.9%), Indonesia (+9.4%) and Brazil (+7.8%) and partly offset by a drop in Russia (-4.4%), the European Union (-6.2%) and Africa (-0.9% due to Nigeria and South Africa).
The globe has managed the RU/UKR energy crisis remarkably well. The below graphic shows where excess supply can and has come from. We can see in this chart that the significant current global vulnerability is Iran. Perhaps Iran knows it has increased relative power and through Hamas is or was gambling or flexing its muscle. Could they have assumed countries of the globe would feel dependent?
We all need cheap energy to maintain internal and external stability. I wonder if even larger actors are not also playing them and us and easily we are falling for it.
Our political class has an incentive to maintain power and one of the best mechanisms and distractions is a war. As such, there seems to be a US bipartisan momentum for antagonizing Iran and complementary rhetoric from Iran against Israel’s now live incursion into Gaza. Israel has crossed the Rubicon as far as Iran initially warned. Globally countries are being forced to take sides. In recent days, Turkey, a member of the EU with a large standing military, has publicly supported Hamas despite its economic and political ties to the West. Many countries are finding themselves in difficult positions torn between popular sentiment and existing economic or political interests. I hate re-iterating the news, but my main point is that bifurcating sides are being taken and tensions are rising in a global feedforward loop that few understand and likely none can control.
A US conflict with Iran with the proxy war raging in Ukraine might qualify itself as a global war, but I’ve got my attention glued to the second and third-order effects. What would an energy and food price squeeze do to other parts of the world?
There are almost certainly fissures below the surface in many societies. Ones we cannot predict. Of relevant note, we did not predict the fall of the Berlin Wall and we did not predict the Arab Spring. So as much as I might like to know, I don’t think any of us can really know what other fires start with new increases in prices simultaneous to Religious fervor, credit deflation, and foreign capital retractions from much of the world.
God speed in and through these “interesting” times.
Afterword: An excerpt from Peter Turchin’s End Times
“When the equilibrium between ruling elites and the majority tips too far in favor of elites, political instability is all but inevitable. As income inequality surges and prosperity flows disproportionately into the hands of the elites, the common people suffer, and society-wide efforts to become an elite grow ever more frenzied... the wealth pump; it’s a world of the damned and the saved. And since the number of such positions remains relatively fixed, the overproduction of elites inevitably leads to frustrated elite aspirants, who harness popular resentment to turn against the established order.”
Turchin’s models show that when this state has been reached, societies become locked in a spiral very hard to exit.
“In America, the wealth pump has been operating full blast for two generations. As cliodynamics shows us, our current cycle of elite overproduction and popular immiseration is far along the path to violent political rupture. ”
References:
The Fourth Turning (interview): What past generations can teach us about our future
End Times: Elites, Counter-Elites, and the Path of Political Disintegration