By Alexander Perepechko
Published on October 16, 2016
Multiple analysts of the current presidential candidates in the United States like to say that our founding fathers are turning over in their graves. Without a doubt, Hillary Clinton and Donald Trump are extremely controversial candidates. Regretfully, the appeal to emotions of voters, negative campaigning, mutual accusation, and hassles between political parties and groups have gained the upper hand in this election. This makes American voters confused and angry. Citizens become less and less certain about the reality in which they live and more and more frightened about the future of this world.
It has become harder for a social scientist to foresee consequences of elections and to produce electoral forecasts. In this world of fundamental uncertainty, risks, and destabilizing forces (Bernard et al, 2013), it is next to impossible to predict when and why critically important socio-economic and political events might happen and how these events might be interconnected. Empirically detecting the mechanisms of societal change, and thereby calibrating policy to the real economy, is difficult. In this situation, the persistence of long wave-like tendencies in economics and elites on the global and macro-regional scale, allows one to shed light on the current presidential election in the United States.
Indeed, the evolution of society generally repeats itself in cycles. Although the theory of long economic waves (cycles, fluctuations), or K-waves, elaborated by the Russian economist Nikolai Kondratiev (also referred to as Kondratieff) (1892-1938) and the theory of elite cycles, developed by the Italian elitologist Vilfredo Pareto (1848-1923), recognize the idea of social progress, the perspectives of these scholars contrast with the concept of social evolutionism, which views societal progress as permanent (Vergara, 2013). But before turning to these perspectives, I have a few words to say about the role of mass media in the fragmentation of American society, politics, and elites.
Mass media and factionalized society and elites in the United States
Mass media and social networks tend to deepen the polarization of an already highly divided populace in America. Like-minded individuals withdraw into closed network communities and become so compartmentalized that they do not even attempt to find what they might have in common with others. These compartmentalized communities follow rigid ideological programs (socialist, progressive, liberal, conservative, etc.) which operate like memes (même in French means “same”). A meme is an activity, concept, catchphrase or piece of media which quickly spreads – often as mimicry – from person to person via the Internet and other non-genetic means (see Dawkins, 2006). Memes are extensively used by the mass media as base units with which to construct political slogans, cognitive attractors, and political attitudes. In fact, memes are used as units to assemble social constructs to vote for political contenders. When an electoral goal is achieved and these constructs are not needed anymore, they can be deconstructed, reprocessed, and reused.
Consequently, ideology as a category has pretty much ceased to exist in the current election. We observe and participate in a kind of leftist discourse with a conditional left and a conditional right (Kalashnikov, 2015: 179-180, 1999, 388; Kantor, 2013). Ideologies of the Democratic and Republican parties in this election are somewhat situational. There might be, say, a 90% match between certain economic, social, and political views of Hillary Clinton and Donald Trump. But these nominees of the American nomenclature are hopelessly divided by their involvement in competing projects of the future world order, by their dogmatism, and by symbols from the past…
It is important to recall that American voters live in a postmodernist virtual reality today. About 100 years ago, Pareto was concerned with whether a democratic political system insulates against or facilitates the hijacking of public authority by special interests (Pareto, 1935; Pareto, 1984). Today, possibly the predominant part of the American elite stubbornly defends the dysfunctional status quo at its own peril. These elite individuals have little to gain from change even if it is for the advancement of society at large. These rich and powerful individuals want to prolong the status quo which benefits only them. Even in the face of serious problems, there are many ways to ensure social procrastination for an extended period of time. To preserve the status quo, mass media and social networks are used 1) to promote a systematically privileged flow of information from a particular set of entrenched interests to public authority, 2) to supply politicians and functionaries with incomplete or misleading information and biased analysis of information, undermining a balanced analysis of reality, 3) to bring into play ideological blind spots of the people who occupy positions of public authority and those who advise them, and 4) to routinely suppress or distort unwanted signals (see Powers, 2012).
This concern expressed by Pareto a long time ago has become a reality in America. Factionalized elites in America fragment the nation into political groups that promote rhetoric and actions that are harmful to the country. This factionalization has become so strong that it has already impacted the overall fragility score (pressures experienced by a state) for the United States. In “2016 Country Indicators for Foreign Policy Report,” prepared a few months ago at Carleton University (see Carment, Langlois-Bertrand, Samy, 2016), the United States moved from the group of countries performing well (countries of Western Europe, other Anglo-Saxon countries, Japan, South Korea, Taiwan, Singapore) to the group of countries performing around the median (some Southern European, Eastern European, Middle Eastern, and Latin American countries).
Factionalized elites are an important factor in making America dysfunctional. Each presidential candidate claims that she (he) will be able to fix America’s troubled economy and flawed political system in which bargaining becomes strained and compromise is increasingly out of reach. Both candidates excel at tactical skills by playing with familiar issues and trying to attract undecided voters. Donald Trump even tries to formulate his goal: “Make America Great Again.” But neither candidate formulates – at least, not yet! – a strategy to implement their vision for America’s future. This is precisely what American citizens and the rest of the world expect to hear from the next president of the United States.
Let’s take the long view. The theory of long economic waves of Kondratiev can shed light on America’s changing place in the world economy. The concept of elite cycles of Pareto can provide ideas on how the American elite acts and changes.
So, what are these cycles about? Why are they valuable for political leaders?
Kondratiev’s long economic cycles
Kondratiev waves (sometimes called K-waves) show that economic and social development is primarily determined by long periodic cycles determined by technological innovations in specific economic/industrial areas (Kondratieff, 2014) (Figure 28). A cycle lasts for about 40-60 years. This model makes possible the economic and social analysis of structural changes and allows a reliable forecast of these changes. Long wave theory is important for innovation-based development and evolutionary economics. The long cycles fulfill a mostly strategic role: leaders who identify the current Kondratiev wave early are able to take the lead in economic and social development and benefit the most from its impetus. It is not surprising that politicians and strategists in Germany and some other developed countries take into consideration studies of K-waves.
Figure 28. Kondratiev economic cycles (Source: Based on Goldschmidt, 2004).
The recent long wave – the 5th Kondratiev cycle – has faded, although not ended yet. Information technology (IT) was and still is a source of power for the 5th cycle.
While the 5th wave is on the decline, the 6th Kondratiev wave has started. The economists Nefiodow and Nefiodow (2015) define psychosocial health as the growth vehicle of the new K-wave. The German health economist and biostatistician Andreas Goldschmidt and his colleagues searched for patterns and showed a phase shift and overlap of the IT cycle and psychosocial health cycle (Figure 28). The health care industry can be defined as health in a holistic sense – physical, biological, psychological, mental, social, ecological, and spiritual health (Nefiodow & Nefiodow, 2015: 47, 57). Unlike earlier periods, the last 25 years has seen overlapping long waves, which can look like one period of permanent structural change. Structural changes have transformed the economy from one dominated by petrochemicals and cars (manufacturing-based) to IT and then on to psychosocial health (including service sectors). Many manufacturing-based western countries in the wink of an eye turned into service sector economies.
There is lack of agreement over the cause of this unique phase shift and overlap of the IT and psychosocial cycles. Nor is there agreement about when the IT cycle ended (if at all) and when the psychosocial cycle began. Leo Nefiodow, a member of the “Our Future Economy” task force at the 2004 Club of Rome, Andreas Goldschmidt and their associates conjecture that historical growth phases in combination with key technologies do not necessarily imply the existence of regular cycles in general. They speculate that 1) different essential innovations and their economic stimuli do not exclude each other, 2) innovations more often than not vary in length, and 3) not all participants in a market benefit from innovations…
Fig. 29. K-Wave Pattern Revealed by Spectral Analysis. (Source: Korotayev & Tsirel, 2010:15 and extended by the author). Note: The first harmonic (curve 1) and the sum of the first and the third harmonics (curve 2) with the world war and interwar values replaced with the average of the distribution.
Long economic cycles at times fulfill a tactical role: leaders who recognize upswings and downswings phases of a K-wave early are able to take preventive anti-crisis measures by adjusting policies pertaining to structural dynamics and economic growth. The mathematicians Andrey Korotayev and Sergey Tsirel (2010) from Russia demonstrated the presence of K-waves in world GDP dynamics. Specifically, they used spectral analysis (a statistical approach for analyzing stationary time series data) to explore the world economic crisis of 2008-2009. These scholars posit that the 5th Kondratiev wave (IT cycle) continues and the 6th wave (psychosocial cycle) is in an embryonic state, thus there is no phase shift and overlap of these cycles. Korotayev and Tsirel suggest two interpretations of the crisis of 2008-2009.
Fig. 30. K-Wave Pattern Revealed by Spectral Analysis. (Source: Korotayev & Tsirel, 2010:15 and extended by the author). Note: The first harmonic (curve 1) and the sum of the first and the third harmonics (curve 2) with the world war and interwar values replaced with the geometric means.
The first interpretation is optimistic: their analysis suggested that the crisis of 2008-2009 might mark not the beginning of the downswing phase of the 5th K-wave but a temporary depression between two peaks of the upswing, in which the next peak might even exceed the previous one. If true, the new upswing started in 2011–2012 and will reach its maximum in 2018–2020 (Figure 29). The second interpretation is pessimistic and is based on the assumption that the crisis of 2008-2009 marks the beginning of the downswing phase of the 5th K-wave (Figure 30).
Pareto’s elite cycles
Not unlike Kondratiev in economics, Pareto believes that in politics development is primarily determined by long cycles. Long cycles involve stable configurations and dispositions of governing and non-governing elites. These enduring patterns and structures exist together with slow changes in a belief system for the whole society along dichotomies such as dogmatism vs. skepticism, religion vs. secularism, ideology vs. rationalism, etc. (Higley & Pakulski, 2012).
According to Pareto (1965: 33), major economic changes and crises are usually followed by multiple small changes – thus difficult to detect and measure – in the beliefs of the elites and governed. He also conjectures that changes in the strength of the central power are followed by changes in ideology and law. The crucial element in Pareto’s analysis is that economic and political cycles tend to synchronize, with the political cycle lagging slightly (Pareto, 1984: 14-17, 46) (Figure 31). This lag is sometimes called the Pareto lag or Pareto phase shift. Jumping ahead, I have to say that the economic cycle and political cycle illustrated in figure 31 are – nothing more, nothing less – the K-wave and Pareto elite cycle, correspondingly.
Elitologists John Higley from the United States and Jan Pakulski from Australia argue that Pareto had in mind two kinds of elite cycles. The long elite cycle begins and ends with the collapse of the governing elite (Higley & Pakulski, 2012). With this collapse, socio-economic and political orders administered by the failed ruling elite also change.
This long elite cycle consists of two short elite cycles: each ends with a crisis that significantly changes the composition of the governing elite and functioning of the political regime in a country. Indeed different combinations of “foxes” and “lions” in executive, legislative, and judicial branches produce different outcomes.
Figure 31. Pareto’s long elite cycles (Source: Generated by the author based on Pareto, 1984: 16 and Pareto, 1935). Note: P1 and P2 – Pareto phase shifts.
Consistent with Pareto, economic growth and diversification at first stimulate relaxation of norms and push for decentralization of political control (Figure 31). Availability of capital for investment and economic expansion bring about widespread deceit, cunning, and pseudological ideologies. During such a growth period, the governing elite is overloaded by “foxes,” who prefer decentralized control based on cooptation and ideological manipulation as ruling strategies (Femia, 2006: 71-72). These leaders often call upon apparently rational solutions to conflicts and appeal to social justice and equality in order to raise taxes and to cut back on expensive payoffs. In the long run, these practices cause social decay and economic crisis. This is the first part of the Pareto cycle.
During the second part of the Pareto cycle the economy is in crisis and may even contract (Pareto, op. cit.) (Figure 31). Such a period is characterized by adherence to established ways, traditionalism, and a tendency to save. At this time, there is a surplus of “lions” in the governing elite. These politicians prefer centralization of political control based on conservatism, nationalism, religion, and the use of power as ruling strategies (Femia, 2006: 71-72). To rationalize poorly funded domestic social programs and expensive military adventures, these leaders often appeal to God’s will, the invisible hand of the free market, and an invincible national character. Growing indebtedness negatively impacts the economy and leads to crisis.
In part 2 of this paper, we will analyze in detail relationships between K-waves and Pareto elite cycles and how these relationships might impact the current state and future development of the United States.
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