When I started the English side of this web site, I was planning to translate all my new posts from the French side. I now realize that it is too much work for me. Instead I have decided to post occasional summaries. Their number will start with an E (for English) like this one. Whenever they are true translations of the French side, their number will be the same on both sides.

In a book entitled «The Fourth Turning: An American Prophecy» (1), William Strauss and Neil Howe claim that history in America (and by extension, most other modern societies) unfolds in a recurring cycle of four generation-long eras, implying that America is now heading toward a «fourth turn» during which populism, nationalism and state-run authoritarianism might be on the rise. Today, the election of Donald Trump at the presidency of the United States is widely considered as a turning point in the political life of this country. It seems to confirm their prediction.

I already talked about economic cycles (2) and the evolution of political opinions (3) on the French side of this web site. Since I came to a conclusion similar to that of Strauss and Howe, it gave me an incentive to summarize here several posts from the French side.

Recurring cycles have long been reported in economy, first by Clément Juglar in 1862, later by Joseph Kitchin in 1920. These are business cycles with typical periods of less than 10 years. A Russian economist, Nicolaï Kondratiev, was the first to show evidence for economic cycles with a much longer period of, typically, 45 to 60 years. The Austrian American economist Joseph Schumpeter interpreted these cycles as due to recurrence in innovations, a process he dubbed «creative destruction», while Simon Kuznets, and more recently Thomas Picketty, have shown their relation with the unequal distribution of income.

In their 2009 publication (4), historians Peter Turchin and Sergei A. Nefedov have shown evidence for secular cycles in History. These demographic cycles are similar in length to those of Howe and Strauss, with successive turns, called «phases», described as a depression phase followed by an expansion phase and a stagflation phase. According to their description, the election of Trump would mark the beginning of a crisis phase.

In my own book (5), I have explained that human societies are «dissipative structure», a term first coined by Ilya Prigogine. Physicists now realize that all dissipative structures in the universe self-organise through the same universal process called «continuous phase transitions». Evidence for this process was found from both particle physics and cosmology. A Danish physicist named Per Bak (6) has shown how that this process applies as well to ecosystems, our own brain, or human economy. He named it «self-organized criticality».

Self-organized criticality consists of cycles of oscillations of the same nature as the Carnot cycles of a heat engine. These oscillations occur around a critical point where a slow continuous phase transition alternates with a fast abrupt transition. The slow continuous transition, also called macro-evolution, gives rise to large animals and plants, or large economic structures such as USSR and Europe. Biologist call this phase «K selection».
During the abrupt phase transition, also called microevolution, large structures break down or disappear and give rise to small animals, small plants or small economic structures such as transition towns. Biologist call this phase «r selection». Figure 1, inspired by Erich Jantsch, shows how this process has occurred since the beginning of the universe (7).

Figure 1. Oscillations around a critical point between a macro-evolution (continuous phase transition) and a micro-evolution (abrupt phase transition), after Erich Jantsch.

According to this scheme, our current civilization will collapse through an abrupt phase transition during which the United States as well as the European community will, at least partly, split apart. Then will follow a slow continuous phase transition during which the whole mankind will progressively form a single planetary civilisation.

To further explore this process, I have proposed to describe the state of an economy in terms of Gibbs potentials where each product has two potential values: a use value and an exchange value (8). The use value expresses «demand» and plays the role of a social pressure P. The exchange value expresses «supply» and plays the role of an economic temperature T. Associated with these intensive quantities are two extensive quantities, a production volume V (number of items produced per year) and a revenue $ which plays the role of entropy. In a steady state, balance between demand and supply is given by the equation P.dV = T.d$.

For a given production, V can be expressed by a state equation V = f(P,T) which is the analog to the state equation of a fluid. When averaged over the production of a whole country, it describes the state of its economy. The state of a fluid near its critical point is well represented by the so-called van der Waals equation. I have suggested that the same equation could be used to describe an economy near its critical state. It represents a surface with a cusp fold as shown on fig. 2.

Figure 2. The state of an economy can be described by a point on the above surface. C is called a critical point, hence the name of self-organized criticality.

As the economy evolves, its representative point circles around the critical point C, moving from a depression phase to an expansion phase, then a stagflation phase, a process which reminds Schumpeter’s image of a gale. With the election of Trump as president, the American economy seems to be now entering a crisis phase.

Fig. 2 shows that during this phase two economies co-exist in the same country in the same way as two phases, such as liquid and gas, co-exist in the same fluid during an abrupt phase transition. At any time, production can drop from the upper level, where the old fuel-based economy collapses, down to the lower level where a new economy, hopefully based on renewable energy, starts over.
This scheme compares well with the «metamorphosis model» developed by the German economist Gerhard Mensch during the seventies (9). This model is shown on fig. 3 reprinted from his book. Today, Mensch’s metamorphosis model is widely used among Schumpeterian economists. It has even been used by historians such as Giovanni Arrighi (10).

Figure 3. Mensch’s metamorphosis model. Between arrows a and b, successive economies overlap as in fig. 2.

The French sociologist Emmanuel Todd has shown that political opinions can be classified along two criteria: authoritarism and egalitarianism (11). It gives rise to four types of political opinions as described below, with their radical form in parenthesis:

Figure 4. A classification of political opinions

As the state of economy circles around its critical point, political ideology tends to do the same thing, varying from far left to far right, the two ends being only separated by an abrupt phase transition. Although it applies to an economy free for any external perturbation, it is likely to be true for an hegemonic country such as the United States. With the election of Trump, the U.S. are probably entering into their extreme right phase.

However, as shown by Emmanuel Todd, in most countries family structures impose a preferred ideology. For instance, in the United States of America, the prefered ideology is liberal-inegalitarian. Hence many people tend to stick to that ideology, while other people move toward a more right wing ideology. This brings dissent into the population and explains why the country is entering a crisis phase.

As crises occur, some of the States are likely to split apart. California seems to be already moving toward this direction. As already explained at the beginning of this paper, during an abrupt phase transition, large structures break down or disappear and are replaced by smaller structures. We already see the same phenomenon occuring in Europe with Great Britain’s attempt to leave the European Community.

In fig. 2, I have plotted an annual production V as a function of demand P and supply T. Instead of the annual production V, we could have as well plotted the annual revenue $. For a country, $ is called the gross national product or GNP. Whereas P is the economic analog of a pressure and T the economic analog of a temperature, $ is the economic analog of entropy. Hence, to understand money, one must understand entropy. This is however beyond the scope of this short post. It will be the subject of other posts.

(1) «The Fourth Turning: An American Prophecy», Broadway (1997).
(2) Post 72 of the French side of this Web site: «Les quatre saisons de l’économie» (Dec. 2014).
(3) Post 101 of the French side of this Web site: «Sur l’évolution des idées politiques» (Nov. 2016).
(4) «Secular cycles», Princeton (2009).
(5) «The Thermodynamics of Evolution», Free English version available on this web site.
(6) «How Nature Works», Springer (1996).
(7) «The Self-organizing Universe», Pergamon (1980).
(8) Res-Systemica (in French), Vol. 14, Oct. 2015.
(9) Stalemate in Technology, Ballinger, English ed. (1979).
(10) The Long Twentieth Century, Verso (1994, 2010).
(11) The Explanation of Ideology: Family Structure and Social Systems (1985).