May 29 2011

Gaus’ Declining Anxiety Wave Points to the 2015 Economic Boom

1960s-style economic booms appear to be the triggers of great explorations from Lewis and Clark to Apollo, as well as the largest macro-engineering projects from the Suez Canal to Apollo.

That’s the extraordinary lesson of the last 200+ years.

However, Helmut Gaus asks if our prosperity is fundamentally more a matter of human psychology than just economics?
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Gaus, a professor of political science at the University of Ghent in Belgium, has spent decades documenting an “Anxiety Wave,” which is the inverse of the better known long economic wave. According to Gaus (Why Yesterday Tells of Tomorrow, 2003)

If we scan two centuries of European history … a certain number of cultural-historical and mental changes show the same cyclic course as Kondratiev’s (economic) long wave. Not all of them can be as easily followed back to fluctuations in the market … On the face of it, these currents indicate an increase and decrease in the level of anxiety in society, with peaks and low points that correspond with the peaks and lows of Kondratiev’s long wave.

If Gaus is correct, the Maslow Window expected near 2015 (plus all those of the last 200+ years) is caused directly by the mass psychology of an “ascending phase” of the long economic wave.

In a descending long wave, in a period of increasing uncertainty and existential anxiety, the keynote of the state of mind of a whole population is different from that in an ascending phase of the same long wave, in which self-assurance and self-confidence and all other states of mind that are typical of this begin to get the upper hand.

Gaus bases his Anxiety Wave on “the best documented mass phenomenon that appears to be the subtlest indicator of the collective unconscious in our Western world”: women’s fashion. For example, Gaus has identified a yellow/orange fashion metric that’s apparently indicative of a positive mind set, as indicated in Figure 2. Notice that the index ascends during the 1960s Apollo Maslow Window until about 1968, when it begins a steep descent until the mid-1970s. Its decline continues more gently into the 1990s.

Fig. 2. According to Gaus, from 1956 to 2000 the bright color scheme (of yellow/orange) in women’s fashions indicates a “happiness wave” consistent with long waves in the economy
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If it is real, we’d expect that Gaus’ fashion-based Anxiety Wave — the inverse of the “happiness wave” shown above in Fig. 2 — would correlate well with unemployment; and it does, see Fig. 3. Notice how anxiety and unemployment decline during the 1960s Maslow Window until about 1968, and then begin a steady rise until the mid-1980s.

Fig. 3. Unemployment in Germany from 1956 to 2000 correlates well with Gaus’ fashion-based Anxiety Wave.
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Although the number of marriages (in the Netherlands) is inversely correlated with the Anxiety Wave, the mean age of the mother at the birth of her first child (in Germany) from 1956 to 2000 is directly correlated. As anxiety drops during the 1960s Maslow Window so does the mean age until about 1970 when both reverse and begin an upward trend.

Fig. 4. The mean age of a mother at the birth of her first child (in Germany) declined until 1968 and increased thereafter.
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Even astrology correlates with Gaus’ Anxiety Wave. The end of the 1960s Maslow Window near 1968 triggers a steep increase in the number of books on astrology in German and British libraries, which levels off in the mid-1980s.

Fig. 5. Apparently astrology comforted an increasing number of people (in Germany and the UK) after the 1960s Maslow Window ended near 1968.
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Because human anxiety is very difficult to measure, especially on a mass basis, Gaus’ data does not prove that an Anxiety Wave exists or that it drives the long economic wave (e.g. Kondratiev Wave). However, it does provide intriguing evidence of rhythmic, twice-per-century fluctuations of significant non-economic parameters in society, that correlates well with long-term economic trends.

Dimitri Maex at DoubleThink.com suggests that in addition to fashion, search engines might work too…

The idea that fluctuations in the economy are caused by the collective levels of anxiety is interesting but hard to prove. Data on the mental state of society is scarce, which is why Gaus used data on fashion as a proxy. There is however a relatively new data source that holds exteremely rich informatoion on what’s on people’s minds – it’s the data held by search engines. Knowing what people search on and how that changes over time could potentially lead to a barometer of society’s mental state.

Gaus boldly ends his book with 20 future behavioral trends, including the major economic boom of 2015 that is expected to trigger the next 1960s-style Maslow Window and the new international Space Age.

If the rhythm of rising and falling of the long wave in the coming decades is the same as in the past two centuries, we can expect the bottom of the anxiety curve, and thus the peak of the economic boom, around 2015 – 2020…

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