Discover how Generations predicted the financial crisis
The past few weeks in the financial markets have indeed been a rollercoaster of a ride! The ensuing fall out and chaos is well documented so I’m not going to comment about the crisis, but rather what I’ve found it intriguing, and something that perhaps has been missed is how accurately the crisis was predicted by Generational theorists.
Two key developers of generational theory, Harvard Professors Howe and Strauss predicted the current crisis using their generational research findings back in the early 1990’s. They mapped Anglo-American history as far back as 500 years to the war of the roses and identified a 80 year repeating cycle. These cycles, which they purported, create the generations and run on a two stroke beat of crisis’s and awakenings, each 40 years apart from the other, as illustrated in the graphic below.
The last “awakening” was the hippie revolution and the events that rocked the world in and around 1968. Frighteningly forty years… 2008 is the year their research identified as the next crisis… Many commentators argued that the events of 9/11 and 7/7 were the crisis, and for some time it was thought that Howe and Strauss had got it wrong. The key though is in their definition of a crisis, which is defined as – an event which changes the views held by society to the extent that society’s views and institutions are fundamentally different following the crisis. Using this definition 9/11 as traumatic as it was, was more of a speed bump in society than a crisis. After 9/11 society continued on as before, albeit with a ”little” war “somewhere” in the middle east. The current crisis though does have the potential to radically alter our world. Trust in the financial markets has been shaken, governments have nationalised banks and emerging economies are taking centre stage… The world is indeed changing.
As someone who is passionate about researching societal changes and the implications for businesses, I find all of this fascinating. We are currently developing a new presentation and research study on how the crisis will impact each generation at a point in time when they are all entering major lifestage changes. For example how will the crisis influence the values, attitudes and purchasing behaviours of Baby Boomers in or at retirement? We will soon be in a position to share our insights on the implications of the crisis for each generations. In the meantime if you are interested in learning more or would like to contribute to this discussion on Generations and the impact of the financial crisis please contact me at dean@tomorrowtoday.uk.com or leave a comment on this blog.
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Sorry to be anal but:
The Great Crash which precipitated the Great Depression was October 1929, not 1928.
The fall in Subprime mortgages precipitating the current crisis started before February 2007. According to wikipedia: “The crisis began to affect the financial sector in February 2007, when HSBC, the world’s largest (2008) bank, wrote down its holdings of subprime-related MBS by $10.5 billion, the first major subprime related loss to be reported.”
[Actually it was subprime mortgages themselves being written down, not MBS, (Wikipedia is fallible after all!) but the date is correct].
So, less than 77.5 years really.
Come on, Neil… that’s just not true. You’ve never really ever been sorry to be anal
.
Yes, 1928 should read 1929. Bit of a typo. Will be corrected.
In terms of the generational theory looking at specific events, there are always antecedents. You can trace 9/11 back to the First Gulf War and America’s change of mind about the Taliban. However, 9/11 is the historical “moment” – the “tipping point” – that DEFINES the era.
Thanks for watching us carefully. It’s important to be correct. It’s even more important to be significant. I hope we can be both.
Of course not, but its polite to pretend!
For me the tipping point of 2008 would be Lehmans: 9/15. However maybe for the Great British public it would be Northern Rock 9/14 (2007 again).
BTW, what is the pre-1928 generation called?
Lastly: Harvard, Harvard, Harvard… didn’t they lose $8bn of their endowment to the crunch? Should have listened to their profs predictions!
The pre-1929 generation is the “GI generation”, named for their involvement in the World War I