The Socionomist A monthly publication designed to help readers understand and prepare for major changes in social mood Dem

October 2011

1 In the midst of growing negative mood, ocr democracy faces threats from within 5 Scientist who challenged textbook orthodoxy receives Nobel Prize 8 Monumental shifts are occurring in everything from trade alliances to acy gender lines Under Attack

PO Box 1618 • Gainesville, GA 30503 USA A publication of the Socionomics Institute 770-536-0309 • 800-336-1618 • FAX 770-536-2514 www.socionomics.net © 2011 SOCIONOMICS INSTITUTE Democracy Under Attack The Socionomic Nolan Chart Helps Us Map Current Events By Alan Hall

[Editor’s note: In the West, few institutions are as revered as democracy. Yet socionom- ics holds that social mood pushes around even society’s most sacred norms. Where

will politics end up after a historic bear Courtesy abcnews.go.com market? As Hall shows with his break- through “Socionomic Nolan Chart,” the only certainty is an increasingly fragmented process.]

Expressions of the large-degree negative A protester on Wall Street displays his predisposition. social mood trend now seem to be accelerating A Growing Appetite: and putting aspects of our Socionomic Nolan Chart (Figure 1) into motion. (For a review of the chart, tions, boycotts and strikes in New York, London, Spain, see our April 2010 issue). So forceful is the mood shift Greece, India and Israel: “wariness, even contempt, to- that even democracy itself, an idealized form of govern- ward traditional politicians and the democratic political ment during the Grand Supercycle uptrend from 1784, is process they preside over”4 (emphasis added). now coming under more-widespread attack from within “We’re the first generation to say that voting is democracies. It is still early in this process. One should worthless,” said a young Spanish woman. A young In- not assume that democracy, or at least its current form, dian woman said, “We elect the people’s representatives will survive the expected Grand Supercycle downtrend so they can solve our problems, [but] that is not actually in social mood. happening. Corruption is ruling our country.” A young In the United States, Peter Orzsag, the former direc- Israeli man said, “the political system has abandoned tor of President Obama’s Office of Management and its citizens.” Budget, wrote an article, “Too Much of a Good Thing: One woman, who told USA Today she walked 200 Why We Need Less Democracy.” Orszag said U.S. miles to protest in Washington, said, “We are the 99 “political polarization was growing worse – harming percent. We don’t have a government that represents Washington’s ability to do the basic, necessary work us. That is the message.”5 of governing.” Beverly Purdue, the governor of North Sociologists flounder when they try to explain Carolina, called for suspending elections for two years why the world’s young adults are suddenly taking to so that Congress can “get over the partisan bickering the streets: 1 and focus on fixing things.” You’re looking at a generation of 20- and 30-year- Russia is about to re-elect Vladimir Putin in a olds who are used to self-organizing. They believe 2 “mockery of democracy,” says the Economist, while life can be more participatory, more decentralized, The Washington Post laments, “Russia, once almost a less dependent on the traditional models of organi- 3 democracy.” zation … .4 Citizens, too, are increasingly questioning whether representational democracy works. “‘Voting is worth- This generation is not inherently different. Like the less’? Global protests share contempt for democracy,” previous generation, it comprises Homo sapiens, and reads a September 28, MSNBC headline. The article they have the same brains as their predecessors. Rather, cites a common theme in the recent street demonstra- the protestors are reflecting a new social mood trend.

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The Socionomics Institute • www.socionomics.net P.O. Box 1618 • Gainesville, GA 30503 USA • 770-536-0309 • 800-336-1618 • FAX 770-536-2514 The Socionomist—October 2011

Originally published in the April 2010 Issue of The Socionomist

Figure 1

You Are Here: Western society’s ideological decentralization process appears to be somewhere between stages 2 and 3.

A recent blog post at FifthWaveFinancialAnalysis. All the Same Frustration com captures Occupy Wall Street’s true impetus: Right-wing media, including political commentator People think these protestors are being rational. They Sean Hannity, have castigated the primarily left-wing aren’t; they are just finding something to protest Occupy Wall Street protesters, portraying them as because of the predominately negative social mood. disorganized “mobs” engaged in “class warfare.” But If the trend were up, all the inequity on Wall Street as humorist Jon Stewart pointed out on his October 5 7 would be like water off a duck’s back. Indeed that show, the protests have much in common with the Tea was the case up until the May 2 top.6 Party protests of 2009-2010 despite coming from the

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opposite side of the political divide. Stewart showed a forms, and evidence of it will be visible in all types clip of Hannity saying, of social organizations. Political manifestations will The average American taxpayer knows that at the end include protectionism in trade matters, a polarized of the day they are going to be on the hook for the and vocal electorate, separatist movements, xeno- trillions and trillions of dollars that we are using to phobia, citizen-government clashes, the dissolution bail out these companies, some of whom have been of old alliances and parties, and the emergence of irresponsible. And they are expressing their frustra- radical new ones.8 tion, which I think is quintessentially American. Figure 2 approximates the positions of the Tea Party Stewart applauded, but then revealed that Hannity was and Occupy Wall Street movements in the context of our speaking of the Tea Party protestors in 2009. Socionomic Nolan Chart. In fractal fashion, the groups that have calved from the center will themselves tend Internal Fragmentation to divide. Diverse groups increasingly display polarization. In September 2011, Ben Smith wrote on Politico. For example, on October 18, Reuters reported “Fissures com, “Sarah Palin’s address to a Tea Party Express rally at the Federal Reserve over the correct course of future … appeared to focus on worries that the movement is monetary policy.” The New York Times headlined a rift divided and flagging.” Palin warned against “internal that has widened “in the last decade” within the tight- quarrels,” yet modeled polarization by attacking fellow knit Amish society: “Amish Renegades Are Accused in Republican Rick Perry for “crony capitalism.”9 Bizarre Attacks on Their Peers.” The renegades assaulted Similarly, Occupy Wall Street, which has yet to other Amish and cut off their beards, an important mas- coalesce into a definable group, already shows internal culine symbol. The fear is so great that some Amish are division. Recently at an Atlanta rally, the group could unusually cooperating with law enforcement. not agree whether to let civil rights hero John Lewis speak.10 A Chicago Sun Times article suggests the movement has plenty of bulls’-eyes to divide its atten- tion: “Now perhaps it’s time for another target: Occupy Congress.”11

MSNBC reports regarding Occupy Wall Street: It’s messy. It’s disorganized. At times, the message is all but incoherent. All of which makes Occupy Wall Street, the loosely organized protest in lower Man- hattan … a lot like the rest of the current American political discourse.12

ABC News also described the protests’ lack of defini- tion: Figure 2 These protesters have adopted that same decentral- ized structure. … One of the beautiful things about A Changing Landscape: We expect to update the Socionomic Nolan Chart in the future to track the emergence of new groups [Occupy Wall Street] is that it is a movement defining 13 in the U.S. and perhaps in other countries. itself as it ‘becomes.’

The September 2001 issue of The Elliott Wave Though Occupy Wall Street’s objectives are vague, Theorist said, the protests themselves are gaining steam. Representa- 13 The coming trend of negative social psychology will tives from 15 of the largest U.S. labor unions and the be characterized primarily by polarization between Industrial Workers of the World have announced support 14 and among various perceived groups. … Such a for the movement, and copycat protests have spread 15 sentiment change typically brings conflict in many to dozens of cities.

3 The Socionomist—October 2011

Both the Tea Party protests and Occupy Wall Street As Prechter explained later in The Wave Principle have different particulars and timing, but they spring of Human Social Behavior (1999), advancing waves of from the same source—the negative social mood trend. social mood “tend to lead to political freedom, while Both movements emerged early in the downtrend. They retrenchments tend to lead to political repression.”18 should pick up in frequency, intensity and internal frag- Under a September 2011 headline, “The compass fails,” mentation as mood continues to decline. The Economist noted, Freedom House, a New York-based body that moni- Not Just Democracy tors a range of political and civil rights, reported that The Elliott Wave model suggests that social mood 2010 saw a net decline in liberty across the world for is always in flux. There is never a static norm. Change the fifth year in a row, the longest continual decline in is the norm. The April 2010 issue of The Socionomist four decades of record-keeping. … Western govern- pointed out that many presumed social norms face chal- ments have become shy about spreading the idea that lenges during negative mood phases. More and more certain human rights, enshrined in United Nations headlines unknowingly conjure up the Socionomic conventions, are universal.19 Nolan progression. Google Trends shows that news Five years of decline in liberty seems small on a references to “new normal” have increased markedly chart showing two centuries of rising democracy, yet since 2007. For example, the October 4 Guardian it is “the longest continual decline in four decades.” headlined, “Financial crisis has world teetering on the Governments across the world are stepping up authori- brink—welcome to the new normal”: tarian repression—becoming less democratic—even as Will the euro survive? Will there be a second bank- their citizens begin to distrust democracy. As we have ing meltdown? Is the world facing a decade or two documented and predicted in previous issues (see The of sluggish growth to match the Great Depression Socionomist, September 2011, for examples), society of 1873-1896, as some historians believe? Nobody is both rebelling against and submitting to the wide really knows. Which is why the new normal is not variety of new regulations, bans, security requirements really normal at all.16 and privacy intrusions. Declining social mood is propelling societies As The Elliott Wave Theorist has observed, most through the stages of the Socionomic Nolan progression; people equate downtrends with uncertainty, as this old concepts of “normal” are dissolving. Out of this so- writer does. But “nobody really knows” applies equally cial chaos, eventually, new norms will emerge. Whether to uptrends. “Nobody really knows” is the normal state, and where democracy prevails remains to be seen. not an abnormality.

Final Words on Democracy Socionomists have long anticipated that declining social mood would precipitate a decline in the number of democracies. Figure 3 updates the original chart from the June 1992 issue of The Elliott Wave Theorist, which made these observations: The numbers [Francis Fukuyama] presents showing the rise of liberal democracy merely track the trend of the stock market, i.e., of positive social mood, from its Grand Supercycle degree low in 1784 to its cur- rent all-time high. In fact, the two ‘corrections’ of the trend roughly coincided with bear phases in stocks. … As the worldwide decline in fortunes takes hold, the number of liberal democracies will shrink.17

Figure 3

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CITATIONS 1 Wolf, Z.B. (2011, September 28). Too much democracy? 10Occupy Atlanta silences civil rights hero John Lewis! A modest proposal from N.C. Gov Bev Perdue. ABC YouTube, Retrieved from http://www.youtube.com/ News, Retrieved from http://abcnews.go.com/blogs/ watch?v=3QZlp3eGMNI. politics/2011/09/too-much-democracy-a-modest-proposal- 11Savage, T. (2011, October 9). It’s time for Occupy Wall Street to from-n-c-gov-bev-perdue/. set sights on Congress. Chicago Sun-Times, Retrieved from 2 Russia’s humiliator-in-chief (2011, September 26). The http://www.suntimes.com/business/savage/8109383-452/its- Economist, Retrieved from http://www.economist.com/ time-for-occupy-wall-street-to-set-sights-on-congress.html. blogs/easternapproaches/2011/09/return-putin. 12Schoen, J.W. (2011, September 27). Familiar refrain: Wall 3 Lally, K., & Englund, W. (2011, August 18). Russia, once almost Street protest lacks leaders, clear message. MSNBC. a democracy. The Washington Post, Retrieved from http:// com, Retrieved from http://bottomline.msnbc.msn.com/_ www.washingtonpost.com/world/russia-once-almost-a- news/2011/09/26/7978532-familiar-refrain-wall-street- democracy/2011/08/12/gIQAMriNOJ_story.html. protest-lacks-leaders-clear-message. 4 Kulish, N. (2011, September 28). ‘Voting is worthless’? Global 13Krieg, G.J. (2011, October 5). Occupy Wall Street protests: protests share contempt for democracy. MSNBC.com, Police make numerous arrests. ABC News, Retrieved from Retrieved from http://www.msnbc.msn.com/id/44697094/ns/ http://abcnews.go.com/US/labor-unions-join-occupy-wall- world_news-the_new_york_times/#.To8bwhxj3vl. street-york-rally/story?id=14673346. 5 Leger, D.L. (2011, October 7). Protesting ‘occupiers’ spread 14Pangburn, D.J. (2011, October 3). Wobblies announce solidarity message beyond Wall Street. USA Today, Retrieved from with Occupy Wall Street. Death and Taxes, Retrieved from http://www.usatoday.com/news/nation/story/2011-10-06/ http://www.deathandtaxesmag.com/147515/wobblies- dc-wall-street-protest/50683204/1?csp=34news&ut announce-solidarity-with-occupy-wall-street/. m_source=feedburner&utm_medium=feed&utm_campaig 15Map: Occupy Wall Street spreads nationwide—and beyond n=Feed%3A+UsatodaycomNation-TopStories+%28News+- (2011, October 4). Mother Jones, Retrieved from http:// +Nation+-+Top+Stories%29. motherjones.com/politics/2011/10/occupy-wall-street- 6 State of the markets (2011, October 7). Fifth Wave Financial protest-map. Analysis, Retrieved from http://fifthwavefinancialanalysis. 16Elliott, L. (2011, October 4). Financial crisis has world teetering blogspot.com/. on the brink — welcome to the new normal. The Guardian, 7 Parks and demonstration. The Daily Show With Jon Stewart, Retrieved from http://www.guardian.co.uk/business/2011/ Retrieved from http://www.hulu.com/watch/286307/the- oct/04/financial-crisis-welcome-to-new-normal. daily-show-with-jon-stewart-parks-and-demonstration. 17Prechter, R. (1992, June). Sentiment/investor psychology. The 8 Prechter, R. (2001, September). Forecasting the tenor of social Elliott Wave Theorist. events. The Elliott Wave Theorist. 18Prechter, R. (1999). The Wave Principle of Human Social 9 Smith, B. (2011, September 5). Palin warns tea party against Behavior. Gainesville, Georgia: New Classics Library. division. Politico, Retrieved from http://www.politico.com/ 19Ababa, A. (2011, September 17). The compass fails. The blogs/bensmith/0911/Palin_warns_Tea_Party_against_ Economist, Retrieved from http://www.economist.com/ division.html. node/21529019.

Shechtman Scaled Walls of Skepticism En Route to Nobel Prize By Andrea Dibben

In early 1982, the head of the laboratory where And, he asked me to leave the group; so, I left. He Daniel Shechtman worked came to his desk “smiling was a good friend of mine.’1 sheepishly.” Shechtman recalls what happened next: He put a [crystallography] book on my desk and What had this Israeli scientist done to deserve the said, ‘Danny, why don’t you read this and see that it disdain of his colleagues? He had discovered quasiperi- is impossible what you are saying.’ And I said, ‘You odic crystals on April 8, 1982.2 know, I teach this book. I don’t need to read it. I Shechtman later described them as “fascinating know it’s impossible, but here it is. This is something mosaics of the Arabic world reproduced at the level 3 new!’ That person expelled me … . He said, ‘You are of atoms.” Quasiperiodic crystals are regular; yet, a disgrace to our group. I cannot bear this disgrace.’ they form non-repeating patterns that usually appear

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5 The Socionomist—October 2011

in aluminum alloys. X-rays first revealed the internal went so far as to say, “Danny Shechtman is talking structure of crystals in 1912; and from that time forward, nonsense. There is no such thing as quasicrystals, only scientists concluded that all crystals possessed rotational quasi-scientists.”4 symmetry and a periodic structure. This consensus held But new science breaks old paradigms. This Oc- for more than 70 years.4 The accepted rule was that there tober, 29 years after Shechtman’s discovery, the Royal were only five possible rotational symmetries: single, Swedish Academy of Sciences awarded him the Nobel double, triangular, quadruple and hexagonal. Forms Prize in Chemistry for 2011. that were not regular and periodic (for example, the Robert Prechter featured Shechtman’s research in pentagonal form Shechtman identified) were deemed The Wave Principle of Human Social Behavior (1999), impossible. when he wrote about how these newly identified objects are based on the Golden Ratio: [Daniel Shechtman] discovered a type of crystal that contains spiral arrangements and is governed by Fi- bonacci mathematics. Initially believed impossible, the quasi-crystal has been verified by photographs made with an electron microscope. The quasi-crystal exhibits ‘five-fold symmetry,’ which means that a single rotation of the crystal exposed to an X-ray produces a symmetrical scattering pattern five times (p. 428).6

This characteristic of fiveness is found in the Wave Principle along with fractality, a relationship to the Fi- bonacci sequence of numbers, and robust self-similarity. Courtesy Saudiaramcoworld.com

Art Imitates Science: The decagonal pattern on the 17th century lodging complex of Nadir Divan Beg in Uzbekistan is one example of how the mathematical pattern of crystals discovered by Shechtman had been used in architecture for centuries.

When Shechtman first observed the five-fold sym- metry, he thought it must be “twinning”—period crystals fusing at an angle. Yet, when he looked for twins and twin boundaries, they were not there.1 “If you look at historical materials, people probably had found quasi- crystals before,” notes fellow chemist Patricia Thiel. “But they didn’t have the tools or the gumption to say 5 what they were seeing. Danny had both.” “There Can Be No Such Creature”: Those were Two years after Shechtman discovered quasicrys- the words Daniel Shechtman initially wrote when tals, he finally succeeded in getting a paper published, he first saw a quasicrystal like the one in this but only after it was co-authored with Ilan Blech, a electron microscope photo. colleague at Technion; John Cahn, a senior scientist; and French crystallographer Denis Gratias. And, similar characteristics were discovered in a 1993 The math behind Shechtman’s discovery dated from study of DLA clusters by Alain Arneodo and four other antiquity. Medieval Islamic artists used it in tile mosaics. scientists from the Centre de Recherche Paul Pascal and But instead of curiosity about a potential breakthrough, the École Normale Supérieure in France. In their con- the scientific community—often lauded for constantly cluding proposal, the researchers wrote the following: questioning and innovating—effectively dismissed The intimate relationship between regular pentagons this new class of solid matter. Another Nobel laureate and Fibonacci numbers and the golden mean…has

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been well known for a long time. …The recent dis- in a real atom. It produced a diffraction pattern in the covery of ‘quasi-crystals’ in solid state physics is a middle of the two accepted outcomes. spectacular manifestation of this relationship. This Prechter discussed the mathematical similarities of new organization of atoms in solids, intermediate Penrose tiles to the Elliott wave model of social-mood between perfect order and disorder, generalizes to the change: crystalline ‘forbidden’ symmetries, the properties of It turns out that both the areas of the tiles and there- incommensurate structures. Similarly, there is room fore the numbers of the tiles in any given (large) area, for ‘quasi-fractals’ between the well-ordered fractal are in Fibonacci proportion, the same proportion that hierarchy of snowflakes and the disordered structure governs both the numbers and sizes of motive vs. cor- of chaotic or random aggregates (pp. 68-69).7 rective Elliott waves. … Penrose’s tiles support the applicability of the Fibonacci sequence to processes The study, like others, shows a greater level of order of structured yet infinitely variable partitioning and in apparently random processes than was previously its inverse, structured yet infinitely variablebuilding expected. Prechter was interested in this new research (p. 432).6 because the Wave Principle proposes the same conclu- sion in relation to human social behavior. Shechtman’s story brings to mind the walls of skepticism other innovators have faced. Daniel Kahne- man, who along with Vernon Smith was a pioneer of behavioral economics, recalls how some of his work was received: “We were also accused of spreading a tendentious and misleading message that exaggerated the flaws of human cognition.”8 Prechter, however, recognized the seminal impor- tance of a market simulation that Smith conducted: While these experiments were conducted as if par- ticipants could actually possess true knowledge of coming events and so-called fundamental value, no such knowledge is available in the real world. The fact that participants create a boom-bust pattern anyway is overwhelming evidence of the power of the herding Courtesy pbs.org impulse (pp. 153-154).6 Patching Holes: Although the pentagons in this quasicrystal can’t fit together as squares and triangles do, other atomic shapes fill the gaps. Three years later, Smith and Kahneman were awarded a Nobel Memorial Prize in Economic Sci- ences. Another important aspect of quasicrystals involves History offers many instances of individuals who their mosaics, which are known as Penrose tiling. Pre- challenged conventional beliefs, and in turn were labeled viously, the consensus view was that all solid matter heretics, ostracized, ridiculed and more often just plain reflected only two patterns: completely random (glass) ignored. This hostile response is not a thing of the distant or perfectly ordered (periodic). Penrose tiling falls in past, but an ever-present deterrent to innovation. We ap- between. In 1984, physicist Paul Steinhardt and graduate plaud Daniel Shechtman for his discovery, and for the student Don Levine used computer-generated images to courage to challenge textbook orthodoxy in establishing see what diffraction pattern Penrose tiling would reflect a new perspective.

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citations 1 Interview with Technion Distinguished Professor Dan 5Marder, J. (2011, October 5). What are quasicrystals, and what Shechtman. Science & Technology, YouTube, Retrieved makes them Nobel-worthy? PBS Newshour, Retrieved from http://www.youtube.com/watch?v=EZRTzOMHQ4s. from http://www.pbs.org/newshour/rundown/2011/10/ 2 Chang, K. (2011, October 5). Israeli scientist wins Nobel Prize quasicrystals-win-chemistry-nobel.html. for chemistry. The New York Times, Retrieved from http:// 6Prechter, R. (1999). The Wave Principle of Human Social www.nytimes.com/2011/10/06/science/06nobel.html?_ Behavior. Gainesville, Georgia: New Classics Library. r=2&scp=1&sq=shechtman&st=cse. 7Arneodo, A., et al. (1993). Fibonacci sequences in diffusion- 3 Nobel Prize in chemistry laureate Professor Dan Shechtman— limited aggregation. Growth Patterns in Physical Sciences Jerusalem (2011, October 9). Demotix, retrieved from http:// and Biology. www.demotix.com/news/865022/nobel-prize-chemistry- 8Autobiography of Daniel Kahneman. Nobelprize.org, Retrieved laureate-prof-dan-shechtman-jerusalem. from http://www.nobelprize.org/nobel_prizes/economics/ 4 Shtull-Trauring, A. (2011, January 4). Clear as crystal. Haaretz. laureates/2002/kahneman-autobio.html. com, Retrieved from http://www.haaretz.com/weekend/ magazine/clear-as-crystal-1.353504.

MANIFESTATIONS OF A DECLINING SOCIAL MOOD: OCTOBER 2011 A Pattern of Monumental Shifts Markets are moving together to a record degree as trade wars loom. Meanwhile, the fashion world is em- bracing androgyny.

THE ECONOMY September, the correlation coefficient was 0.84, which Measurement Points to All the Same Market broke the record of 0.83 set on October 19, 1987—com- In 2004, Robert Prechter and Pete Kendall wrote monly known as “Black Monday,” when the Dow Jones an article for Barron’s in which they argued that all Industrial Average “erased $500 billion of its value in investment markets had begun moving together rather the index’s largest single-day percentage drop ever.” than contra-cyclically as they had in the past. “All the Alden also cited MIT professor Andrew Lo, who stated, same market?” they wrote. “In rare alignment, stocks “It’s not just stocks. It’s actually all asset classes. The and junk bonds have rallied with real estate, foreign U.S. dollar relative to other currencies, gold, oil and currencies, gold, silver and commodities. … Liquid- hedge fund returns have now all become very highly ity is everything now, and it is driving the prices of all correlated.”2 investment classes. These markets have been going up In the June 2006 Theorist, Prechter said that in 2004, together, and we think that when liquidity contracts, people dismissed the concept of “all the same market” they will go down together.”1 as crazy, since markets would have to be crazy to move Last month, an article in The Huffington Post all together. His response: observed that “[m]ore than ever on record, individual … markets are crazy, and predicting such events stocks in the Standard & Poor’s 500 Index are moving requires understanding that markets are impulsive and patterned, not rational, and that they go through “It’s not just stocks. It’s actually all asset similar expressions of the same cycle of psychology classes. The U.S. dollar relative to other over and over. The extent and duration vary, but the essence is always the same. The flip side of markets currencies, gold, oil and hedge fund re- going up together is that when the reversal comes turns have now all become very highly they all go down together.1 correlated.” Prechter featured an update on “All the Same Mar- in unision.” The article’s author, William Alden, pointed ket” in the September 2011 issue of the Theorist, in to a measurement known as the correlation coefficient, which he also noted a correlation between commodities in which a reading of 1 means that stocks are moving and stocks. “Despite the clear positive correlation among in perfect tandem with an index. Alden said that in most financial markets, bears on the economy and the

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8 The Socionomist—October 2011 monetary outlook still advocate owning commodities,” In the November 1992 issue of The Elliott Wave he wrote. “But commodities will not save investors’ Theorist, Robert Prechter noted that depressions make portfolios. If stocks are going to fall, then commodities trade wars “as inevitable as they are suicidal. … Depres- will go down, too.”3 sions force regions of allegiance to contract, and trade As it happens, in 2011 the Dow Jones Industrial war is one of the typical results.”8 Average and the CRB Commodity Index made daily closing and intraday highs for their two-year rallies on CULTURE exactly the same days: April 29 and May 2. By Gary Grimes, Guest Contributor

TRADE Social Mood Continues to Bend Gender Lines Alliances Cracking as Mood Declines Robert Prechter’s groundbreaking socionomics Protectionism has appeared this year in the form of report “Popular Culture and the Stock Market” noted threats by multiple nations against one another. China that “men are more ‘masculine’ during bull markets, and is at the center of many of the disputes. women more ‘feminine.’”9 But in bear markets, those sexual stereotypes fall from favor and society embraces • In June, China threatened an outright trade war with a greater variety of gender roles and identities. the European Union if the EU moves ahead with Gender-bending seems more prevalent today than plans to include foreign airlines in its emissions in recent decades, and the signs of social mood’s impact limits.4 (In September, the International Air Trans- on the perception of sexuality are mounting. port Association, which represents more than 230 airlines, pressed the EU to postpone the emissions • Chaz Bono, currently a trans-gendered man and legislation until the airline industry has emerged originally Chastity Bono, the daughter of famous from its downturn.5) television pair Sonny and Cher, was recently the • Solar energy has become a point of conflict between star of the primetime TV series “Dancing With the China and the U.S., where lawmakers and union Stars.” leaders are asking the Obama administration to file • Today’s hottest model, gracing magazine covers unfair-trade complaints against China because of around the world wearing everything from four- the way it subsidizes clean-energy companies. The inch heels to designer wedding gowns, is actually request comes following the collapse of the U.S. a 20-year-old man who is self-described as “gen- solar company Solyndra LLC, which went dark derless.” Female fashion models command higher despite $535 million in loan guarantees from the U.S. Energy Department. Last year, China gave $30 billion in credit to its largest solar manufacturers— about 20 times the amount that manufacturers in the U.S. received. Thomas Conway, international vice president of the United Steelworkers, said the U.S. “should not sit back and say we are afraid to start a trade war.” He added, “We are in a trade war, and 6

we are losing.” Courtesy dailymail.co.uk • Poultry tariffs have become another bone of conten- tion between China and the U.S. On September 20, the U.S. accused China of violating international trade rules when it imposed tariffs—ranging from 50 to 100 percent—on U.S. chicken exports. China imposed the tariffs last September on Tyson Foods, Pilgrim’s Pride, Keystone Foods and many smaller Switched Looks: Chaz Bono, daughter of Sonny and Cher. Andrej companies. The World Trade Organization says Pejic, gender-free fashion model. resolving the dispute may take up to 24 months.7

9 The Socionomist—October 2011

earnings than males; Andrej Pejic’s “glam androgy- indeterminate. The country is following the lead of nous look” can command a paycheck as either.10 the U.S. and Britain, which both adopted similar • 15 U.S. states plus D.C. have laws specifically measures in recent years. prohibiting discrimination on the basis of gender As the current bear market mood blurs the very identity or expression. A number of others are cur- definitions of gender, expect modification and a variety rently considering similar measures.11 of identities to become increasingly prevalent in society, • Australia recently decided to provide three gender art and public policy. choices on passport applications: male, female and

FURTHER READING 7 1Prechter, R., & Kendall, P. (2004, May 17). In synch to sink: Rugaber, C.S. (2011, September 20). US files complaint against Liquidity matters: A contrarian view on inflation’s prospects. Chinese chicken tariffs. The Miami Herald, Retrieved from Barron’s, p. 44. http://www.miamiherald.com/2011/09/20/2416298/us-files- 2Alden, W. (2011, September 24). Stock correlation reaches complaint-against-chinese.html. 8 record as traders fear grim economy. The Huffington Post, Prechter, R. (1992, November). Cultural trends: protectionism. Retrieved from http://www.huffingtonpost.com/2011/08/24/ The Elliott Wave Theorist. 9 stocks-correlation-sp500_n_935539.html. Prechter, R. (1985, August). Popular culture and the stock 3Prechter, R. (2011, September). Still all the same market. The market. The Elliott Wave Theorist, Retrieved from http:// Elliott Wave Theorist. www.socionomics.net/PDF/popular_culture.pdf. 10 4Milmo, D., & Harvey, F. (2011, June 6). China threatens Platell, A. (2011, February 25). Fashion’s ultimate insult to trade war over EU emissions trading scheme. The women: The latest way of demeaning real women is a male Guardian, Retrieved from http://www.guardian.co.uk/ model dressed as a girl. The Daily Mail, Retrieved from environment/2011/jun/06/china-trade-war-emissions-trading- http://www.dailymail.co.uk/femail/article-1360460/Andrej- airlines. Pejic-Fashions-ultimate-insult-women-man-dresses-woman. 5So, C. (2011, September 21). Airlines seek to delay emissions html. 11 trading scheme. South China Morning Post, Retrieved from Non-discrimination laws that include gender identity and http://topics.scmp.com/news/china-business-watch/article/ expression, Transgender Law and Policy Institute, http:// Airlines-seek-to--delay-emissions--trading-scheme. www.transgenderlaw.org/nd/laws/index.htm. See also 6McQuillen, W. (2011, September 23). Blame-China chorus Edwards, D. (2011, July 6). Connecticut governor signs law grows as Solyndra falls amid imports. Bloomberg, Retrieved protecting transgender people. The Raw Story, Retrieved from http://www.bloomberg.com/news/2011-09-23/blame- from http://www.rawstory.com/rs/2011/07/06/connecticut- china-chorus-grows-as-solyndra-fails-amid-cheap-imports. governor-signs-law-protecting-transgender-people/. html.

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The Socionomist helps readers understand socionomics and prepare for major changes in social mood. We also present the latest essays in the field of socionomics; we anticipate that many of the hypotheses will be subjected to scientific testing in future scholarly studies. The Socionomist is published by the Socionomics Institute, Robert R. Prechter, Jr., president. Alan Hall, Ben Hall, Matt Lampert and Euan Wilson contribute to The Socionomist. Chuck Thompson, editor. Mark Almand, executive editor. We are always interested in guest submissions. Please email manuscripts and proposals to Chuck Thompson via [email protected]. Mailing address: P.O. Box 1618, Gainesville, Georgia, 30503, U.S.A. Phone: 770-536-0309. All contents copyright © 2011 Socionomics Institute. All rights reserved. Feel free to quote, cite or review, giving full credit. Typos and other such errors may be corrected after initial posting. For subscription matters, contact Customer Service: Call 770-536-0309 (internationally) or 800-336-1618 (within the U.S.). Or email [email protected]. For our latest offerings: Visit our website, www.socionomics.net, listing BOOKS, DVDs and more. Correspondence is welcome, but volume of mail often precludes a reply. Whether it is a general inquiry, socionomics commentary or a research idea, you can email us at [email protected]. Most economists, historians and sociologists presume that events determine society’s mood. But socionomics hypothesizes the opposite: that social mood determines the character of social events. The events of history—such as investment booms and busts, political events, macroeconomic trends and even peace and war—are the products of a naturally occurring pattern of social-mood fluctuation. Such events, therefore, are not randomly distributed, as is commonly believed, but are in fact probabilistically predictable. Socionomics also posits that the stock market is the best available meter of a society’s aggregate mood, that news is irrelevant to social mood, and that financial and economic decision-making are fundamentally different in that financial decisions are motivated by the herding impulse while economic choices are guided by supply and demand. For more information about socionomic theory, see (1) the text, The Wave Principle of Human Social Behavior © 2011, by Robert Prechter; (2) the introductory documentary History’s Hidden Engine; (3) the video Toward a New Science of Social Prediction, Prechter’s 2004 speech before the London School of Economics in which he presents evidence to support his socionomic hypothesis; and (4) the Socionomics Institute’s website, www.socionomics.net. At no time will the Socionomics Institute make specific recommendations about a course of action for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended.