The Four Phases of History

By Liberteredo

Civilizations do not appear, develop, and vanish randomly in the parade of history. They go through a continuous, and predictable, cycle of development and reinvention. This cycle can be broken into four distinct phases. In each phase, a specific type of individual or group comes to a position of leadership. Each phase, as it reaches its culmination, initiates the succeeding phase by its excesses, and by the hunger of society for something that the current phase cannot provide. The timing of the cycle may vary but it never stops, and it always continues to progress in the same sequence. The cycle is itself the cycle of life, and so it cannot be stopped while life goes on. This is why efforts to preserve the status quo will always be doomed to failure; by opposing the Wheel of Fortune (as the cycle was known in medieval times) a society or an individual will be crushed by its inexorable progress. By understanding it, though, the cycle can be anticipated and used to benefit those aware of its ebb and flow. In either case, the Cycle will continue, as it is not a creation of Man’s, but an immutable pattern implicit in life and Nature.

In the following chapters, examples are presented of each of the four Phases, showing the rise and fall of a typical society as it rises from pastoral stagnation, through empire-building, to innovation, and to financial stability, only to finally return to its original state and begin again. Of course, no society is typical, so in studying real life events the Phases are harder to pick out but they are always there. As will be discussed later, one of the things that makes the cyclic phases harder to discern is the complexity of a society, and the tendency of different areas and levels of a society to move through the phases at different paces. Also, while the Cycle is continuous, it is not always constant; that is, there is no set time for a particular phase to complete, it can take months, years, or centuries. It is the order in which the phases proceed that is significant.

Phase 1: Water: The Mob: Dissolution: The Age of the Farmer

This "first" Phase (of course, in a cycle, any starting point is arbitrary) is often overlooked. Frequently, an assumption is made that history "begins" with the building of empires, but of course there is a necessary time preceding the glorious ages to come, when little seems to be happening and, yet, much is being prepared. Our problem in recognizing this period of history as an important phase in itself is much like the problem a fish has in studying water. At first, water will only be recognized by the fish as "a place where there is nothing to observe". Only once water is discovered to have an existence all its own, and to play a vital role in supporting and sustaining all the more "noteworthy" objects of study, will its presence be appreciated and understood.

Phase 1 is characterized economically by apparent stagnation and lack of order. Governmental structure is not strong or highly centralized. Local warlords, chieftains, or the like hold most of what authority there is. Rulers are principally hereditary, and the family represents a very strong and central part of the life of the individual and the community. People trust and bond with others from their community, but distrust “outsiders”, especially those from urban areas (“city slickers”).

The economy is primarily agrarian, and the best currency that may exist is locally minted (or consists of barter) and may not be exchangeable outside its village. Delivery of services and technology is at a very low level. Infrastructure is stable or even declining, new roads and bridges are not being built. Most people spend most of their time growing or gathering food and supplies, or on related activities.

Religions that develop in this phase tend to be nature-based and often shamanic, as all of life revolves around the crops. Established religions take on these overtones, as well, or are distrusted as “city religions”. People are focused on their day-to-day struggle to survive. The great cycles and spectacle of Nature are close to home, and the awesome power of “Nature and Nature's God” is everywhere apparent to them, and eclipses their own power and government's. Religion is a very powerful force in the daily lives of individuals, and religious leaders may hold more power than government officials; or the two may be essentially synonymous.

Institutional political power is very decentralized. The nature of Water is that while it will flow easily, it will not rise above its own level. So this Age is the ultimate “level playing field”, which is sometimes a brutal reality, especially for those who do not play so well. Family ties serve as the “social safety net”, for there is not institutional welfare in any organized form. The Age of Water does not lend itself to the building of structure.

This phase corresponds to the lowest position on the medieval Wheel of Fortune, with the Ruler crushed beneath the wheel. It also corresponds to the element Water, without form and always seeking its lowest level. Note that Water has the ability to combine in it things that would normally stay separate - known as dissolution. This is the phase where structure has collapsed and becomes fluid, changing, flowing, and quietly combining in new ways not possible in other phases. So this is a phase where little power seems to exist and yet great and powerful forces are operating just beneath the surface that will shape the phases to come.

There is a high degree of personal freedom, but with virtually no infrastructure little chance to exercise it. People are relatively free, but there is nothing to do. There is little to be ambitious about, and little time to pursue ambitions after fulfilling basic needs. As conflicts arise over land and resources, the advantage inevitably goes to individuals who will cooperate with one another, and the strong leaders that can unite them. Diverse groups, over time, unite to form larger groups or face extinction. Strong, motivated groups attract those who are looking for goals and ambitions, and so grow stronger and more motivated. The formation of small nation-states begins Phase 2.

Phase 2: Air: The Builders: Expansion: The Age of the Soldier

This is where "history begins." The complete but undirected freedom of the mob phase leaves a power vacuum for strong leaders to move into. Thus Phase 2 is characterized by conquest and centralization of power - the building (or perhaps the rebuilding) of the Empire. Hereditary rulers are gradually eclipsed, although they may remain as figureheads, by rulers chosen for their merit, either by election or acclaim (The Magna Carta, the Declaration Of Independence). Governmental structures, standing armies, national currency, a postal service, and a civil service are put into place. The typical leader of this phase is a professional soldier (George Washington, Napoleon, Hitler). Justice is swift, certain, and stern. Honor is highly valued, and its loss is considered the worst of tragedies, worse than death.

With the establishment of a currency, occupations completely outside of hunting and farming become viable and necessary. Engineers build the roads and cities, temples and palaces. Tradesmen furnish them. Sailors and common carriers move goods from one place to another, and trade develops and expands. Reliable communication between remote areas is established, and as a result those with bold ideas find a much larger audience than would have been possible before.

Heroic religions arise, which parallel the social climate surrounding them. Individuals feel connected to the great deeds and ambitions of their heroic leaders (or oppressed by them if they are a conquered people or minority within the civilization). The individual now feels allegiance first to the nation-states, and only secondarily to family and local community. Often gods and emperors are synonymous! This, interestingly, may provoke the development of messianic religions in Phase 1 nations that fall to the Phase 2 civilization's conquering armies (and gods).

This phase corresponds to the rising side of the Wheel, and to the element of Air. Like Air, it is expansive, and seeks to fill the area in which it arises. Thus, conquest, the expansion of the empire, is also a distinctive part of this phase. The quickness and restless movement of air reflect the speed and activity level of this phase, like a strong wind drying up a still puddle and taking the water with it as it goes. The eagle frequently is a prominent symbol of this Age of Air. Air is also tied to communication (the breath of speech) and great and lasting documents and ideas are characteristic of this Age.

Ultimately, the centralization of power, while necessary to build the empire, is an inefficient way to run its diversifying economy. Merchants and traders become more powerful than the military and civil establishment, and the empire moves from central command to a republican form of government more efficient, federalized, and responsive to the trader's needs.

Phase 3: Fire : The Innovators: Acceleration: The Age of the Entepreneur

Phase 3 is characterized by increasing efficiency and an upwardly accelerating spiral of commerce and development. In Phase 2, centralized authority, driven by the needs of commerce, created a transportation system, and postal and other communications systems. Now, a system of intellectual property rights (patents, copyrights, software licensing, etc.) is put into place. This puts a marketable value on innovation.

Technological innovations, once unique to the local farms and villages where they were created, become shared widely. As they are shared, they are refined, improved on, and finally lead to new and more sophisticated technologies, which in turn spawn further advances. Protection of intellectual property rights makes improvements in technology profitable, so more resources are devoted to research and development. Innovation also improves the efficiency of capturing raw materials, freeing up further funds for manufacturing and R&D. Occupations develop specifically for innovators and creators of more efficient and powerful forms of transportation, communication, and warfare. Each innovation serves as the starting point for more advanced innovations. Living standards rise dramatically, especially for those most able to access and afford the newest technology.

Religions, once strongly unified in their doctrine, break apart into denominations as their followers pursue their own visions, confident in their ability to discover the Divine for themselves. The achievements of the new sciences empower individuals, creating a climate in which nothing seems impossible or out of reach. Divine intervention seems less necessary with each new reach of capability. Mankind now does routinely what before was attributed solely to the Divine. Individuals feel personally empowered, and owe loyalty first to themselves and their own interests. Family structure becomes very loose and much less defined than in any other Phase. Patriotism, like the bonds of family, becomes less of an ideal and, consequently, less of a reality. Individuals can place their loyalties as they choose, and usually self and career are paramount.

This stage corresponds to the top of the Wheel, and the element of Fire. Like Fire, it is powerfully expansive, almost explosive in its irresistible, accelerating growth and force. Unlike Air and Water, Fire does not expand or flow to merely fill available space; it ruthlessly creates its own boundaries. As it expands, it separates and refines (exactly the opposite of the watery, combining character of Phase 1). The "moral" assumptions of the previous Phases are less absolute as moral authority is increasingly fragmented, and “progress" must be balanced with older values of “right and wrong" in an ever more rapidly changing social environment.  The idea of “Progress” becomes an end in itself, and a new moral compass point. Things that further Progress are good, and things that hinder it are bad.

Entertainment, arts, and literature are produced and distributed in new and varied forms as never before. Government, once the director of society's development, cannot compete with the wealth, efficiency and power of the corporations that now direct its actions. Essentially the government is no longer directing things but is now only regulating where it can, so in a real sense corporations are the de facto government, especially in economic matters. The economy is goal-directed; funds are allocated privately and publicly to further Progress in a variety of social, technological, and economic fields. Government officials gradually become mere figureheads for the economic interests that control them.

Phase 4: Earth: The Accumulators: Consolidation: The Age of the Investor

As the innovation-fueled growth spiral continues, a need arises for capital to fund new and ever more elaborate ventures. Also, as the balance of power shifts from governmental to corporate authority, so wealth and the control of it shifts to the corporate world and a financial industry arises to meet the ever-growing needs of the new corporate empire. Some form of representative government will still exist, but it is now a sham, as the investors will dictate policy no matter who technically holds office. Unlike their Innovator predecessors, who used the governmental structures created in the previous Phase to further a goal of Progress that was bigger than themselves (although not bigger than their egos!), the Investors who assume control from them have no higher vision than accumulating and protecting their wealth. Investors value stability above all, and the risk-averse climate their rise to power creates leads gradually to the stagnation that will characterize Phase 1 as Phase 4 passes its climax and the Wheel rolls on. The values of Honor and Progress that served as the ideals of previous Ages are regarded as quaint, old-fashioned, and irrelevant.

A curious reversal happens when a society enters Phase 4. The very same innovations that were so central to the dynamic character of Phase 3 are now the backbone of daily life and commerce. Society has been forced to adapt to these changes, and is now dependent on them for its functioning. The result of this transformation is that while the power of the innovations of Phase 3 have brought society to a new height, they have also imposed their own limitations on society by making it work within them. So, what shattered the old limits has defined the new limits, meaning that what was acceleration has now become rigidity! The roads that brought grain to Rome, nurturing its growth, eventually made Rome entirely dependent on those very roads, and vulnerable to any failure of supply along them. In our age, the computer technology that fueled incredible innovation in the 1990's now forces us to do business, run our military and government, educate our children, and even socialize, in ways that are computer-friendly. In time these limits will make us vulnerable to those earlier-phase societies that are not forced by technology to conform to digital requirements to operate, and thus remain freer to innovate in ways we cannot now anticipate (because we can only anticipate from what we know, and what we know is limited by the means we use to communicate it!).

In a seemingly paradoxical process, the multiplicity of media outlets that resulted from the innovation of phase 3 actually decreases the diversity of opinion. This happens for two reasons. One is that, in a natural human reaction of this Phase, people choose to listen to the messages that best fit the views they currently hold. They do not want to be challenged, they want to be comforted. They change channels if they are challenged by new ideas, so the more "channels" there are the less likely it becomes that alternate viewpoints will find an audience outside of their base. Also, control of the media consolidates into the hands of a few huge corporations (as do most industries), so that there may be hundreds of channels, but only a few messages. All of this results in a diversity of viewpoints narrowing down to a few highly polarized, entrenched outlooks. The emphasis on communication technology as a means of delivering entertainment, instead of exchanging ideas, makes for an increasingly one-way flow of information, and so although the technology of communication continues to improve, driven by the demand for more and more diversion, the actual amount of information communicated sharply declines.

This process happens also with religions. In Phase 3, when confidence and pride led to a feeling of empowerment by individuals, the breakup of earlier large-scale churches into smaller, more “specialized” congregations - or many “congregations of one” who chose to follow their own, individual path created many new denominations. Now, fear of an uncertain future saps confidence in the ability to “find your own way” and a fundamentalist tone prevails in the religious sphere. The more experimental, philosophical, and self-determining churches wither as people return to “mainstream” faiths and more fundamentalist doctrines that emphasize “salvation” and “repentance” over “enlightenment” and “self-actualization”.

The careful reader may have noted that while the society as a whole is leaving the growth side of the cycle, these “mainstream” churches are in fact growing rapidly, so they might be considered to be in Phase 2 of their own cycle, a growth phase characterized by empire-building. As the economy's growth cycle continues to stagnate (and eventually collapses in the coming Phase 1) these churches will continue on a complementary path of increasing growth that may lead to religious wars as they begin to reach their growth limits. It is important to understand this opposite, and to some degree symbiotic, relationship to fully appreciate the necessary uneasy rivalry between Church and State that characterizes a free society, and the uniting of the two that makes a theocracy so economically unworkable (i.e. Communism, Ayatollah-governed Iran, and Europe's Dark Ages). In a free society the economy grows as religion wanes; and when the economy wanes then religion will grow powerful again. A theocracy attempts to make both rise and fall together and in doing so defies the natural cycle of social growth and is ultimately doomed to failure, being crushed by the unstoppable Wheel, shattered by internal tension that cannot be reconciled.

If Phase 3 was the Pride that precedes the Fall, then Phase 4 is the beginning of the Fall itself, and Phase 1 will be the painful landing! But during Phase 4 it may not seem like a fall at all, rather it may seem like a time when all is at its peak, a Golden Age. To most, it will seem like the cycle has finally ended and lasting stability has been realized. This is an illusion. This time is like standing on apparently solid ground atop an underground cavern that is being steadily eroded by the river flowing through it. Collapse is inevitable, and people know this deep inside, hence the fear that dominates this phase in the midst of luxury.

The financial industry, as it evolved in Phase 3, acted much like an accumulator in a pneumatic or electrical system, storing and supplying capital on demand. Initially, the financial industry provides a vital boosting and sustaining function to other industries, but eventually it ceases to serve and begins to control, finally existing only for its own sake. Investors start to dictate the direction and form that the corporate innovators will take, because they control the flow of capital that funds the projects. Thus, while capital acquisition becomes more structured and predictable, there is increasing conflict between those who would initiate new projects and those who would authorize their funding. In the previous phase, these were the same person, making corporate decision-making quick and effective, although riskier and less predictable. Gone is the ideal of furthering Progress to which new projects would aspire, sure that if they were sufficiently innovative and well-conceived they would turn a profit in time. Now the only outcome that matters is generating a guaranteed return on investment.

Individuals feel disconnected from power and decision-making, as indeed they are. They no longer trust their leaders, and feel that their interests and their leaders' interests are not the same (and they could not be more right). Fear of  an uncertain future leads to a gradual shift back toward a defined family structure, as people seek the security of belonging instead of the freedom of action that comes from a single lifestyle. Secretly, many people long for the collapse to Phase 1, if only to relieve the stress of fearfully waiting for the inevitable.

As the rich and powerful become more so, they do not create new wealth any longer, but simply accumulate all the existing wealth that they can. Production declines even as the trading of securities based on it reaches new heights. Notably, corporate stocks continue to rise but individual incomes do not. National and corporate patriots look more to the past than the future, as there seem to be no heroes or goals standing out to admire or follow. The heroism and confidence that marked phases 2 and 3 (Air and Water) are gone. Cynicism and fear are the mood of the day. Even individuals who share in the overall, if somewhat theoretical, prosperity feel a sense of powerlessness and uncertainty about the future. Fear of changing the status quo leads to inaction, which leads to stagnation. Innovations that occur in this phase tend to focus more on security, comfort and luxury than on personal empowerment. Entertainment, as an industry, eclipses production and research. In this climate amusement is more highly valued than achievement.

Phase 4 corresponds to the downward side of the Wheel, and the element Earth. Like Earth, it is inflexible, and not expansive. Rock and sand know only stasis and gradual decline, not growth. Not ruthless, just uncaring, they exist to exist, not to prosper. "Right and wrong" and “progress” are now replaced by "profit and loss" as no other standard is recognized by those who wield the real power. What was previously the means has now become the end. Rulers are likely to be increasingly hereditary, as even though they may be elected or chosen as before, they will come from the same families or clans, presaging the formally hereditary leaders of the coming Stage 1 (George III, Louis XIV, the Bushes, the Gores, the Kennedys). Interestingly, the families will often be ones whose progeny played a significant role in Phase 2 triumphs or Phase 3 innovation, another way in which Phase 4 looks back, not forward, to find pride and glory. This is a reflection of the distrust of present leadership and the desire to belong to a family that characterizes a more heroic age.

Tension is created by the imbalance of capital distribution, as capital accumulated by investors is no longer easily available for discretionary use by corporate innovators, or the consuming public. They must constantly borrow from the investors, creating paper profits but adding more and more to the cost of doing business, making the economy less and less efficient. The government, too, may become hobbled by the cost of raising capital, stalling infrastructure changes and increasing taxes. Capital for new projects will increasingly come from less risk-averse investors from “outside” or foreign sources, and as this increases national sovereignty and pride will correspondingly decrease.

Thus, the accumulation of capital, which at first aided growth and development, becomes a brake on growth as it begins to exist for its own sake. As capital sources become more and more disconnected from the industries that created the wealth, trade begins increasingly to consist more of an exchange of notes and options than of goods and services. When the tension between the needs of investors and the needs of producers and consumers becomes great enough, something has to give. There may be a revolution, which will attempt to replace the existing (and by Phase 4 nearly powerless) government with a stronger and more centralized government (a fast-forward to Phase 2, with the revolution itself providing the necessary chaos of Phase 1). Really, this is a revolution against the accumulating class. Or the currency may suffer “deflation” when the productive economy stalls and the theoretical “leveraged” money in the accounts of investors is rendered worthless, leaving only the actual currency in circulation as available capital (This is what happened in the US Great Depression of the early 1930s). Finally, an inflationary collapse can result when the now-powerless government runs out of productivity to tax and must pay its burdensome debts, and starts printing more money to do so (Germany before Hitler, Argentina). This path is especially likely where the majority of government debt is owed to investors outside of the country, who cannot be taxed by the strained government. But whatever the mechanism, Phase 4, the Age of Water, will end in the collapse of existing structures.

Applying the Cyclic Model to Historical Events

While the cyclic phases outlined above are the inevitable path of any civilization, they will not always manifest in the purest form, and recognizing them can be difficult and debatable until hindsight brings clarity. It is a model more useful for understanding than for predicting. The influence of neighboring civilizations, natural disasters, plagues, war, and the like can slow, accelerate, or in rare and extreme cases temporarily reverse the normal progress of history. But the cycle will resume once the altering force subsides, often quickly moving forward with abnormal speed, until equilibrium is reached again. Also, in the real world, the end of Phase 4 will not necessarily result in a complete return to a primitive state of affairs. Phase 1 may be the chaos of a revolution, the takeover by “barbarians at the gates of Rome”, or an economic disaster without the complete dissolution of government. The crucial marker is the transfer of power that occurs as each phase completes and the next begins. In Phase 1, what real power there may be is held by agrarian and other raw producer interests, although mostly there is very little authority of any generally recognized stature (unless imposed by a conquering army, but no “native” government then exists); Phase 2 centralizes power in the military and governing class; Phase 3 sees the ascendancy of the mercantile class as the innovative decision-makers of society; and in Phase 4 the bankers and financial exchanges take charge.

Societies may not go through only one cycle; in fact, most societies will go through several of these cycles, or may go through one cycle on the large scale while cycling repeatedly on the smaller scale, or at a local level. Also, a society may not all be in the same phase at the same time. The center of the empire can be in Phase 3 while its outermost provinces are just emerging from Phase 1. In the last half of each phase, the genesis of the next phase is brewing beneath the surface, and in fact each phase nurtures the growth of the next by the very excesses that will bring it to a close.

The same cycle, at an even smaller scale, appears in personal lives, relationships, organizations, corporations, churches - even the seasons correspond to its rhythm (Winter is Phase 1, Childhood is Phase 2). Thus the cycle of history is personal, as well as social and economic. It is a manifestation of a natural cycle that underlies the material and spiritual Cosmos from the cellular level to the stellar. The cycle of the four Elements, first explained by the ancient Greeks, rolls on through every phase of our lives, cycles within cycles within cycles. Had the Pythagoreans discovered fractal mathematics, they might have been able to explicate this Cycle much more profoundly than they did! The nature of the Cycle’s manifestation is like a fractal graphic, with millions of small-scale cycles combining and multiplying to create localized large-scale Cycles that rise and fall, ebb and flow, centralize and disperse. Wise individuals learn to read the Cycle’s rhythm when it appears and transcend it, living at the center of it and making the best of each phase, rather than becoming a victim of its unstoppable churning by trying to fight it, or by attaching themselves to the current phase as if it will never change.

Can a society ever escape the fate of the Cycle? If this is possible, the key will be to incorporate all phases of the cycle in the society, keeping them in balance at all times. In practice, this will most likely be achieved by structuring the social order so that the cycle can revolve within the society without bringing it to ruin. It might be argued that the United States has done a pretty good job of achieving this goal in its history. The hardest part to manage is, it seems, the transition from Phase 4 to Phase 1, as Phase 1 does not lend itself to management and the leaders of Phase 4 will not be inclined to see past their current status quo. The leaders of Phase 4 are the most inflexible and least likely to accept change, so the struggle is twofold; to bring society out of Phase 4 smoothly, without violent revolution; and to minimize the amount of time spent in Phase 1, so that the identity and goals of the society do not become lost in the period of (apparent) stagnation. Phase 1 is necessary, but need not be prolonged. In a well-managed process of social change, it is much shorter than the other phases.

This is about where the West is in 2004, in the early stages of Phase 4 of a large scale cycle that began about 1974 with Phase 1. Despite what many historical and especially financial writers have tried to do, the cycle is useful for predicting direction but poor for predicting timing. Many factors may make one phase run faster or another phase more slowly. My guess is that the end of this present phase for the West will begin with the retirement of the Baby Boom generation (starting around 2015). By then, most money and power will be consolidated (for the nature of the phase is to consolidate) in the hands of a comparatively small, nonproductive part of society.  The current plan to parasitize the still-working generations to provide a comfortable retirement for the Boomers here and in Europe is numerically unsustainable unless massive immigration swells the worker pool to similar numbers as the retiring generation. Massive immigration is, of course, easy to achieve, but there are two problems that will arise with doing this. One is that the immigrants will have little reason to want to support the aging generation, to whom they are not even related, let alone indebted. The second is that the jobs necessary to generate the income required to pay the huge tax burden are even now being moved to the East, along with US government debt, with the impeccable bookkeeping logic of the current Phase 4 world leaders propelling them. As taxes rise and the money supply declines to pay the retirement bill, there will be no financial reason to expect those jobs to return. So the wave of immigrant workers will have nothing productive to work at - clearly a Phase 1 condition which a larger population will only make more dangerous and prolonged.

Phase 4 is already in progress, and Phase 1 is inevitable. The most reasonable policy goals for the near future focus on shortening Phase 1 as much as possible. Keeping check on the birth rate and stemming the tide of immigration (for now; it may be good to encourage the birth rate to increase once Phase 1 is begun to provide soldiers for Phase 2, although that will tend to happen naturally), and reducing the benefit commitments to the coming wave of retirees before they retire and it is too late are essential to achieving this. Also, the military must be made and kept strong despite what will be a seeming lull in military action; and they must be granted greater independence from the civilian government than they have now. They will be needed to keep order and maintain borders during the coming Phase 1, as some of the countries we now use for cheap labor will be in mid-Phase 2 by then and looking to expand. Also, if the military are too tightly under the control of civilian authorities, the leaders of the investor class (who fear change more than decay) will use them to suppress revolt (or less violent upheaval) as long as possible, which will only make revolt longer and more terrible when it comes.

"If you make peaceful change impossible..... you make violent revolution inevitable."
President John F Kennedy

Appendix A - Recent smaller-scale US cycle

Dates are approximate and intended only as points of reference, as phases do not start and stop all at once, especially in a nation as large as the US.

1929 - A Phase 1 begins with the stock market crash, signaling the end of a Phase 4 investor-controlled era. This is the beginning of Phase 1 for the US and also the rest of the world, so the resulting depression is deep and long. The New Deal begins to consolidate power in the Federal Government, paving the way for Phase 2. Note, thought, that the first efforts are to save agriculture - a sure indicator of the Phase 1 period. Bread lines, soup kitchens, the Dust Bowl - all centers around food production and supply.

1936 - Phase 2 for the US begins as the US begins preparations for WWII, a heroic military era for the US. Railways and roads are beefed up and used to their maximum capacity. As the war nears a close, fantastic strides are made in weapons research (jet aircraft, the nuclear bomb) and medicine. At the end of this phase the interstate highway system is built, a classic late Phase 2  project which paves the way for Phase 3.

1953 - Phase 3 brings an era of innovation and corporate growth, especially in aerospace. The technological advances of the war era now find their way into industry and consumers' homes and automobiles. Nuclear power becomes a reality; jet aircraft take wing; even the Cold War is fought with innovation and technical competition. The space program is the pinnacle of Phase 3 achievement, lasting even past the end of Phase 3, owing to the long research and development cycle involved.

1965 - Phase 4 brings the accumulation of wealth by investors, and the social turmoil of the 60's. Vietnam was an investor's war, and hence an unsuccessful one, fought more to make and assure profits for defense contractors than out of any real threat to US military security. The youthful rebels of the 1960's spout Communist ideas, echoing Marx, who saw the excesses of the investor class in his day but failed to understand the temporary nature of its hold on power. In its desire to maintain a status quo, rather than advance and improve, Marxism embodies the worst of Phase 4 thinking while outwardly rebelling against the investor class. It is the product of a limited worldview. The space program finishes the projects (Apollo) already planned in Phase 3 but then runs out of steam as the public begins to question the value of space exploration for its own sake.

1974 - Phase 1 begins with the collapse of the Nixon administration and the "stagflation" of the 1970s. Carter presides over the twilight of Phase 1 as the US is humiliated by Iran. The space program grinds to a near halt. The gas crisis brings the economic engine of the US to its knees. Society turns to drugs designed to placate and sedate (as Hunter S Thompson so brilliantly observed and contrasted with the psychedelic “enlightening” drugs so popular in the early 60’s).

1980 - Heroic Phase 2 leader Reagan takes office, and an era of successful military adventures begins. After the drug-addled stagnation of the 1970s, the US is ready to accept and cheer decisive leadership. Society turns to sobriety with the “war on drugs”.

1984 - Reagan's tax cuts lead to new prosperity and innovation with widespread use of computers, fax machines, etc. Phase 3 has begun but is not yet the dominant phase. Reagan's SDI program captures the “we can do anything” Phase 3 spirit beginning to emerge.

1990 - Desert Storm, a successful war, is fought in cooperation with many other nations. This war is not fought to capture territory but to secure oil reserves and assure that Kuwait does not pull its money out of the New York capital markets. Both the oil and the capital are necessary to the entrepreneurs who are taking control of government policy. Phase 3 is underway. The Internet brings commerce to a stunning new level, creating entire new industries and a blindingly fast period of innovation much like the 1920s, which saw the same kind of growth due to trucking, radio, and other transportation and communication improvements. A long and prosperous Phase 3 economy will dominate all through the 1990s as technology changes the way we work, live, meet, and play.

2000 - Investors begin to question innovators and start to demand returns from Internet companies. Progress itself is no longer enough to justify investment. Phase 3 has begun to yield to Phase 4, but this powerful Phase 3 is not over yet. As focus shifts from innovation to investment returns the overvalued and overheated economy sputters and begins to slow. The fear of a "millennium bug" and impending messages of doom begin a climate of fear - a signal that Phase 3 is ending and Phase 4 is beginning.

2001 - Phase 4 could not take hold with a more dramatic threat to financial security as the World Trade Center and dozens of major financial firms are destroyed in a single morning. 9-11 brings the need for a strong military response, and the Afghan and Iraqi campaigns are spectacular battles. Note, though, that they are not wars of conquest, they are wars of threat elimination and containment. At home, the Homeland Security Department is founded, a monument to the fear that will come to dominate society in the years to come. Significantly, it “consolidates” the responsibilities of several formerly independent agencies - an important Phase 4 trend. Security checkpoints spring up at airports, government buildings, and many other places, placing a heavy financial burden on top of those already in place. Note, though, that the stock market does not crash, nor does the federal government stop piling up debt; stability is maintained as all costs as long as it can be. The entertainment industry continues to set records of profit. Industries consolidate, in retail, manufacturing, banking, and entertainment especially.

2011 - The stock market begins to feel the pressure of the coming retirement crunch…

Joseph Preston, Jan 2004