The Fourth Turning Explained - Boomers vs Millennials Generational Crisis (Neil Howe Grant Williams)
GRANT WILLIAMS: In recent years, the world has seemingly been steadily pulled apart by forces either too subtle or too momentous to discern. Tensions have risen, conflict has increased all around us, and investing has become more complicated than ever. Much of that conflict seems to stem from a generational change, as the baby boomers begin to retire, and draw a curtain across their time in power, and the millennial generation begins to challenge the status quo. Everything we see unfolding today was predicted by Bill Strauss and Neil Howe's masterpiece, The Fourth Turning. And so today, I'm traveling to Great Falls, Virginia, to spend the day with Neil, and to try and understand what the raging generational battle for power in America and beyond might mean for the world in the years to come. Well, Neil, thanks for having me out to this fantastical corner of the world. It's so beautiful out here. Driving out here from DC, it reminds me of Connecticut, where I used to live. And I have such fond memories of the trees. And just the perfect time to come here to talk to you about the changing of seasons. Because so much of what's gone on in the world today is being built around politics, and you can see the generational forces at play. And I thought, who better to come and talk about this stuff because I'm trying to get a handle on it is very difficult. So thanks for agreeing to come to spend some time to kind of pick through this stuff. NEIL HOWE: Well, Washington, DC, is an interesting city. Unlike many countries, our political capital is not our commercial capital. And so what it means is that you really don't have to drive very far outside DC. Were you amazed? GRANT WILLIAMS: It was incredible. It's like, 25 minutes, and you're-- NEIL HOWE: And you're out in this bucolic wilderness out here. GRANT WILLIAMS: So New York, not so much. NEIL HOWE: Not so much. Connecticut, a little bit further away further away. GRANT WILLIAMS: A little further away. But look, we're here in the center of the political universe at what is an extraordinary time to be alive and to be watching this whole thing unravel, perhaps unfold is a kind of term for it. So I really want to talk to you about the cycles of the generations, which you Will Strauss wrote this amazing book, The Fourth Turning, on which I've recommended and bought countless copies for people. I'm a big reason for that thing [INAUDIBLE]. But it's such an important read. And so what I'd love to do is just get some background on how that project came about, how your interest in this whole thing developed, because it's extraordinary. NEIL HOWE: Well, it dates back many years. I mean, you know, Bill Strauss and I, who coauthored Generations and The Fourth Turning, and a number of other books as well on different generations-- we actually did a book on generation x that came out in 1993 called The 13th Gen-- Abort, Retry, Fail-- an interesting one. And then a book on the millennial generation, Millennials Rising in the year 2000. But the two of us met in the 1980s. And we started our first book, Generations, which was in some ways, the foundation book of this whole project. We had a different way of telling all of American history. It was an absurdly ambitious idea. We wanted to tell all of American history as a series of generational biographies. And we were amazed-- we looked, no one had ever done that before. No one had. You know, everyone tells history as the history of everyone in every age bracket every year, right? So it's typically midlife people, because they're the leaders and the parents, right? So it's typically people in their 50s. Well, in 1851, they were all doing this, 1852, they were all doing this, you know? But if you think about-- and I often characterize this as looking at age on the y-axis and time on the x-axis-- we don't live horizontal lines. We all live diagonal lines, right? We grow older as time goes on. And no one had ever written a history following the diagonal, following the life as we actually live it. GRANT WILLIAMS: Which is hard to believe. NEIL HOWE: It is kind of amazing to believe. And so here's why it was so challenging. Because history is written about these different age groups, we had to like, break everything down and reassemble it. So we had to take for instance, Abraham Lincoln's generation. We had to look at, well, what were children doing in the 18 teens and '20s. What was youth doing in the late 1820s, you know what I mean? And what were old people doing in the 1860s and '70s or '80s. And reassembling all the parts in the one collective lifespan, what we call a generation. And so what we found, after following this method, is that, yes, different generations have completely different collective experiences they learn completely different life lessons from what they've been through. Typically, one generation who's involved in a war, the next generation of children during the war and take a completely different set of lessons from that experience. GRANT WILLIAMS: But was it war that tended to be the most common shaping force until I guess, the boomers? NEIL HOWE: Say that the two most extreme kinds of moods that are very important in shaping generations would be on the one hand, not just wars, but constitutional crises. Things like the Civil War, where you're not just fighting a war, but you're also kind of reconstituting all of government, and settling enormous political issues that everyone's involved in. And on the other hand, are something that we've had a whole school of historians pay attention to. And these are awakenings. These are religious and spiritual revivals. And moments at which we revive the culture. So our story gives as much attention to the history of religion and culture as it does to the history of politics, and war, and nation reshaping from kind of the statesman point of view. But here's the next thing we found-- and that was the most exciting. It was the thing that kind of changed our book. Was that not only of these generations each different from each other. But that these differences followed a pattern. And that, to us, was incredible. Meaning that certain kinds of generations from a total pure personality point of view always followed other kinds of generations. And that, in turn, when you think about generations obviously are shaped by their location and history what's happening-- so if there's a pattern of generations, that almost implies a pattern to history itself. And that connects it back to something that people of often observed about American history. Not just American history, but much of modern history, and certain areas going back even to the ancient world, as well, that there are interesting patterns of history. One thing we see in American history, for example, is that we've seen this regime changing political sort of total wars for dominance in sort of the Anglo American history about every 80 to 100 years. In the American context of course, this goes from the Glorious Revolution to the American Revolution to the Civil War to World War II and the Great Depression and where we are today. GRANT WILLIAMS: Right. But just going back to this project, when you talk about this great realization that history went in cycles, was this something that having found it then changed your entire outlook? Or is it something you were almost looking for and then found, and managed to look drop that onto history? NEIL HOWE: It's interesting-- we weren't looking for it. Our original project was simply to write about how different generations lead the country differently as they become leaders, and endow the country with different things. Are concerned about different things. We did not go into this thinking there was primarily interested in any kind of cycle is this. The cyclicality, the rhythm of it was really serendipitous. It was just discovery. If you look at how humans look at history, there are basically three different ways that people look at time, social time. One is chaotic. Anything can happen anytime. It's just random. There's no progress, there's no regression, there's no anything-- just prepare for anything. And that's a very obviously, kind of a nihilistic point of view. It's hardly a philosophy. It's just sort of that's kind of the dark side. That's what you don't expect, right? It's an acknowledgment of unpredictability. And I'd say from Generation X, I get a lot of that. Just skeptical of everything. But I would say the two key ways of actually bringing order to history as opposed to acknowledging randomness, is thinking of history as a cycle and thinking of it as linear. And I would say that view of history as progressive is now a big competitor to the cyclical view. And I'm not-- I'm not opposed to progress at all. But here's one our central thesis of our book-- and we talked about this in Generations. We also talked to it again in The Fourth Turning. And that is, interestingly, as we believe in linear history, we can iron out all those cycles. Weather cycle, forget it. I'll stay inside. You know, dark-light cycle-- no, we've got lights. You know, we'll just illuminate everything. So all of those nasty cycles we can smooth that with technology. But interestingly, what we found is the more we try to smooth them out, the more we often exacerbate the very kinds of cycles we're trying to solve. And I mean, a great example is the business cycle. GRANT WILLIAMS: I was just thinking exactly that thing. NEIL HOWE: There was no business cycle in pagan times. GRANT WILLIAMS: Right. NEIL HOWE: Well, why? Because business cycles are always technology. You're building things that last. You have a capital cycle that lasts over time. Your optimism at this point results in investment in that point. We didn't have this problem before you had industrial. So in other words, our effort to build things that last over time actually give rise to cycles, right? We have traffic cycles. You have consumer products. GRANT WILLIAMS: You have business cycles. We desire to smooth out those cycles. It's fascinating to me, because as I said, it's so clear when you look at history, that these cycles exist. And so what is it that drives us to try and smooth them out? NEIL HOWE: Control. Hubris. GRANT WILLIAMS: But particularly with reference to the business cycle, because this is key, I think. It's picked up pace since the '80s with the Greenspan Fed. This idea of hubris and control. And I've never met Alan Greenspan, but I've met plenty of people that have. And when you mention the word hubris, it's something that resonates with every description I've had of him as a person. And this idea that we can control this. We can control a naturally occurring cycle that is built upon the hopes, and dreams, and mindsets of however many people there are inhabiting the Earth at the time are contributing to that business cycle. Surely, that's completely fallacious? NEIL HOWE: Well, you know, I certainly think it is. And I say this-- the broader you construe the cycle, the more fallacious it is. In other words, there's some narrow sense in which you may be able to control the cycle. But typically, what happens is more broadly construed to give rise to-- because the very act of hubris means that you're very overconfident at doing that will lead to something else that will go wrong. Everyone fusses over the Fed-- the Fed and central banks. Well, the yield curve, the steepness, and the inversion is all the Fed. No-- forget central bankers. Just look at the real dynamics of the business cycle. What happens after a recession? Lots of liquidity. Still lots of fear. Interest rates are certainly lower than year end. But suddenly, people being acquiring new confidence. People start issuing a lot of new long term debt, because they have new long term projects. They have projects during the most recent recession they weren't doing, they got to catch up. So you can imagine quickly. And then people will invest in those things because near-term rates are really low. These rates are much bigger, they're going to make more money. And it looks like that's not going to change for a long time. So everybody locks in. And so you can imagine-- and as this thing begins to speed up-- so you know, more confidence begets more confidence. You've got more people get employed, more people start spending. You get all these positive feedbacks. And then ultimately, you have credit expansion that comes along with it, then people begin to fear inflation that's coming along with that. That also pushes up the long end of the credit market. So the point is that you can see how early on in the business cycle a steep yield curve is what you expect. Then go to the end of the business cycle. What happens? All that risk is built and all the instruments now. Everyone's already employed. And everyone begins to feel that today is actually much better than the future, right? And so everything begins to tip this way. And as it tips this way, of course, then banks go out of business, or they can't really do much because there's not they can't transform maturities anymore. So there's nothing really in it for them to land. And I often tell people, one interesting way to actually track the steepness of the yield curve is a very simple indicator that the conference board tracks. And you could look at it on any Bloomberg terminal. It's just take what consumers think about the economy today minus what they think about the economy six months or a year down the road. Early in a business cycle, much better tomorrow than today. Late in the business cycle, much better today than tomorrow. And that exactly tracks this steepness of the curve. Central banks just accentuated, which is actually a great case of us trying to stop the cycle by accentuating the cycle. GRANT WILLIAMS: Exactly right. But this is really interesting. When you talk about that, and you describe the business cycle so simply as, clearly, we all kind of innately understand that that's how the whole thing works. The very idea and the hubris-- I mean, you picked the exact word-- of inserting a body to try and manage that to what? To soften the downturns. OK, but to your point, we've been through all these downturns, they always end in exactly the conditions you describe, which is the green shoot is the spring into the summer. It all happens. So to this idea that we need that body in there to do that-- and more importantly, in the context of today, given what they've done, the damage they've done to that business cycle-- because what they've essentially established is all those conditions that you described happen at the end with low rates, and people were able to borrow money-- they forced that upon a world that wasn't really ready for it. Because it hadn't gone through that cleansing process post '08. How much damage do you think that does to the cycle? NEIL HOWE: I'm kind of the amen chorus here. I mean, I think it accentuates it. And you know, Hyman Minsky, who became very popular, I think, after 2008 in the GFC kind of kept it in the closet for many years. GRANT WILLIAMS: Paul McCulley brought him out the closet. As only Paul can. NEIL HOWE: There you go. But I think he really put a lot of focus on the notion of confidence itself. GRANT WILLIAMS: Yeah. NEIL HOWE: And the notion of-- in other words, low volatility. And the idea of risklessness in itself encourages risk. And so you really see in that framework, almost the necessity of one aiding and abetting the other. Now to go from this business cycle context to a larger generational context, you can see what the analogies are, right? Imagine an entire generation raised at a time without conflict, without risk. What kind of lives are they likely to lead? What would they assume that the prior generation didn't assume? And that's why generations are important. Our location in history shapes our attitudes, our behavior. And the key for us is acknowledging how that shaping young is going to shape how that generation behaves the rest of its lives. And one of the fascinating keys here-- and this is really to bring into focus-- you know, boomers is that this kind of generation is so much of a pattern throughout history. Certainly through American history. These generations raised just after a crisis, invariably come of age during the great awakenings. And late in life as senior leaders take the nation into and through the next crisis. And that's how to tie history together. And by the way, it's a great way to teach history. GRANT WILLIAMS: One of the big reasons that I wanted to come here to talk to you was the fact that we seem to be at another one of those junctures. You know, everything you've just described is in place. And as lovely as your porch is, and as beautiful as it is here, we're this close to DC, and there's so much I want to talk about-- that coming together of two generations in politics and what it might mean for us. So I think we should maybe head into town into, the Big Smoke 25 minutes away, and talk about some more. As secluded as it is, Neil's house was just a short ride away from DC. And that ride gave me a chance to ask him some questions unrelated to finance and politics. Tell me how a sun kissed California boy ended up here on the east coast. NEIL HOWE: I grew up in a family of scientists, physical scientists. GRANT WILLIAMS: Right. NEIL HOWE: So they were all astronomers and physicists, biologists. And you know, rebel that I was, I was interested in religion, culture, other things. Go straight here. And that naturally tended to draw me to the east, ultimately, for graduate school. And you know, everyone who's interested in culture, and the humanities, and the liberal arts tend to be on the east coast. California really has not much of a reputation. I mean, social science, yeah. Particularly, quantitative social science. But sort of a deeper qualitative stuff-- no. No, that really doesn't happen in California. So that drew me out here. And then one thing led to another, right? And I got to know people out here. And then the big media centers are added, the book publishers are all-- I mean, you understand. It's all out here. And then ultimately, Wall Street is out here, right? So everything's out here. GRANT WILLIAMS: And why DC instead of New York? NEIL HOWE: Because of policy. So I did a lot of policy stuff. And a lot of the data that comes out of the census, and the Fed, and everything-- it just kind of drew me down here. I actually originally came down here for a short lived periodical on the Fed, believe it or not. There was a periodical called the Fed Fortnightly. GRANT WILLIAMS: They suck us all in at some point. NEIL HOWE: And I came down here and I was-- I just stayed here. And that's where I started working on it. GRANT WILLIAMS: Do you ever get the urge to go back to the west coast? NEIL HOWE: I often go back, and ultimately, I would like to spend a lot more time back on the west coast, yes. GRANT WILLIAMS: So tell me about Great Falls. We're off to see Great Falls. NEIL HOWE: So where I live is-- actually, where we were on that porch was only actually, a few hundred yards from the Potomac River. So this whole area is a set of parks along the Potomac River, the south side of the Potomac River, the Virginia side. And as you get down here, right along the Potomac on the south side, called Great Falls National Park. And you know, it's a national park, you know? What do you say. It has like, funny guys with the-- GRANT WILLIAMS: Yogi Bear. NEIL HOWE: With those kind of Yogi Bear hats, and they charge a fee to get in and all that. But it is a real gem. And you will see here, it's quite remarkable. When it floods here, it really floods. GRANT WILLIAMS: Make sure to get the painting accurate, folks. Do you think I can pass for an interagency senior? Lifetime pass for senior-- that's optimism. NEIL HOWE: I refuse. GRANT WILLIAMS: That's kind of-- The various turnings identified by Neil and Bill Strauss are naturally reoccurring phenomena, which once discovered, are as predictable as the seasons. But within them, there's a great deal of unpredictability. So how do we determine where we are within the broader cycle? NEIL HOWE: So Grant, I wanted to bring you here, because there's something about this image of nature with that restraint that says something about the cycle we're all familiar with, which is the seasons. GRANT WILLIAMS: Yeah. NEIL HOWE: And when we think about periodicity in history and cycles in history, we sometimes think about physical inorganic cycles. Like a planet revolving around the sun. And that can be solved analytically. I mean, we know exactly how long it takes. It's an equation with a solution, with a determinant solution. But most of the cycles we see in nature are organic. They're indeterminate. These are what we now call in the rubric of kind of modern mathematics, modern social science-- we call them complex systems. And they have what are called strange attractors. That is to say certain periodicities, we don't really know why they exist, but they do. Now here we have the different changes in the seasons obviously related to the tilt of the Earth as it revolves around the sun. But we see many other kinds of periodicities in nature. We don't entirely understand all the complex systems. You think of the molting of a sparrow, you think of the bedding of a flower. You think of just respiration as we take our breaths. All kinds of hundreds of feedback, biochemical and otherwise, that are determining how that's going to happen. We can't predict that absolutely. It has no finite solution. But you kind of know. All that has to happen in a certain order. And it has a certain rough periodicity, or else, you, Grant, stop living, right? So that's how many natural systems are. And I think that when we look about cycles in social life in history itself, we're looking at the same kind of system. You just kind of have to observe it and find the strange attractors. And I do think that a lot of the work that bill and I have done on you know, turnings, and generations, and linking these longer kind of social mood cycles, are of that nature. We can look at the drivers behind them, and we can look at all the various manifestations in war, and religion, and community, and risk taking, and all the various phases they go through. But being able to deduce them in advance from the sort of molecular organization of the universe? No, we can't do that. And we probably never will. It's probably undoable, right? GRANT WILLIAMS: You know, you made the point to me earlier about the fact that it's unknowable when spring will start. But there's a period there between winter and spring, where you can see the changes happening. You just don't know until you're in it. When you take that and drop it on top of generations, what does that mean? What does that mean, that gray area in between one and the start of another? NEIL HOWE: Well, you know, this is kind of my response to people who constantly say, well, you know, if this were true, can you tell me exactly what year something is going to be? And that's the point-- you can't. Is the same way you can say, yeah, there's going to be a spring, but I can't tell you exactly that it's on April 7 that we're going to get a 76 degree day. And it's exactly the same here. You also can't tell exactly when a generation will be cut short. You can't tell exactly what kind of historical events will occur. But what you can do, clearly, is you can say that in January, it's going to be called. And in June, which it's already going to be soon, it's going to be really warm. GRANT WILLIAMS: Well, what's interesting is with the spring, if you say to someone, you know, I can't tell you exactly when, but I know spring is coming, they'll believe you, because they have the experience of years of spring. But I'm sure if you tell them something-- oh, your theory is nonsense. NEIL HOWE: Well, that's the problem. And so what you really have to do is you have to analogize, which is what I do all the time. Look, it's like that. But here is the interesting point about a generational cycle, which lasts 80 to 100 years. Every era we're entering is an era in which everyone who last experiencing it is disappearing. GRANT WILLIAMS: Yeah, sure. NEIL HOWE: Well, that's critical. GRANT WILLIAMS: Yeah, absolutely. NEIL HOWE: That means you're constantly losing the generation that was last there, right? Right now, what have we been missing? The GI Generation, the greatest generation. We have all these ceremonies all the time. My god, we miss their valor, the big think generation-- they're going to make all of this country do big things together. We miss them. Well, that's because we're moving into an era where the new generation is going to replace the role as junior citizens, as the senior citizens fade away. And that's exactly what we don't remember. So this is a constant lesson. You know, each awakening arises when no generation remembers the last awakening. GRANT WILLIAMS: The turning from winter to spring-- I know what that looks like. What does a third and fourth turning-- what does that look like? NEIL HOWE: First, it's a worsening of the unraveling. So individualism, which everyone loves in a third turning, a lightly governed America, a deregulated America, kind of a flourishing America in its individuality-- GRANT WILLIAMS: Entrepreneur culture. NEIL HOWE: Kind of the Ronald Reagan America, which I think in many ways, lasted you know through the '90s. I mean, that basically I think all the way to the '90s bubble, and on into '00s. I mean, it was really this-- it was the era in which Generation X was coming of age, right? And really defined Generation X. And I think they take pride in that still today. You know, they are the generation of individuals, they're all resilient, they're all using their own self as a resource. They don't care what other people think. All of that, right? What happens is that begins to fray, and it begins to degrade, and it begins to get harsher and more distrustful. And anything that has to do with community is kind of devalued, right? And you begin to have these enormous social fissures-- rich and poor, young and old, ideological fissures, identity politics, all the rest. Until finally, society becomes ungovernable and becomes ripe and vulnerable for the next systematic crisis. Whether it's the GFC, or whether it's I think next time around, I'll be even worse-- particularly given kind of the demographic and debt stresses we now face. But at that point, suddenly then, the real key point of the fourth turning, and in the middle of the fourth turning, is when one side just takes over, right? That's when everyone re-establishes community again. And you know, the losers are just pushed out to one side. I mean, look at the Civil War-- that was a fourth turning. GRANT WILLIAMS: Right. NEIL HOWE: We're sitting here right at the divide of the Civil War right here. You know, that was-- these are Yankees are on this side, these are confederates on this side. Well, what happened? I mean, the South was a pariah for two generations. I mean, the South suffered an enormous decline in wealth and income. I mean, it took the south many, many decades to ever recover. The generation that actually is in the most difficult position is the generation in mid-life during the fourth turning. That's you, Grant. That's Generation X. GRANT WILLIAMS: Listen, I feel that already. NEIL HOWE: Because you guys are already invested in the old regime. You see, when you're young, you either already have joined the new regime, or you can quickly shift, right? But you guys already invested. This is why John Adams, and George Washington, and all of these what we call Liberty generation Americans who are in mid-life during the American Revolution. Had such a existential sense of risking everything, because they couldn't go back, right? All of their lives, their property, their sacred honor-- it was all on the line. And the younger generation-- like millennials today-- incredibly optimistic. I mean, all the younger generation of Jefferson, and Hamilton, and Monroe, and Madison, and Jay, and all those guys-- they knew the American Revolution was going to win. But you know, John Adams is sitting there fearful. You know, my god, this is never going to stick together. Because the younger generation-- because again, they're young, right? They're going to adapt. They can still change. They can fit into whatever happens. GRANT WILLIAMS: So what happens to that? I mean, let's use the millennial generation as an example. That younger generation comes through full of hope, full of optimism, who happen to be at the center of this fourth turning with all the chaos, and destruction, and turmoil-- what tends to happen to them? How does that optimism-- does it save them? Does it get changed? NEIL HOWE: Oh, it saves them, because it's combined with a couple of other things. One is community and risk aversion. So there's belief you don't trust the individual, you trust the group. GRANT WILLIAMS: Which we're seeing everywhere. NEIL HOWE: Which we're seeing everywhere. And risk aversion, because you risk it. Remember- - millennials, have been told they're special since the time they were born. And that means especially take care of yourself, because everyone expects great things from you. And everyone-- you know, your parents, and teachers, and public officials all love you, and really care about you. And so why take risks with yourself? Fourth turnings are so often seen as destructive. I mean, wars, financial panics is one. GRANT WILLIAMS: That's how I think of it. NEIL HOWE: Well, yeah. Of course it's destructive. You know, all this wealth is being uncreated, being torn away. All of this just obvious destruction of the old order. But it makes room for the new order. It makes room for the young. And one lesson about history is that one of the things that winter does, is it kills everything back so new things can grow. That's why we have forest fires- - so new plants have space to grow up. That's why it suddenly floods down here. It does the same thing through the Rio Grande. Why? So that clearing out all the junk. So I think that's one very important point to remember. Forth turnings, although obviously painful for everyone, painful for everyone who particularly is invested in the old order, serve a very necessary, almost biological function. GRANT WILLIAMS: That's the word. We talk about institutions, and we're going to go to a place that is filled with not just American institutions, but global institutions, a lot of which were set up after the war. NEIL HOWE: Absolutely. GRANT WILLIAMS: So let's head into town, because there's a lot more stuff to see and talk about, for sure. NEIL HOWE: Let's go to the nation's capitol. GRANT WILLIAMS: All right, let's do it. In the next episode, Neil and I traveled to Washington DC to look at some previous fourth turning, and try to understand what lessons history has to teach us about how these momentous events changed the world. NEIL HOWE: Look at this monument, you say, this is the birth of a golden age. But there's one thing we forget. All the golden ages of history always start with a huge crisis. GRANT WILLIAMS: And along the way, we'll talk with a man who's been at the very center of previous generational change in Washington, Dr. Harald Malmgren. HARALD MALMGREN: It's not something WE think about, but we are edging towards highly concentrated power in the hands of few. For me, it's oligarchies. I mean, we're looking a lot like Russia.