BETWEEN THE LINES: Socionomics presents an alternative explanation of causality
To my knowledge the question, “What came first, the chicken or the egg?" has never been answered. Perhaps it merely reminds us that not all questions have answers, or that sometimes people must choose one explanation over another.
The relatively new social science of socionomics is giving people an alternative explanation for how history, economics and sociology play out on the grand stage of life.
Its advocates, including Elliott Wave International’s Robert Prechter, contend the driving force behind change is social mood. Supporters believe that social mood triggers events and not vice versa.
The founder of Elliott Wave International defines socionomics as the study of actions that result from changes in social mood. Prior thinking held it was events that drove social mood. As an example, Prechter cites the observation that most people think recessions make business people cautious.
Followers of the new social science would contend that a negative social mood would make business owners cautious. His definitive work on the subject, "Pioneering Studies in Socionomics," was published in 2003.
Since the beginning of time, mankind has tried to forecast the future with some degree of accuracy, but for the most part this has been unsuccessful. If the author is onto something, it translates into the ability to predict general trends about the future more accurately, and not just economic ones.
This goes far beyond the simplistic textbook review of the business cycle, or the scientific truth that what goes up must eventually come down.
The visionary author contends that music, movies, the stock market, sporting events, and a host of other things are affected by social mood.
He supports his views with graphs and data, which are quite impressive. The founder of Elliott Wave International believes the stock market is the greatest indicator of social mood. Consequently, he incorporates Elliott Wave theory into predicting general trends about the future.
Prechter is of the opinion the stock market reached its zenith in 2000, marking the end of the Grand Super Cycle, which culminated in the Dow Jones breaking over the 14,000 barrier. Eleven-plus years later, the Dow stands at 12,600.
Optimists think the next move is up with only the debt crisis debate standing in the way of much better times. However, the socionomist perspective believes that social mood will turn dramatically negative in the very near future.
Prechter, in general, sees a significant downturn for several years to come with temporary moments of optimism. The Dow, in his estimate, should fall well below its low of 2008. According to his Elliott Wave analysis, the bottom will be reached in 2016. If he is correct, our political and economic system could be tested to the breaking point. Nothing that has transpired in the 21st century so far has debunked Prechter’s analysis.
In my immediate post-collegiate days, I read Ayn Rand’s futuristic novel "Atlas Shrugged" and George Orwell’s "1984."
Little did I know back in those days that fiction would mimic reality.
Insanity is the order of the day. Our Founding Fathers never intended for government to be so pervasive in our lives. Our political system wields far more power than was ever intended, thus yielding to a tyranny of the majority where politicians vie for campaign contributions and election votes by granting subsidies and bailouts along with healthy transfer payments to their constituents.
As a result, our political leaders hold us hostage because they control the lucrative handouts. That, coupled with the tax code they control, gives them the keys to the kingdom where the fox is now most certainly guarding the henhouse.
Laughlin is a Christian Libertarian. He is an economist, teacher, father, husband and most recently a grandfather. He has written a weekly column for The Tribune for 12 years. He and his wife Gina reside in Meadowlakes. To contact him, email ablaughlin@nctv.com. He is an independent columnist, not a staff member, and his views do not necessarily reflect those of The Tribune or its parent company.