The hemline theory goes cosmic
Dec. 17th, 2007 09:36 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
imomusIn my piece about money metaphors in the art press last week I confessed that "I flunked Economic Metaphysics 101". That was of course a joke -- there isn't such a course. But if there were, it would probably have to include a module on Socionomics.
The Socionomics Foundation is a research organisation based in Gainseville Georgia, presided over by social predictor Robert R. Prechter. Googling something or other, I stumbled across a rather interesting documentary they've made called History's Hidden Engine. You can watch the whole thing online if you follow that link. The film, like the foundation, is dedicated to the idea that "social actions are not causal to changes in social mood, but rather changes in social mood motivate changes in social action".
Basically, Socionomics works a bit like conspiracy theory. They're telling you one thing, it says (in this case, that social actions cause social mood), we can reveal that the opposite is the case (that social mood causes social actions). So let's bracket our more dialectical view (social mood and social action influence each other continuously) and go along for the ride.
What makes the film interesting to me is its determination to find relationships between patterns in unrelated areas. Socionomics believes that human herding (self-clustering) leads to emerging social mood trends, which in turn lead to changes in economics, politics and culture. In other words, it's the very opposite of the classic Marxist view that economic base determines cultural superstructure (not, by the way, the view of later Marxist thinking). For Socionomics, "soft" stuff like feelings and mood is what changes first, carrying the "hard" stuff (the stock exchange, for instance) with it later.
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Naturally, Ralph Rotnem's famous Hemline Theory is very interesting to the Socionomics people. In the late 1960s, Rotnem made a "Hemline Indicator" which correlated the rise and fall of women's dresses to the rise and fall of the stock market. As hemlines rise, he said, so too do stock prices. Thus the best time to buy stocks is when dresses are long, to sell them when dresses are short. This certainly seemed to work at the time Rotnem was researching -- the optimism of the 1960s was reflected in the mini-skirt, the pessimism of the 70s brought in the midi and the maxi skirts, just in time for the sci-fi dystopias of David Bowie, the oil crisis, and punk's "no future". But it also works for the 1920s, with the short skirts of the flappers being replaced by long skirts towards the end of the decade, just in time for the Great Crash.
Robert Prechter from the Socionomics Foundation takes Rotnem's basic insight and widens it. War and horror movies, he says, do well during bear markets. Disney cartoons do badly -- Disney didn't have a single cartoon smash hit between the late 60s and the late 80s, a bear time. The bright colours and optimistic values of Disney work in times when bull markets prevail, decades like the 60s and the 90s.
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This does strike me as accurate. I've now lived through enough decades to notice sharp changes in social mood -- the soft optimism of 60s cinema turning into on-screen blood and darkness in the 70s, the return of war movies in 2000. As people's mood improves, they feel less like fighting, the film tells us. Wars tend to erupt in bear markets (on the second decline, though, not the first).
Naturally, I've felt happiest in those soft, colourful, short-skirted decades when there's an economic boom. As a bull boy born in the 1960s, I've sought them out. When these values seemed to be collapsing in the West, I discovered something similar (well, the short skirts, at least) in Japan. Even my current interest in the art world is probably related to this: the current art market boom reflects 1960s-style good times for the super-rich. It's a boom in a high-Gini bubble, but you can tap into the colour, optimism and extravagance even if you aren't rich.
Now, of course Mr Prechter wants to solidify his position as a marketing consultant by hyping up his ability to foretell social trends. He starts with simple stuff: in bull markets you should be making family fare, happy pop, short skirts, bright colors. In bear markets, concentrate on cutting edge horror, darker colours, longer skirts. It ain't rocket science.
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Where it does all get a bit Economic Metaphysics 101 for me is the argument's next steps. Invoking R.N. Elliot's Wave Principle, Prechter starts finding the same five-step wave pattern in stock market curves and other social indicators -- basically three steps forward, two back. Since the stock market is, according to him, simply "humanity's valuation of its own productive capacity", Prechter relates this to patterns in nature: fractals, the Fibonacci sequence, and the Golden Section. The pattern (three progress, two regress) is the basic form, he thinks, which allows both fluctuation and progress, which is the way nature evolves the forms around us.
This is where wishful thinking, conspiracy theory and "Economic Metaphysics 101" overwhelms the film. When the capitalist system starts getting presented as some kind of mystical natural -- nay, cosmic! -- principle, in tune with nature rather than, all too often, against it, count me a sceptic.
Socionomics, you blew it! You reached too high, too far, too fast! Your stock market is about to crash! Your hemline's hiked so high your theoretical knickers are showing. But thanks for the tingle!
The Socionomics Foundation is a research organisation based in Gainseville Georgia, presided over by social predictor Robert R. Prechter. Googling something or other, I stumbled across a rather interesting documentary they've made called History's Hidden Engine. You can watch the whole thing online if you follow that link. The film, like the foundation, is dedicated to the idea that "social actions are not causal to changes in social mood, but rather changes in social mood motivate changes in social action".Basically, Socionomics works a bit like conspiracy theory. They're telling you one thing, it says (in this case, that social actions cause social mood), we can reveal that the opposite is the case (that social mood causes social actions). So let's bracket our more dialectical view (social mood and social action influence each other continuously) and go along for the ride.
What makes the film interesting to me is its determination to find relationships between patterns in unrelated areas. Socionomics believes that human herding (self-clustering) leads to emerging social mood trends, which in turn lead to changes in economics, politics and culture. In other words, it's the very opposite of the classic Marxist view that economic base determines cultural superstructure (not, by the way, the view of later Marxist thinking). For Socionomics, "soft" stuff like feelings and mood is what changes first, carrying the "hard" stuff (the stock exchange, for instance) with it later.
[Error: unknown template video]
Naturally, Ralph Rotnem's famous Hemline Theory is very interesting to the Socionomics people. In the late 1960s, Rotnem made a "Hemline Indicator" which correlated the rise and fall of women's dresses to the rise and fall of the stock market. As hemlines rise, he said, so too do stock prices. Thus the best time to buy stocks is when dresses are long, to sell them when dresses are short. This certainly seemed to work at the time Rotnem was researching -- the optimism of the 1960s was reflected in the mini-skirt, the pessimism of the 70s brought in the midi and the maxi skirts, just in time for the sci-fi dystopias of David Bowie, the oil crisis, and punk's "no future". But it also works for the 1920s, with the short skirts of the flappers being replaced by long skirts towards the end of the decade, just in time for the Great Crash.
Robert Prechter from the Socionomics Foundation takes Rotnem's basic insight and widens it. War and horror movies, he says, do well during bear markets. Disney cartoons do badly -- Disney didn't have a single cartoon smash hit between the late 60s and the late 80s, a bear time. The bright colours and optimistic values of Disney work in times when bull markets prevail, decades like the 60s and the 90s.
[Error: unknown template video]
This does strike me as accurate. I've now lived through enough decades to notice sharp changes in social mood -- the soft optimism of 60s cinema turning into on-screen blood and darkness in the 70s, the return of war movies in 2000. As people's mood improves, they feel less like fighting, the film tells us. Wars tend to erupt in bear markets (on the second decline, though, not the first).
Naturally, I've felt happiest in those soft, colourful, short-skirted decades when there's an economic boom. As a bull boy born in the 1960s, I've sought them out. When these values seemed to be collapsing in the West, I discovered something similar (well, the short skirts, at least) in Japan. Even my current interest in the art world is probably related to this: the current art market boom reflects 1960s-style good times for the super-rich. It's a boom in a high-Gini bubble, but you can tap into the colour, optimism and extravagance even if you aren't rich.
Now, of course Mr Prechter wants to solidify his position as a marketing consultant by hyping up his ability to foretell social trends. He starts with simple stuff: in bull markets you should be making family fare, happy pop, short skirts, bright colors. In bear markets, concentrate on cutting edge horror, darker colours, longer skirts. It ain't rocket science.
[Error: unknown template video]
Where it does all get a bit Economic Metaphysics 101 for me is the argument's next steps. Invoking R.N. Elliot's Wave Principle, Prechter starts finding the same five-step wave pattern in stock market curves and other social indicators -- basically three steps forward, two back. Since the stock market is, according to him, simply "humanity's valuation of its own productive capacity", Prechter relates this to patterns in nature: fractals, the Fibonacci sequence, and the Golden Section. The pattern (three progress, two regress) is the basic form, he thinks, which allows both fluctuation and progress, which is the way nature evolves the forms around us.
This is where wishful thinking, conspiracy theory and "Economic Metaphysics 101" overwhelms the film. When the capitalist system starts getting presented as some kind of mystical natural -- nay, cosmic! -- principle, in tune with nature rather than, all too often, against it, count me a sceptic.
Socionomics, you blew it! You reached too high, too far, too fast! Your stock market is about to crash! Your hemline's hiked so high your theoretical knickers are showing. But thanks for the tingle!
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(no subject)
Date: 2007-12-17 10:07 am (UTC)Shots of Prechter's press cuttings from the 80s in the documentary seem to indicate that he began as a follower of Rotnem rather than Elliot, though. In other words, the founding insight for him seems to be the pop culture-stock market correlation, not the five-step wave. (This could just be what editors chose to focus on in articles, though.)
This makes sense: it's that sort of thing which would actually make you a sought-after market analyst. The Elliot Wave stuff, especially when you tie it in with Fibonacci and fractals and all the rest of it, rapidly gets too cosmic and pretentious to serve any practical purpose. It smacks of pattern-finding for its own sake.
(no subject)
Date: 2007-12-17 11:12 pm (UTC)Bob Prechter's god is the Elliott wave theory. Since the theory is only really useful if it is predictive and since it ought to be able to describe human activity in any area where trends are apparent, Rotnem's observations were very attractive to him. If you want to make money convincing people to buy something then you have a lot of time to do that because, in theory, the price could go to infinity so it is never too late to buy. However, something you own can only lose 100% (unless you want to get into Xeno's arrow paradox) so if you want to suggest people sell it then you ought to get there early. Ideally, before the price has started to fall. Prechter's interest, then, was in finding early indicators which suggested that the kind of mood which would take stocks lower was already in evidence elsewhere. He wasn't saying " A causes B" but rather "A in some way causes B and C and, since I can see B now, C will surely follow because A is here". Quite what "A" might be is not clear: you can't say "zeitgeist" because that would be a circular argument.
In finance, most market moves are described by some kind of narrative: "The Chinese are taking over the world", "People have lost confidence in America" or "The Jews control everything" etc. Prechter is trying to predict moves before the retrospective narrative appears so, in effect, he is trying to create his own narrative to explain what will happen. The problems come when his predictions are wrong. I suspect socionomics is an attempt to find some meaning in all these relationships in the hope that they can all be reconciled as "A" if his predicted outcome materializes. It woldn't be he first time that someone claimed "I was right, but too early" while the reasons they thought they were right actually had little to do with the eventual outcome.
(no subject)
Date: 2007-12-18 01:11 am (UTC)Isn't that the task and the lot of all predictors, though? All narrative is retrospective, and all prediction is an attempt to pre-guess it. Anyway, couching market prediction in terms of narrative reminds me of my brother's work (http://www.princes-ti.org.uk/Events/detail.shtml?id=1448573021):
"His recent work has been concerned with time and narrative, and particularly with forms of knowledge about time that have developed in contemporary fiction. He recently published About Time: Narrative, Fiction and the Philosophy of Time (Edinburgh University Press, 2007), and is currently working on a book called The Unexpected, both of which explore issues of anticipation and prolepsis in relation to contemporary fiction and the philosophy of time."
(no subject)
Date: 2007-12-18 10:09 am (UTC)