The hemline theory goes cosmic

[imomus]

In 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!

Comments

[(Anonymous)]

Prechter began as a stock market analyst who used the Elliott Wave theory. His most famous "call" was the 1987 crash but he lost his reputation over the next twenty years as he repeatedly predicted a major bear market when none occurred except in Japan. Rather than being the "next step" in the argument, Elliott Wave theory is his premise and socionomics a means to discover relationships to support his conclusions. His team used to use a chart of equity indices plotted against the inverse of the number of annual nuclear tests worldwide to show how an increase in tests was correlated with weaker stock markets. Like many of the indicators he selects, this relationship broke down almost as soon as he had identified it.

[imomus.livejournal.com]

Thanks, Tokyo person, you sound very well-informed on this!

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.

[imomus.livejournal.com]

There's an interesting TED lecture (http://www.ted.com/index.php/talks/view/id/197) in which Philippe Starck touches on some of the same themes as this entry. He says he's ashsmed to be a designer in times of war and darkness (like now) and contrasts it with the 80s, which he said were a relatively peaceful time, a time of progress and light. In times of darkness you can forget art, forget design. Only politics and activism count. But his view is that evolution represents a positive curve, even if, when you zoom in on bits of it, they look more jagged, with more dips into negative territory. That corresponds to the Elliot pattern: three steps forward, two back.

[kumakouji.livejournal.com]

"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."

You've confused nature ie. "the forces and processes that produce and control all the phenomena of the material world" (natural order) with Environmentalism.

but before I get into that, America has yet again come out looking extremely bad in regards to the Bali deal and environmentalism:

"The European Union had asked for greenhouse gas cuts of 15% by 2010. Gore's team drove them down to 5.2% by 2012. Then the Americans did something worse: they destroyed the whole agreement. Most of the other governments insisted that the cuts be made at home. But Gore demanded a series of loopholes big enough to drive a Hummer through."

I used to think Trey Parker & Matt Stone's depiction of Gore as a delusional, self-serving whiner obsessed with manbearpig (http://www.southparkzone.com/episode.php?vid=1006) on southpark (a parody of his obsession with enviromentalism) was a little harsh. Now, I'm a lot less sympathetic.

Back to my original point: Just because something isnt "environmental" doesnt mean it goes against the natural order. Environmentalism is a human-centric view of how the world should be in order for it to be beneficial for us. In the grand scheme of things, mass extinction and destruction mean nothing to the universe, its neither good nor bad. You cant destroy energy, it just reforms, and will continue to do so outside of our value system. Humans are a part of nature, we are natural. All of our actions are part of the natural order. We are not above it.

That said, I agree the "three steps forward, to steps back" theory is an example of social commentators trying to find pattern where there isnt any.

[dr--ben.livejournal.com]

I guess it's the usual thing of whether an observed correlation = causation, which epidemiologists like Bradford Hill (cigarettes cause cancer) have thought about for a long time:

http://www.google.co.uk/search?q=bradford+hill+criteria

The Bradford Hill criteria include things like plausibility of mechanism, consistency of observed relationship, temporal r'ship (eg short skirts first, then boom), etc

More than anything I find it completely inspiring that these people managed to construct a whole institute around the idea, but I wonder if that might be another example of post hoc statistical reasoning after his one good call.

In the city of London, where people I went to college with cheerfully make 30 times more money than the people who sell them coffee, those who make good predictive judgment calls (and have appropriate social skills) rise up through the ranks and stay in the financial industries. Undoubtedly some of them are very good at predicting market activity, but then, so are their competitors who fall by the wayside.

My suspicion is that often, those who are elevated are simply those who happen to have made a good call by accident, with mythologies constructed around their amazing trendspotting powers, like an industry led by people who have rolled a few more double sixes than their colleagues, worshipped as ludo gods.

[(Anonymous)]

the 80s, which he said were a relatively peaceful time, a time of progress and light.

Perhaps that was the way it felt under Mitterand; it certainly didn't feel like that under Thatcher. If the 80s were so lovely, why did its art students turn out to be death-obsessed YBAs?

[imomus.livejournal.com]

I find it completely inspiring that these people managed to construct a whole institute around the idea

Well, we don't know how big his "foundation" in Georgia is -- perhaps it's just his house, plus video-making facility. My dad once started a language college in our house and called it a "foundation"!

those who are elevated are simply those who happen to have made a good call by accident,with mythologies constructed around their amazing trendspotting powers

Those mythologies are at least constructed by their colleagues, based on observations of their successes. I think it's part of Prechter's problem that he attempts to make his predictive pattern-spotting a little too inherently mythological by hitching it to fractals and conspiracy theory ("history's hidden engine") all the rest of it, when in fact what he's offering is just an extension of the hemline theory. He builds cosmic order into his theory at all levels, and is surely therefore guilty of self-mythologization, teleology, and metaphysical ambitions.

Marketeting gurus seem to be some of the most pretentious people around these days, which I suppose is why I find them interesting. Chutzpah is always interesting.

[imomus.livejournal.com]

This gets circular, though. If you define man as part of nature, then anything we do is "part of the natural cycle", even if it involves torching everything non-human with a flame-thrower.

If you want to be pedantic, call Prechter's mistake that of connecting human patterns to non-human ones and, more importantly, justifying human production and consumption patterns by pointing to the very non-human ones we're actually in the process of decimating. This legitimates a machine (the human industrial machine) which is actually -- most of the time -- at odds with the non-human world, even at war with it.

[dr--ben.livejournal.com]

absolutely, and the commonalities between the wishful thinking style of quack therapists, PR consultants, political advisors, financial advisors, and more are fascinating.

all offer layers of reassuring system and certainty in an unpredictable and anxiety provoking world, generally constructed around one authoritative and charismatic leader.

[imomus.livejournal.com]

Well, we don't really have rock stars these days, I guess someone's got to step into the breach!

[kumakouji.livejournal.com]

It doesnt get "circular" at all. you're just defining "destructive" human activity as outside of the realms of nature and it doesnt work like that. Life isnt a Disney movie with wicked poachers and "evil man-made" robotics vs. the trees and forest spirits. Thats a populist, dualistic view held by people with simplistic interpretations of the world around them. We're not gods with the unearthly power of destruction. Nature is just as destructive, as has been seen with the extinction of the dinosaurs. destruction and creation are just value judgments made by humans, in the grand scheme of things energy cannot be destroyed and will reform and reshape long after we're gone.


Seperating Humans and nature is a fallacy, used not just by the left but the right to justify and argue for all sorts of things.

Right winger:
"Genetic engineering is wrong! its against nature!"

Translation:
"Ive failed to recognise that almost every aspect of my life is only possible as a result of humans manipulating their environments. I've failed to see that I'm still just a mammal and that as a mammal all of my actions are part of the nature order."

Left winger:
"We need to stop killing the planet! We're destroying the planet!"

Translation:
"I have a totally human-centric, self-centred view of the universe. I fail to recognise that life has already been "destroyed" on this planet thousands of times over through the course of evolution and "natural disasters", and its all part of the circle of life."

Someone whos not caught up in sentimental rhetoric would argue "I agree that technology has the power to improve the wellbeing of human life. However, caution and thorough analysis of the effects is imperative." or "We need to make sure that the enviroment is always hospitable for humans, that is a top priority."

People separating humans from nature is one of my biggest pet hates. There is no "war with the non-human world". Nature isnt thatched cottages, wind turbines, solar panels and trendy environmental design conferences. Whats happening is we're getting to the stage where we might end up causing ourselves harm through our actions, and we need to stop.

[kumakouji.livejournal.com]

Werent the 80s a time of mass hysteria over nuclear warfare? Have you ever seen threads (http://en.wikipedia.org/wiki/Threads)? It doesnt get anymore bleak than that and that was the sort of shit 80's nuclear hysteria manifested as.

[lord-whimsy.livejournal.com]

If you define man as part of nature, then anything we do is "part of the natural cycle", even if it involves torching everything non-human with a flame-thrower.

You mean like when the American Indians and Australian Aborigines would set fire to huge tracts of land to flush out game, helping to create over the centuries places like the Great Plains and the Outback?

It's all nature, Nick--we're in the diorama too, right alongside the caribou.

[imomus.livejournal.com]

There is no "war with the non-human world"... we're getting to the stage where we might end up causing ourselves harm through our actions, and we need to stop.

But stop what, if you don't want to draw any distinction between us and nature? Beating ourselves up? But that's just what nature does, right? It's destructive, and we're part of it, right?

[kumakouji.livejournal.com]

Youre mixing up your subectivism with your objectivism... again.

Objectively, life will be created, life will exist, and life will be destroyed and that cycle will continue for eternity within the universe.



Subjectively, I dont want to live in a world with acid rain, poluted airs and seas, without beautiful animals like tigers, etc. I want to live in a cleaner world.

[imomus.livejournal.com]

No, we made the diorama, killed some animals, stuffed them and put them in there. Something that no other animal does, and that we can use either to study, learn from, manage and conserve our victims, or point at the last one, laughing and mouthing "Sucker!" through the glass.

[imomus.livejournal.com]

I'm just pointing out that you're in danger of saying something like "Nature needs to stop nature from doing the destructive thing that nature does."

[kumakouji.livejournal.com]

In future I'll put objectivism in blue and subjectivism in red ;o)

[kumakouji.livejournal.com]

If we made the diorama, what did the dinosaurs make?

(Dinorama isnt an acceptable answer...)

[imomus.livejournal.com]

The 80s was startling -- going from this

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to this

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more or less overnight. And yes, I could have demonstrated that using the same band (which was the first New Order track Barney whooped on? "Everything's Gone Green"?).

[butterflyrobert.livejournal.com]

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.

I was thinking the exact same thing. Of course there are folks who will say that humanity's all/self-destructive stupidity is "Natural".

Naturally, I've felt happiest in those soft, colourful, short-skirted decades when there's an economic boom.

I feel this way, too. Soft, colourful living is the only life I desire.

[butterflyrobert.livejournal.com]

(Dinorama isnt an acceptable answer...)

Dang.

[butterflyrobert.livejournal.com]

The 60's were both: a decade of war and darkness and a decade of optimism and light.

A bust is a must

[(Anonymous)]

Has the monochrome zeroes (not monochrome enough, still too many chromo-stragglers waving a rainbow like voodoo) been a kind of ‘seeing sense’ through Socionomics? It is not the 60s. If we keep positive, keep the colours and confident talk and youthful smiles on magazines, then the economy will flourish, which simply means rents and house prices going up and consumerist landfill reaching the sun. A boom is not good, a bust is absolutely a must.

[rakehell.livejournal.com]

I once read a financial news article saying that the hemline theory is one of many "trailing indicators" meaning that you really can't profit off them. The stock market tanks prior to hemlines lowering, in line with a trad Marxian view that base determines superstructure.