It's clear that right now we are in a moment of upheaval and turbulence, that seems to have come upon us very quickly.  Pretty much everyone I know has been wrestling to unpack this for the past several months. I've been trying my best to understand the worldview of Steve Bannon, who is clearly an ideological center of this administration.  For those who've also been on that quest, I recommend an article from this week's Washington Post, Where did Steve Bannon get his worldview? From my book, written by historian Neil Howe. Howe, along with co-author William Strauss, in 1997 published The Fourth Turning: An American Prophecy - What the Cycles of History Tell Us About America's Next Rendezvous with Destiny.  This book has been a major influence on Bannon, and the gist is that history is neither linear nor chaotic, but rather cyclical. From the article:

"We reject the deep premise of modern Western historians that social time is either linear (continuous progress or decline) or chaotic (too complex to reveal any direction). Instead we adopt the insight of nearly all traditional societies: that social time is a recurring cycle in which events become meaningful only to the extent that they are what philosopher Mircea Eliade calls “reenactments.” In cyclical space, once you strip away the extraneous accidents and technology, you are left with only a limited number of social moods, which tend to recur in a fixed order."

Strauss and Howe define 4 "turnings" of the cycle, each lasting roughly 20 years: first a "High", characterized by collective energy (think: post WWII boom), second an "Awakening" where the next generation seeks higher values (think: 60's counterculture and the civil rights movement); third, an "Unraveling", where institutions are distrusted and individualism is high (think: 1920s and 1990s), and finally a "Crisis", where "institutional life is reconstructed from the ground up", in response to a perceived existential threat. For those of us at USV, this general concept of cycles rings true.  The firm's original investment thesis was deeply influenced by the work of economist Carlota Perez, and her theory of "technical revolutions" as described in the book Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages.  Perez also describes a 4-part sub-cycle, with each overall "revolution" lasting roughly 80 years:

At USV, we spend a lot of time discussing this cycle, especially as it relates to the nature of the internet/tech market, and which parts are expanding and which parts are consolidating -- for example, we're clearly in the deployment phase with regards to the web platform and app ecosystem, while the blockchain may open the door to another market expansion. But the larger point here is that it absolutely feels like we are at a pivot point, one way or another -- a transition point in the cycle.  My colleague Albert has chronicled this extensively on his blog and in his book World After Capital, where he argues that we are at the transition between the industrial era (where capital is scarce) and the information era (where attention is scarce).  An important point that Carlota makes is that as each revolution sets in, it brings with it not only new technological underpinnings, but also a whole suite of cultural, legal and institutional changes:

"The new paradigm eventually becomes the new generalized ‘common sense’, which gradually finds itself embedded in social practice, legislation and other components of the institutional framework…”

Both Perez and Strauss/Howe note a period of "turbulence" between cycles -- and in the case of Strauss/Howe, this is more than just a momentary blip but rather the entire fourth "turning", which is crisis.  This is the part that's so obviously scary -- of course, as the fundamental underpinning of the economy change, that changes everything, causing real trauma. Right now maybe that's expressed as immigration policy and nationalism, but really it's more about the impact of information technology on jobs and the economy. One thing I still don't have a clear read on is that Bannon's apparent effort to "deconstruct the administrative state" feels like an explicit attempt to hasten the development of the cycle, while the broader Trump campaign branding and agenda ("make America great again") feels like an attempt to slow down this transition, bring things back to how they were. It feels clear to me that the attempts to put the information era genie back in the bottle will be futile -- we have turned the corner to a global, connected world.  But in the meantime, economic nationalism is a natural response to that, especially in lieu of a clear policy and political vision that embraces the connected world, but distributes the costs and benefits more equitably.

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