Neil Howe is a historian, economist and demographer who writes and speaks frequently on generations, the economy and social change. He is America’s leading thinker on who today’s generations are, what motivates them and how they will shape the nation’s future.
He has authored nine books on American generations, many co-authored with William Strauss, including Generations (1991), The Fourth Turning (1997), Millennials Rising (2000) and, most recently, Millennials in the Workplace (2010). In relation to The Fourth Turning, the Boston Globe wrote “If Howe and Strauss are right, they will take their place among the great American prophets.” He has also authored numerous books and policy reports on demographics, most recently The Graying of the Great Powers (2008).
He is a senior associate at the Center for Strategic and International Studies, where he helps lead the Global Aging Initiative. He holds graduate degrees in history and economics from Yale University.
Erico Tavares: Neil, we are delighted to be speaking with you today. Your work has influenced many people over the years, including us. We read the “Fourth Turning” many years ago, and had almost forgotten about it. Then 2008 happened and we felt that this time was indeed different. Upon re-reading your book we were stunned by many of the things you had predicted over a decade ago. For the people less familiar with your work, could you briefly describe what a Fourth Turning is, which as we understand it results from a specific generational sequence that you have identified?
Neil Howe: A turning, as you define it, is a unit of history which is roughly the length of a social generation, about 20-23 years long. We identified these units looking deeply at the history of America and of other countries around the world, and originally discovered this idea of turnings by analyzing the generational history over many centuries. What we noticed is that not only social generations are very different, they also tend to arrive in a certain pattern, a certain order. Certain types of generations always follow other types. And this in turn is connected to a certain order and rhythm in history itself.
For example, America’s great crises – certainly our greatest total wars – have arrived in our history roughly at intervals of a long lifetime, including the War of the Spanish Succession, the American Revolution, the Civil War all the way to the Great Depression and World War II. That’s kind of the sequence.
These are the great Fourth Turnings of American history. And we call them so because of where they are in a cycle of different mood shifts that we observe. The Second Turnings by contrast happen almost in between these crises, and that’s when you get the great awakenings in American history. These are the great cultural upheavals.
So in a Fourth Turning we remake the outer world: the economy, politics, empire, technology, infrastructure… In Second Turnings we remake the inner world: religion, values, art… This basic yin and yang of looking at a multiplicity of social trends is something you don’t notice unless you are looking at all of it. And once you do, you can see how these intergenerational patterns move to the same beat.
I should also add that within this cycle there is an interaction between how different generations are shaped in childhood, coming of age when they are young. They then become parents and leaders as they reach mid-life and then go on to shape history, which in turns shapes the youth of a younger generation. You can see how that works. It’s a fully integrated and complete cycle.
And it's one of the few cycles – whether you are talking about war, realigning elections, cycles in family life or the long cycle in the economy – whose periodicity is strictly determined by the phases of life of a human being. One of the problems that long cycle theorists have had, be it 60-year or 100-year cycles or whatever, is that they often wonder what governs these cycles. Why isn’t it 2 years or 5 years?
So our research shows a connection with the biology of human life.
ET: Yes, many historians, economists and even politicians have studied the cycles of history, and you are correct, they tend to link these cycles with nature and in some cases more obscure things like planetary movements. What your work has revealed in some fascinating detail is that they are in many cases driven by the different generations as they come and go. Each generation tends to be different from the one that preceded it. We tend to think of society as a continuation but this is generally not the case, as you point out...
NH: Yes, each generation tends to be different not only because they are so encouraged by their parents but also as a reaction against the world created by the mid-life generation in charge. And that leads to a constant turning in the direction of each new generation. We actually identified four different kinds of generations, each coming of age in one of these different turnings we talked about. The ageing of each generation into a new phase of life is what gives each of these turnings its distinct mood and emotional feel.
ET: In fact you were the first to coin the term “Millennials”, which groups that generation of people born from the 1980s onward...
NH: Yes, that’s correct. That was in our 1991 book “Generations”. The oldest millennial alive then was only about 8 years old. It is interesting to remember that at that point Gen X-ers did not even have a name. The book that named that generation, Doug Coupland’s “Generation X”, was still a year away from being published.
And so, if Gen X-ers already don’t feel bad enough about their lives, they can reflect on the fact that the generation that came after them was named before theirs was!
ET: That’s right! As Gen X-ers ourselves we had never thought about that…
NH: Well, they did a study a few months ago on which generation was referred to the most in corporate earnings calls over a certain recent time period. The #1 was Boomers, right behind them were the Millennials – in fact only just behind them, and #3 were Gen X-ers – way, way behind.
I get this complaint a lot from Gen X-ers and I think it is legitimate. People have never quite paid attention to their generation coming in between.
ET: Do Fourth Turnings always occur after Third Turnings, or are we merely speculating about a potential generational outcome?
NH: Historically the answer is “yes”, it always comes in that order. In fact, the regular nature of the order is really striking. I’m not an historical determinist, in the sense that certain events or catastrophes have greatly shaped turnings in the past – for instance, in the 19th century we had a very quick turning during the Civil War, and we see similar patterns in other countries as well – so we are not saying that the length and the order of the turnings is exact. But the overall pattern is overwhelming.
I think that today most Americans are aware that we are in a social mood much more similar to the 1930s – and we can go through many other parallels – than the 1950s, the 1960s or even the 1970s.
ET: And typically how long can such a turning last? You mentioned about 20-23 years.
NH: Well, that has the same variability as the generations themselves. They can vary from 18 years to maybe about 23 years. It can be longer or shorter depending on the accidents of history, but overall it is aligned with the basic cycle of life of most people. It keeps coming back to that governor of time. So it can vary, kind of like the seasons. Spring can come a little earlier one year, Winter late in another.
When we talk about periodicity, this is not a simple physical system like a planet orbiting around the Sun, which is very exact. This is more like a complex system which has different factors at play, regressing or being attracted to a certain kind of periodicity. This is typical of such complex systems. And obviously human society is a complex system.
ET: Within the limitations that you just described, we can reasonably predict when those “turnings” are likely to occur, but not the magnitude of the turning in terms of socioeconomic changes. When we look back at history some turnings were very profound, others less so. Is this correct?
NH: Yes, and I also think that the sense of urgency of a Fourth Turning and how the outer world and the world of institutions is reconstructed, can differ from one turning to another.
Now, it is true that all the major wars in American history have always arrived in a Fourth Turning, but I don’t see it as necessary that a Fourth Turning requires a total war. It could be some other sense of urgency pushed by, for instance, economic necessity.
The sense of collective urgency to solve a dire problem which is perceived to threaten the very future existence of this society is something that Fourth Turnings do have in common. That is not necessarily a war, but I think it will be something with a strong collective incentive for society to act in a way that it wouldn’t otherwise have in other turnings.
ET: What type of economic conditions are typically associated with Fourth Turnings? You established a parallel with the 1930s which was a very challenging time with the Great Depression and the like. In addition to that societal objective, that urgency, are there any economic factors that tend to occur in a Fourth Turning?
NH: We looked very broadly at this. The 1930s was a decade of deflation, competitive trade wars, chronic underemployment of workers and capital, all of which are being experienced today. Alvin Hansen, who was the great popularizer of John Maynard Keynes in America, in 1937 coined the term “secular stagnation”, which has been recently revived by Larry Summers today.
And you look too at some of the demographic phenomena going on: declining migration rates – we’re certainly seeing declining immigration in the US over the last few years, declining fertility rates, declining mobility (people moving around)...
And some of them are not negative at all. Some of them are positive in fact. One of the things we’ve noticed is that from the early 1930s into the 1940s there was a pretty dramatic decline in crime. That is something that we have experienced over the last 15 or 20 years, in fact a very substantial decline in youth violence, which is one of the hallmarks of the Millennial generation – how risk averse they are and how little violence we see from this generation.
You can go across a long list. Another interesting parallel is really an incredible shift that we see in America over the last 20 years towards the great strengthening of the extended family. Back in 1980 only 11% of 25-34 year-olds lived with their parents or other older family members. Today it is 23%. We have tens of millions of young people living in extended families. This is something that we also saw in the 1930s. In both cases it is partially motivated by the economy, but also because the generations personally got along very well.
It is a complete closing of the generation gap on values. This is something we have always seen in Fourth Turnings.
ET: That is fascinating! So based on everything that you are describing, are we already in a Fourth Turning? And when did it start?
NH: 2008 is when it started. We had many readers and people who came up to us and said, “Well, it actually started in 2001” and we’ve always said “No!”
Part of the reason is that we can time turnings by looking at generational ageing, and typically a turning begins just after each generation reaches a certain age because they enter a new phase of life. In 2001 that’s too early because Millennials weren’t really coming of age into their adulthood, Boomers weren’t fully retiring and Gen X-ers weren’t entering mid-life. So we thought the timing was off.
We believe 2008 is a much better political and economic divide and will eventually be perceived as such. We perceive these turning points in history better in retrospect than we do up close.
ET: We understand why many people think that 2001 is the critical turning point because after 9/11 America was never the same again, both domestically and abroad…
NH: I think that mainly abroad. But in terms of the differences since 2001, we still had a bubble psychology in the economy very much alive and it did not take much to come back to that by 2003-04-05-06... And we also had almost like a celebrity circus, kind of a roaring 1990s tone in our household finances and how people were looking to the future.
I think all of that has really shifted. It’s only after 2008 that issues like standard of living growth, income inequality and fundamental doubts about the ability of America’s economy to recover, came to the forefront, as well as much longer term questions about geopolitical anarchy.
By the way, here’s another interesting parallel with the 1930s: a world that no longer has any great power or congress of powers ruling over it anymore. Back then this happened after the collapse of the League of Nations. We see that today nobody is running the world any more. We see authoritarian regimes doing what they want in their own neighborhoods.
This has come back to cast a great shadow of doubt to both political leaders and investors.
ET: The commonalities are indeed striking when we look at history from your vantage point. Today we benefit from insightful research that people like yourself have conducted over many years, so we can get a sense of what’s potentially ahead; perhaps people back then were much less aware. And yet we still seem incapable of changing course. There is just too much momentum, too much political bickering and too many opposing forces preventing us from reaching a consensus, or so it seems. This may make all the ramifications of a Fourth Turning even more likely. Do you agree with this?
NH: Yes, in fact one of the aspects of a Third Turning is that nothing much really happens in public life. You look back at the 1990s, certainly after the end of the Cold War, what happened politically and legislatively that was really important? Even up until the Great Recession, what happened?
But after 2008 we saw last minute measures being implemented with desperate expedience, to keep the economy afloat. It’s amazing if you look back at the prior 20 years how little we have done in any way to legislate and form a collective public policy to change even the basic direction, or just adjust the direction, of our country.
This is typical. We have seen eras like that before in American history and what happens – and what people forget – is that public history does not always move in the same way. Decades go by and then suddenly certain events hit, and everything changes on a dime. Huge changes occur! And it’s almost like a seismic event, you know, suddenly the tectonic plates collide…
ET: A tipping point is reached…
NH: Right. And suddenly too. You often find that one generation’s power – its senior leaders – ebbs and another generation takes over the day after. What we will see now is a time when Boomers ebb and Millennials suddenly discover that they are actually running things, setting agendas and the like. And I really think that is the next major change for the country we are going to see.
Millennials are much more collective in their orientation and they are much more optimistic about the future. We do a lot of surveys on political attitudes by age and Boomers are by far the most pessimistic of all generations and the most apocalyptical in their values and orientation. Whereas Millennials are much more practical, collectivist and much more optimistic about how things are going to turn out.
This is the kind of generation that typically rises right around the time a Fourth Turning occurs. And again the last time this happened was in the 1930s. What was the new generation that everyone saw coming of age? It was the G.I. generation which was chronically optimistic. As kids they went to see Mickey Rooney in Hollywood movies; they accentuated the qualities of their own generation.
After World War II ended, their Boomer kids eventually began to hate the positivism of their fathers, the G.I.s... But we forget that during the 1930s it was that generation that added hope for the future and held the nation together through that period of crisis.
ET: It seems that Millennials will have a very busy schedule indeed, given our current predicaments... We talked a lot about the US, but you have also looked at other countries around the world. Is Europe in a cycle consistent with that of the US from a generational standpoint?
NH: Yes, we see Europe reaching as far as Russia, the English-speaking world and East Asia all having strong generational parallels.
They all had their World War II generation – probably because that and the Great Depression were global events. And they all had their silent generation, the little kids of World War II, which gave birth to leaders like Jacques Delors in Europe who constructed the European Union as a way to contain war. That was something which that generation never wanted to see again.
We have Boomers in America, who were certainly huge in Europe – the 68-ers in France and Germany and the euro communism youths – which embodied the clashes and terrific problems with their parents. In China this is the Red Guard generation…
ET: So even China is following the same cycle?
NH: Yes, think about it. Our G.I.s were their Long March generation which was a huge civic generation, our Boomers were their Red Guards, which basically tried to destroy 2000 years of culture and replace it with something new. It is very similar.
Today, we talk about our Millennials, China talks about their Little Emperors, you know, the generation which never tasted bitterness, who are incredibly positive about the future and who trust their parents to educate them and wanting to join something big – the China Dream.
We’re seeing this play out in the Far East in ways that are both fascinating and at times a little disquieting. Every major Asian power is now governed by a leader who has no memory of World War II. That’s true for Modi in India, Shinzo Abe in Japan, Xi Jinping in China and Park Geun-hye in South Korea.
And this is the old lesson of Arnold Toynbee, of what he calls the great war cycle that arose every 80 years or so: it’s when the generation who doesn’t remember the last great catastrophe finally become the senior leaders.
You look at what is going on in Asia and you sense a lack of that collective risk aversion that you saw with older leaders who did remember some of the terrible things that happened earlier in the 20th century.
ET: That’s an incredible insight. Is there any country or region right now that is in more optimistic turnings at this point?
NH: I don’t see it as more or less optimistic. You know, a Fourth Turning is necessary, it’s both good and bad. I like to emphasize that to people. In some ways it is like a forest fire: it burns away the brush and allows new seedlings to grow.
ET: Well, you are talking to a Gen X-er who by definition are pessimistic…
NH: Well, look at it this way! If the S&P500 were to come down by 50% - and, my God, if we have a reversion to the mean in corporate earnings as well as a decline in some of these lofty PE valuations this might actually happen – look at the bright side. The Millennial generation can finally buy into America’s future at a good price. Look at what they are facing right now: very little return on their savings and very lofty prices that they have to pay to invest in their future.
So we often forget that these wrenching dislocating financial events, particularly for older generations, can create opportunities for the young, and often create space for something more durable for the times to be built.
I think we are going to see a lot of creative destruction both politically and socially. In fact we are seeing it this week with Grexit becoming widely recognized as more probable than not. I think this will lead to an unravelling of Southern Europe from the Euro and I think that the heightened tensions – from the Middle East to Putin’s Russia to the Far East – and again the fact that nobody is in charge, not even pretends to be in charge, will create problems.
For those of us remembering earlier times, this is disquieting, disorienting... I think better things will grow out of it, in fact they have to. Right now the youth of the world in the midst of these tensions are not happy. Their needs are not being met from the systems that are in place.
So I’ll just summarize it with Schumpeter’s phrase: creative destruction. That’s how I prefer to see what happens in a Fourth Turning.
ET: Actually another field that we believe urgently needs some creating destruction is mainstream economic thinking. One thing that is striking about your work is how accurate you have been so far in advance. And yet – not wanting to pick on anyone in particular – very few mainstream economists could see 2008 coming, if any. Is a deeper understanding of demographics and this generational interplay what is lacking in mainstream economics today?
NH: Oh, there’s so much to talk about mainstream economics, I really would not know where to begin…
ET: If you had to pick one thing...
NH: I would say in general the narrowness of the way economics is now taught and published and its inability to embrace a much more multidisciplinary way of bringing in the other social sciences is a big limitation the longer it comes to looking into the future.
ET: One of your companies publishes research which is widely read by top hedge funds and institutional investors. Is this based on the work that you have done over the years to enhance our understanding of possible economic, financial and societal outcomes, particularly in light of the limitations of mainstream economics?
NH: Yes, our company Saeculum Research publishes research to institutional investors.
By the way “saeculum” is the Latin word for century, but in this derivation not so much referring to 100 years but rather the Etruscan meaning which is a long human life. And we introduced that word in our book The Fourth Turning to describe the full cycle. You can sort of get my picture – the four seasons of a person’s life.
To our clients at Saeculum what we focus on is – more important to them than the long cycle – insights into how breaking generational changes at this moment are reshaping individual industries, from airlines to hospitality to artificial intelligence to big data. So we are looking very closely at people’s behavior, consumers, workers and investors, and looking at how a longer view helps us get a much more accurate fix on how things are changing this year and impacting the various brands and companies that they are investing in.
ET: That’s fascinating work. In addition to your books, which we vividly recommend, is there a site where people can go to get your latest insights and updates on your thinking?
NH: They can go to our website and sign up to a free newswire, where we are constantly alerting people, daily or weekly at their wish, on demographical and generational events and news and reports that we find interesting. There are also a number of links to publications that we have done, my own opeds and other things that we have written. So it’s a very important portal for entering into our world.
ET: Neil, this has been fantastic. Thank you very much for taking time off your busy schedule to talk to us. All the best with your work – hopefully the Fourth Turning will turn out to be OK!
NH: We certainly hope so! Thank you.