Air Force Major Writes About Socionomics and America's Economic and Military Future

[CrackSmokeRepublican]

Air Force Major Writes About Socionomics and America's Economic and Military Future
August 16, 2007
Maj. Tyson Hummel of the Air Command and Staff College, Air University, Maxwell Air Force Base has written a fascinating report that applies Socionomics to an analysis of America's economic and military future, titled "Is the Science of Socionomics Able to Portend a Change in the United States' Economic Might?"  Maj. Hummel studies the fall of previous empires and offers some views on how the past might relate to America's future.

http://www.socionomics.net/conversations/default.aspx

http://elliott.vo.llnwd.net/o18/sociono ... hummel.zip

[CrackSmokeRepublican]

What is Socionomics?
(An Interview with Robert Prechter, Executive Director of the Socionomics Institute)
 

Causality

Q: In a nutshell, what is socionomics all about?
RP: Socionomics is the study of social action that expresses social mood. Social mood arises endogenously from unconscious herding impulses inherited through evolution, and is patterned according to the Wave Principle.

Q: Endogenously, meaning that nothing impacts social mood?
RP: Right. No outside forces change the trends and patterns of social mood. This idea is counter-intuitive, but our studies demonstrate time and again that even the most dramatic news events do not change the dynamics of stock pricing, which is our measure of social mood. A positive mood motivates people to produce more, act peacefully with their neighbors, purchase uplifting entertainment, etc., and a negative mood motivates the opposite actions. So mood shapes economic, political and social trends. Most people think that social events cause the public's mood to change, but it's the other way around. This idea is the basis for what I call socionomics.

Q: How then can you explain the depressed mood after 9/11? It seemed the event put a gloom over everyone, which is contrary to what you're saying? Was that an aberration?
RP: On the contrary, it is exactly in accordance with socionomics. People had been getting gloomier for a full year and a half before the attack, not after. Six trading days after the attack, social mood improved non-stop for half a year to a far more optimistic level than it was at the time of the attack. The positive trend showed up in stock prices, consumer sentiment and measures of advisor and investor optimism. When the event occurred, people unconsciously latched onto it as an explanation for their waxing gloom. "Ah, there's a reason!" But if the attack really were the reason, then it should have occurred when optimism was strong and preceded a change toward pessimism. That's not what happened. All our studies show that mood trends, as revealed by the stock market, precede compatible social actions. So you can't use social actions to predict the stock market, but you can use the trends in the stock market to predict the character of social actions.

Q: Why then do people believe that social events impact social mood?
RP: Because people's brains naturally default to mechanics when they think about social events. Knowledge of mechanics has helped keep the species alive. We know that an object in motion will continue in motion unless acted upon by a force. So we duck when a rock is thrown at us and we swerve out of the way of a drunk driver who is drifting across the median. So people assume, with deep conviction, that any change in the stock market's direction must have been caused by some outside force. If they can't find one, they make one up. That's what the newspaper writers do every day after the market closes. But the stock market is not an object in motion, and outside forces are not required to change its trajectory. Unlike rocks, people have minds, and they can change them. In fact, they do change them, all the time, in accord with the impulse to herd. That is what moves markets. It's also what makes markets patterned. Herding is not rational, but neither is it random. It trends and reverses by its own dynamics.

Q: Are the effects of crowd psychology more pointed when we find ourselves in a more turbulent and critical era?
RP: Crowd psychology creates peaceful eras and turbulent eras. After the mood has trended positively for a longtime, peace reigns, as it did in the 1920s, from the mid-'50s to the mid-'60s, and during the 1990s. After the mood has trended negatively for along time, turbulence reigns, as it did in the 1930s, the 1970s and since the peak in 2000. Social mood induces social actions, which express that mood. If you really want to get down to what I'm talking about, the eruption of scandals did not cause a negative social mood; a negative social mood caused the eruption of scandals. You say that notable social events follow, rather than precede, corresponding stock market waves (hence socionomics).

Q: Does the market cause changes in mass psychology or does mass psychology drive market prices?
RP: Mass psychology drives markets. But it also drives other things. A positive mood induces people to expand businesses, dress with flair, buy happy music, make peace with others and buy stocks. A negative mood induces people to contract businesses, dress conservatively, buy morose music, fight with others and sell stocks. So social mood moves not only the stock market but other measures of social action as well.

Q: Social mood, and therefore behavior, is always in flux. Change is constant.
RP: Absolutely. There's not such thing as social equilibrium. What we have is an unceasing dynamism. The thrilling thing about it is that it's dynamism at all scales. Dramatic moves lasting years or decades to the upside, equally or even more dramatic moves on the downside, over and over again. There's no such thing as equilibrium.

It's the buyers and sellers, it's the people who lend and borrow in the marketplace, it's the depositors and the bankers, all the people throughout society who are determining things like interest rates, how much economic production will occur, whether they'll be a recession or not, it's those summed decisions, which I believe emanate from shared moods that people have, that ultimately dictate all of those things.

See the list below for more examples of socionomics' perspective of social causality.

http://www.socionomics.net/whatis/