Week signals: Wave goodbye
Plus: watch points for Ukraine, Israel, Donald Trump, India, and Taiwan.
This week:
IN REVIEW. The discordance of history, from Bangladesh to the Yen.
UP AHEAD. Ukraine stretches itself, Israel waits, debates shift to policy, Modi hosts a meeting, and Taiwan’s allies look vulnerable.
The Week in Review: Patterns versus particulars
The week began with Bangladesh’s long-time prime minister, Sheikh Hasina, fleeing the country as a crowd stormed her compound. Having done what protesters in Venezuela, Kenya and Nigeria have failed to achieve in recent weeks, it gave the world a reminder, and some a hope, of the heady days of 2011, when the Arab Spring toppled dictators.
With the Arab Spring the same distance from the 2007-2008 financial crisis as we are from the 2020-21 Covid crisis, there’s a certain symmetry. The study of politics, after all, lends itself to theories of historical cycles (and, some would say, of circular logic), as does the study of economics. But just as the theory of business cycles has its flaws, the theory of revolutionary and geopolitical cycles (often with roots in Marxism) can be pseudoscientific. Mark Twain once said history doesn’t repeat but rhymes. Sure, but beyond the cadence of elections, it often doesn’t rhyme either.
There’s a lot to like about the idea of cycles, or waves. From the 60-year innovation-led Kondratiev wave, to the 3-5 year inventory-led Kitchin cycle, these patterns can guide forecasts, or at least frame narratives. Like astrology, they give meaning in chaos. But if you make decisions on them alone, then you’ll fit another pattern: the hostage to fortune.
Human systems, political and economic, are emergent and non-linear. They don’t lend easily to cyclical theories or long-range prediction. The variables are huge. The modelling is prone to error. That’s why we prefer bottom-up inductive reasoning, using structured techniques and an understanding of specifics. That may be counter-intuitive for a firm aiming to analyse the big picture, but after all, the whole is the sum of its parts, not the other way around.
Returning to this week, we don’t think we’re at the cusp of a new 2011-style revolutionary wave, even if we see some of the same conditions, notably stubborn inflation and the use of social media as yet uncontrolled by autocrats. Unlike 2011, there are a few key differences: