“The Fourth Turning” by William Strauss and Neil Howe


A Lucky Trip to the Bookstore

When I was a kid, I went with my family to Wildwood, NJ every summer.

As a geek, instead of spending time in the sun like a normal kid, I was mainly drawn to the shore for the pizza and arcades. I would spend most of my time either in an arcade or reading a book.

I’d also make a habit of taking my lawn mowing earnings and buying a book on the boardwalk that I would read back in the motel.

In the summer of 1998, I came across a book that grabbed my attention. It was called Generations: A History of America’s Future from 1584 to 2069. The book (published in 1991) told the story of America’s history as a series of generational biographies. It also informed me that those born during 1982 and after were part of a new generation, called Millennials. (Yes, they coined the term.)

The authors, William Strauss and Neil Howe, were trying to find out if the generation gap that existed between the baby boomers and the G.I. generation during the 1960s was a unique event. They found out that not only was it not a unique event, but there is a rhythm to history caused by different generations interacting with each other.

I finished Generations in that weekend, and I was transfixed by the story. It was a unique way to look at history. Most history books are simply a recounting of events. It never captured what people actually experienced and thought during those times. I went home to my dial-up internet connection and found that they just came out with another book, The Fourth TurningI found that one at a local bookstore and quickly devoured it.

Strauss & Howe’s Theory

Strauss & Howe noticed a rhythm to history. They discovered that there is a cycle of generations that persists throughout history. The generational cycle fuels a sequence of historical moods, defined below. These 4 distinct moods last for roughly 20 years and form an 80-year sequence.

Cycles of History

High – The most recent high was the “American High” that lasted from the end of World War II through the assassination of John F. Kennedy. A high takes place after a civilization-defining crisis. The last crisis was the Great Depression & World War II. After the Crisis is over, everyone wants to get back to normal. Pragmatic civic solutions are embraced and the culture has a long-term orientation. Think of the Presidency of Dwight Eisenhower: interstate highway systems, the establishment of NASA, reductions in public debt. It is an era of strong public institutions and public cohesiveness. Critics would say that highs are also eras of stifling conformity and a lack of creativity. During a high, the outer world is doing well, while the inner world is neglected.

Awakening – The most recent Awakening was the “Consciousness Revolution”. Young people rebelled against the conformity and strong institutions created during the Crisis and strengthened during the High. This is an era during which the established institutions are criticized. A new generation of young people emerges with their own take on morality and culture. It is an era of the challenge to the status quo and a focus on new ideas about values and morality. Cultural creativity surges. While institutions were strong and conformity was reinforced during the high, during an awakening the emphasis of society begins to shift to individualism and new ideas. An awakening is an era in which culture undergoes a renaissance and is fundamentally changed.

I think that Awakenings are the most enlightening and thought-provoking eras in history.

Unraveling – The most recent Unravelling was defined as the “Culture Wars” by Strauss and Howe. In retrospect, I think “The Great Moderation” (coined by economists) is a tremendous alternative term for it. After society has gone through a consciousness-altering and culture shattering awakening, the values of the Awakening begin to become ingrained in our culture. People want to move on and focus on their own lives. This was very much the attitude of the mid-1980s. After the Generation Gap, Vietnam, Watergate, and cultural upheaval, people wanted to settle down and focus on their own lives. The attitude is “after all that, let’s have a good time.”

The culture becomes fragmented and individualistic, with everyone free to pursue their own interests and passions. From the perspective of some, this is an isolating force. Meanwhile, distrust in institutions is high, and they began to show signs of stress. Problems start to brew but are ignored (slavery before the Civil War, the sovereignty of the colonies before the American Revolution, the lack of an international order due to the decline of the British Empire before World War II).

I think that Unravellings are probably the most fun of all the historical eras. Of course, all of that fun comes at a dire cost.

Crisis – We are currently in a Crisis. When the current crisis began is subject to debate. I would argue that it started on 9/11, while I believe Neil Howe says it started in 2008. I prefer 9/11 . . . because I’m an optimist and I would like the Crisis to be resolved sooner rather than later!

The last Crisis was the Great Depression & World War II. This is when the problems that were brewing during the Unravelling come to a head. The institutions that were weakened during the Unravelling, now fall apart and are replaced.

During a Crisis, problems that were mounting during an Unravelling become too big to ignore any longer. Old institutions are torn down and new ones are created. Unfortunately, this unique mood tends to create wars and financial crises.

On the positive side, while Crises throw everything into turmoil, they make the world a stronger place. They create institutions and leadership that beget a stabler and stronger world.

The cycle of historical moods creates a cycle of generations that are shaped by the events. The generations at different life stages create the unique cultural mood of each turning in the cycle. The two drive each other in a kind of historical ecosystem. The generational cycle is below:

Prophets – These are the children of a High. The current example of this is the baby boom generation. Their parents went through hell in the Crisis, and they are determined to create a good life for their children. They are indulged as children. They are encouraged to be inquisitive and to think about the weightier issues facing their civilization. They grow up with a distinctly ideological, moralistic, crusading attitude that carries them through into adulthood. Growing up in a stifling and conformist world that values the technical over the spiritual, they want to create the opposite of that.

Prophets produce intensely ideological leaders and some of the most creative people in history. There is a reason that this generation produced people like Steve Jobs and Steven Spielberg. Creativity and expression are a part of the baby boomer DNA.

Nomads – Nomads are the children of an Awakening. While adults focus on their inner world and challenge cultural conventions, Nomads are left with a mostly unsupervised childhood in which they are encouraged to find themselves and learn about the world on their own. Their parents, the “artist” archetype, grew up with a stifling and strict childhood during the Crisis. They want to give their children more freedom and less structure. This childhood causes Nomads to get into a lot of trouble, but it also creates a generation of richly individualistic and rugged people. Think about ’80s teen movies. There are no parents in sight and if they are around, they’re clueless about what’s going on. They don’t make movies like that anymore because the dynamic wouldn’t resonate with modern audiences.

Parents in modern movies tend to be deeply involved in their child’s lives (for good or bad) because that’s the current dynamic.

Pathologies increase during Nomad youth (drugs, crime, teen pregnancy, etc.), but so does entrepreneurialism. The current example of this is Generation X. It includes some of the greatest entrepreneurs of all time, people like Jeff Bezos. Before them, the last example was the Lost Generation — veterans of World War I, participants in the roaring 20s, and people like Dwight Eisenhower who led society through the Crisis. Growing up in a world that has its head in the clouds, they want to return the world to pragmatic reality.

Heroes – Heroes are the children of an Unravelling. Their parents are predominantly Prophets who want to instill their ideas and values into their children. They are fiercely devoted to raising their children and maximizing their future. They are nurtured as children but given more structure and attention from society than Nomads. The current example is the Millennial generation.

While Generation X was growing up, for instance, Disney ceased making animated films, and the culture became somewhat indifferent towards young children. All of that changed with the arrival of Millennials, with a society entirely focused on preparing children for the future. Pathologies get better — Millennials actually improved crime rates, SAT scores, and have lower rates of teen pregnancy than their Xer peers. They are conformist and prone to groupthink, far less individualistic than their Xer and Boomer elders. They also tend to be more optimistic than Prophets and Nomads.

The last hero generation was the G.I. Generation, Tom Brokaw’s “Greatest Generation”. This was the generation that was young adults during the Great Depression and World War II, who rose to the occasion and acted as a group to save the country. It’s yet to be seen if Millennials will live up to the last Hero generation. I think they will rise to the occasion if challenged. If they don’t . . . well, then I guess I’ll have to focus more on my low Shiller PE international strategy. (I’m biased.)

Growing up during a complacent Unravelling with weakening institutions, Heroes want to see a world that is the opposite of that. Instead of weak institutions, they want healthy institutions, and they want to see those institutions do big things. Big things can be good or bad – think of the Moon landing and the Vietnam War. They are two sides to the same coin. Instead of rampant individualism, they want to create a cohesive conformist culture.

Hero generations are marked by their positive and optimistic attitude. You can see this in modern Millennials. This is in sharp contrast to the youthful attitudes of the 1980s and 1990s, for instance, when it was “cool” to be cynical. It’s not anymore.

Artists – Artists are the children of a Crisis. They are raised primarily by Nomads. Nomads become strict and structured parents after seeing all the trouble that they got into with free reign in their youth. Artists are raised during a civilization-threatening Crisis and this also impacts their outlook. They grow up to be largely conformist young adults, with a deep yearning to break free of that. Entering midlife during an Awakening, they lead the charge into breaking free of conformity and rules. Think of Martin Luther King Jr.

The last Artist generation is the Silent Generation, born between roughly 1930 and 1945. Growing up with strong conformist institutions, they want to see society break free of that and create a more individualistic world. The most prominent member of the Silent Generation in the investing world is the one and only Warren Buffett.

Side note: I love to think of the dynamic between Benjamin Graham (a Nomad  member of the Lost Generation) and Warren (an Artist member of the Silent Generation). Graham was focused in an almost cynical way on intrinsic value to eliminate losses (i.e., the cigar butt approach) after experiencing the speculative fervor of the Unravelling (the 1920s). Graham’s focus was always on how much he could lose and not how much he could make. Warren, while he internalized Graham’s lessons about margin of safety and intrinsic value, took a much more optimistic view of the world (as Artists tend to do) and instead pursued the purchase of “wonderful companies at good prices” and holding for the long term. That right there shows a dynamic between a Nomad view of the world and an Artist perspective.


On the surface, the theory of generational archetypes coming in sequence and seasons of history sounds a bit new-agey and mystical. It’s really not. Strauss and Howe’s observation is simply that different generations raise their children in unique ways (usually in critical ways that are different from the way they were raised). Those children then grow up and raise their children differently than the way their parents raised them. They think they are doing something “unique,” but most of it was already done before.

The cycle of different generations raising their children in different ways creates unique personalities to generations.

These personalities align at different life stages create unique cultural moods. A society in which Artists are calling the shots (i.e., the ’80s and ’90s) will be uniquely individualistic to a point where younger generations will find it isolating (think Bowling Alone). A society in which Nomads are calling the shots (the late 1940s and 1950s) will be pragmatic to the point where younger people find it soul-deadening (think The Man in the Grey Flannel Suit).  A nation run by Prophets (the 2000s and today) will seem overrun with overblown ideology. A society run by Heroes (the 1960s and 1970s) will seem capable of achieving anything, but spiritually empty.

Another criticism is the claim that the generational theory is a vain attempt to predict events. This is not the case. Good and bad events happen throughout each stage of history. Strauss and Howe are quick to point out that they are not anticipating specific events, they are predicting a general cultural mood that will react to events in unique ways.

A Crisis era generational alignment (Prophets are in power, Nomads are in Midlife, Heroes are young adults) will react to events differently than an Unravelling era generational alignment (Artists are in power, Prophets are in Midlife, Nomads are young adults). In an Unravelling, after a foreign attack, the country will try to find a quick solution. In a Crisis, after a foreign attack, the Prophet instinct will be to use this as an opportunity to enact sweeping changes and mobilize. Think of George W. Bush’s declaration of an “Axis of Evil” after 9/11.

A crisis is merely an era in which institutions are run by Prophets. Prophets tend to have itchy trigger fingers to impose their moral will, and they will have a compliant cohort of young Heroes who can help them make that happen. This doesn’t mean a war must be the way that the crisis is resolved, but the unique assembly of generations at different lifecycles raises the probability of it.

That’s the key to generational theory. It’s not the events themselves that drive history, it is the reaction of civilization to those unique events.

Similarly, an Unravelling is an era in which Artists are running the show and want society to fully embrace individualism. With crumbling institutions and an individualistic entrepreneurial “kill what you eat” young cohort of Nomads, it’s natural for a society to become financially reckless.

Another criticism is that this theory ignores the unique personality of people within a generation, who may not ascribe to these stereotypes. This is valid, but I think it’s hard to deny that each generation has a unique personality. There are people within the generation who defy generational stereotypes, but on the whole, they do have a distinct character, and there are commonalities.

The Bad News & The Good News

The next 10 years will likely see this era resolve itself. 2025 is exactly 80 years after 1945, the year that the last crisis ended. This means that we are entering a dangerous time in history in which we will need to rise to the occasion. We will face a challenge of history on par with the American Revolution, the Civil War, and World War II. New institutions will likely be created, and old ones will be torn down.

I hope this era doesn’t end the United State’s position are the world’s preeminent superpower, but that is indeed a possibility. It might very well set the stage for another country’s emergence as a superpower. It may also result in better global institutions and cooperation.

The excellent news is that regardless of how this crisis shakes out, it’s eventually going to be over and we will enter the First Turning in the next decade. The First Turning will be rigid, conformist and corporatist — but the economy will likely do very well, and I’ll take that over a Crisis.

Investing & Economics

In terms of investing ideas, I was struck by how Strauss and Howe’s ideas align with Ray Dalio’s thoughts about the long-term debt cycle. Dalio identified an 80-year debt cycle (the last one culminated in 2008, the one before that in 1929) that strongly aligns with Strauss and Howe’s theories.

Dalio has a mammoth paper about this, that is well worth your time. He also has an excellent short video explaining this that I’ve mentioned before on this blog.

Another interesting parallel is the work of Hyman Minsky. Minsky described a financial cycle which I think fits into the larger 80-year cycle. Minsky’s idea (similar to Dalio’s) is that debt drives the long-term economic cycle. After a financial crisis (the Great Depression or the 2008 financial crisis), firms avoid debt. This reduces the risks to the financial system. Over time, the reduced financial risk will ultimately spur more lending and borrowing. Increasing debt levels increases the risks to the financial system, which ultimately turn into a Crisis moment. The Crisis moment changes attitudes towards debt, and the cycle repeats.

(Disclaimer: As I wrote earlier, while Macro is a lot of fun to think and theorize about, it is in most investor’s interest to avoid it. Even though I know this, I simply can’t help myself!)


I think you should read this book. This book changed the way I look at the world and I think it will change your perspective, too. You’ll not only gain unique insights into history, you will begin to see people of different generations in a new light. Current events will also make a lot of sense through a generational lens.

Even if you don’t buy into Strauss and Howe’s theory, you will enjoy looking at history through the perspective of culture and people instead of a simple recounting of events.

PLEASE NOTE: The information provided on this site is not financial advice and it is for informational and discussion purposes only. Do your own homework. Full disclosure: my current holdings.  Read the full disclaimer.