December 17th, 2007


The hemline theory goes cosmic

In my piece about money metaphors in the art press last week I confessed that "I flunked Economic Metaphysics 101". That was of course a joke -- there isn't such a course. But if there were, it would probably have to include a module on Socionomics.

The Socionomics Foundation is a research organisation based in Gainseville Georgia, presided over by social predictor Robert R. Prechter. Googling something or other, I stumbled across a rather interesting documentary they've made called History's Hidden Engine. You can watch the whole thing online if you follow that link. The film, like the foundation, is dedicated to the idea that "social actions are not causal to changes in social mood, but rather changes in social mood motivate changes in social action".

Basically, Socionomics works a bit like conspiracy theory. They're telling you one thing, it says (in this case, that social actions cause social mood), we can reveal that the opposite is the case (that social mood causes social actions). So let's bracket our more dialectical view (social mood and social action influence each other continuously) and go along for the ride.

What makes the film interesting to me is its determination to find relationships between patterns in unrelated areas. Socionomics believes that human herding (self-clustering) leads to emerging social mood trends, which in turn lead to changes in economics, politics and culture. In other words, it's the very opposite of the classic Marxist view that economic base determines cultural superstructure (not, by the way, the view of later Marxist thinking). For Socionomics, "soft" stuff like feelings and mood is what changes first, carrying the "hard" stuff (the stock exchange, for instance) with it later.

Naturally, Ralph Rotnem's famous Hemline Theory is very interesting to the Socionomics people. In the late 1960s, Rotnem made a "Hemline Indicator" which correlated the rise and fall of women's dresses to the rise and fall of the stock market. As hemlines rise, he said, so too do stock prices. Thus the best time to buy stocks is when dresses are long, to sell them when dresses are short. This certainly seemed to work at the time Rotnem was researching -- the optimism of the 1960s was reflected in the mini-skirt, the pessimism of the 70s brought in the midi and the maxi skirts, just in time for the sci-fi dystopias of David Bowie, the oil crisis, and punk's "no future". But it also works for the 1920s, with the short skirts of the flappers being replaced by long skirts towards the end of the decade, just in time for the Great Crash.

Robert Prechter from the Socionomics Foundation takes Rotnem's basic insight and widens it. War and horror movies, he says, do well during bear markets. Disney cartoons do badly -- Disney didn't have a single cartoon smash hit between the late 60s and the late 80s, a bear time. The bright colours and optimistic values of Disney work in times when bull markets prevail, decades like the 60s and the 90s.

This does strike me as accurate. I've now lived through enough decades to notice sharp changes in social mood -- the soft optimism of 60s cinema turning into on-screen blood and darkness in the 70s, the return of war movies in 2000. As people's mood improves, they feel less like fighting, the film tells us. Wars tend to erupt in bear markets (on the second decline, though, not the first).

Naturally, I've felt happiest in those soft, colourful, short-skirted decades when there's an economic boom. As a bull boy born in the 1960s, I've sought them out. When these values seemed to be collapsing in the West, I discovered something similar (well, the short skirts, at least) in Japan. Even my current interest in the art world is probably related to this: the current art market boom reflects 1960s-style good times for the super-rich. It's a boom in a high-Gini bubble, but you can tap into the colour, optimism and extravagance even if you aren't rich.

Now, of course Mr Prechter wants to solidify his position as a marketing consultant by hyping up his ability to foretell social trends. He starts with simple stuff: in bull markets you should be making family fare, happy pop, short skirts, bright colors. In bear markets, concentrate on cutting edge horror, darker colours, longer skirts. It ain't rocket science.

Where it does all get a bit Economic Metaphysics 101 for me is the argument's next steps. Invoking R.N. Elliot's Wave Principle, Prechter starts finding the same five-step wave pattern in stock market curves and other social indicators -- basically three steps forward, two back. Since the stock market is, according to him, simply "humanity's valuation of its own productive capacity", Prechter relates this to patterns in nature: fractals, the Fibonacci sequence, and the Golden Section. The pattern (three progress, two regress) is the basic form, he thinks, which allows both fluctuation and progress, which is the way nature evolves the forms around us.

This is where wishful thinking, conspiracy theory and "Economic Metaphysics 101" overwhelms the film. When the capitalist system starts getting presented as some kind of mystical natural -- nay, cosmic! -- principle, in tune with nature rather than, all too often, against it, count me a sceptic.

Socionomics, you blew it! You reached too high, too far, too fast! Your stock market is about to crash! Your hemline's hiked so high your theoretical knickers are showing. But thanks for the tingle!