Note: This section is to pose questions relating to issues addressed directly in Mood Matters or for questions about material related to the themes discussed in the book. In particular, this is not the place for general discussion of social causality, group psychology and the like other than as they pertain to the topics addressed in the book itself. In what follows, I'll try to group the questions into broad categories along the lines of those presented in the book.
Q: In the diagram characterizing the Central Hypothesis of Socionomics on page XIX of the book's Overview section, the arrows all flow in the same direction, displaying no feedback loops of any type. In particular, there is no feedback from Collective Events to Social Mood. Surely this cannot be right, as things that happen must have some impact on how individuals feel about the future, and thus on how the mood of the population feels as well. Why is there no such feedback in the diagram?
A: This question is taken up in detail in Chapter Two of the book on pp. 55-61. So let me just make a few amplifying remarks here:
An event cannot be a leading indicator of itself, i.e., an event cannot cause itself (if you insist on the notion of causation). So either an event (a) spontaneously emerges out of thin air, (b) it emerges as a result of another event, and/or (c) it emerges out of the psychological state of a population/group. MM argues that alternative (c) the most plausible of the three.
Alternative (a) implies essentially that there is no rhyme, nor reason to the occurrence of events; in short, they are effectively random. In such a world, there would be no pattern in the unfolding of events, and things would just ??appen?? This may indeed be the case. But if so, then the whole idea of rational explanation in general, and scientific explanation in particular, must be abandoned.
Alternative (b) requires, among other things, a notion of a ??irst cause??to get the chain of dominos falling from event-to-event-to-event ad infinitum. This, too, is a very problematical account for the way events happen. Moreover, it doesn't accord very well with everyday observations regarding the character of events and how that character shifts with shifts in a population's feelings/mood.
Social causation, alternative (c), is the only one of the three that seems to cohere with the idea of an actual explanation for how and why collective events unfold, and holds the hope of identifying patterns (i.e., a theory) that organizes the types of events we observe.
There is no doubt that it's irresistibly appealing to believe (without proof!) that events must necessarily cause people to feel differently about the future than if the event had not occurred. It was probably equally irresistibly appealing to people in the Middle Ages to look out at the horizon and believe that the Earth was flat, too (again without proof!). Unfortunately, in neither case is there a single bit of evidence in support of these beliefs. They are simply that, beliefs, and nothing more. And like most such taken-for-granted background assumptions that support various conventional wisdoms, they evaporate like a trickle of water in the desert when subjected to detailed investigation. So it is too with the idea of event causation, as the passage cited earlier in the book shows.
Q: How can you say that an index like the Dow Jones Industrial Average (DJIA) serves as a measure of the beliefs about the future of an entire population? Traders whose decisions generate this index constitute not only a microscopic fraction of the entire population, but they are also very far from being a representative sample of the population taken as a whole. So why is the DJIA any better as a sociometer than, say, a well-constructed survey? Or a sampling of sentiments expressed in blogs on the Internet?
A: A complete discussion of this question is given in Chapter Two of the book on pp. 40-52. The short answer comes in two parts: (1) the market index represents what people actually do, not what they say, and actions speak much louder than words. (2) Traders are just as connected to the population, at-large as anyone else, and their actions reflect those connections. It is a categorical mistake to imagine that the decisions traders take as to whether to buy, sell or hold are not impacted by what they read, see on TV, what information and ideas they get from conversations at the corner bar, and so forth. So they are as good a sample of how the population feels any other, and better than most. Moreover, it's a simple fact of life that money matters almost as much as mood, and traders are where the money is!
Q: In various parts of the book you've spoken about Elliott waves as a procedure for identifying patterns in price movements in financial markets. But as far as I can see, there is no logical connection between the idea of social mood biasing collective events (socionomics) and Elliott waves. These waves only come into play when you use an index like the DJIA to measure social mood, and even then the Elliott wave theory is used simply to project the index into the future. So it seems to me that any procedure you care to employ for identifying how a market index is likely to move can be used, and that the Elliott waves have no preferred position insofar as socionomics is concerned. The two are logically independent.
A: Yes, this argument is completely correct. I've emphasized the Elliott waves in the book because it's a scheme for patterning market movements that I find useful. But you can totally ignore this part of the book without losing a single bit of the message underlying socionomics. Moreover, you are totally free to use whatever method you like for forecasting future market prices movements. Heaven knows, there is no shortage of them. And some of them even work?for a while!
Q: The story you tell in the last chapter of the book seems pretty gloomy, being based as it is on the assumption that the social mood is in the early stage of a years-long decline. But since March 2009 your social mood meter, the DJIA, has soared off into the stratosphere, recovering a large fraction of its drop from Oct 2007-Mar 2009. Moreover, financial analysts, government officials and other talking heads are filling the media with stories suggesting the worst is over and that we're in the early stages not of a decline but a major recovery. What do you say about this?
A: The so-called ??ecovery??you speak about is nothing special. As of today (May 4, 2010), the percentage of the loss from Oct 2007 that's been retraced is almost exactly 61%, a typical Fibonacci level in a countertrend bounce. If you accept the movement over the past year as indeed a countertrend bounce, then the trend that it ??ounters??must necessarily be a trend down, not up. The assumption I made on p. 179 of the book about the global negative mood was one on a time scale of a ??ew decades?? not one year. So in this context the upward move over the past year is indeed a move countering the much longer-term trend that began in Oct 2007. In addition, you might have a look at Fig 6.13 on p. 207 showing that the ??ecovery??is as much a financial consequence of the printing presses in Washington, D. C. cranking out dollars like there's no tomorrow (which there may not be!) as it is a result of any actual economic improvements like jobs.
This interpretation is supported by empirical evidence in the types of collective events that have taken place on the decades-long time scale during the past year. In this time we've seen the huge debt crisis in Greece emerge, social disruption surrounding immigration in the USA and Europe, as well as continuing unemployment. These developments are consistent with the longer trend, while the types of events of a positive-mood character that stem from the sentiments of the past year are just short-term, popular-culture-type events like a possible recovery in the art market. In coming months, I will try to regularly chronicle the distinction between the short- and longer-term events and social mood in the Blog section of this web site.
QUESTIONS ON SOCIAL MOOD
(The following questions were sent to me by Nikki Barba, a student at Latrobe University in Australia, as background for a radio program, Future Tense, she is producing for Radio National, Australia.)
Q: Social mood theory has been around since the 1930's what developments [or discoveries] have you made to the theory?
A: I'm not sure what social mood theory from the 1930s you're referring to here, but I am quite sure that the overall line of argument in my book Mood Matters, namely that social mood biases collective events and that the mood can be measured by financial market averages, was not part of whatever theory existed in those days.
Q: What to you are the major factors that have changed social moods in society?
A: Social mood is always present in a society, and it changes internally through people's interactions with each other. No one really understands exactly how those changes occur, although there are some theories that individual beliefs about the future (the mood) move from person to person somewhat like the spreading of a disease. Sometimes, if the disease is virulent enough and the interaction patterns line up just right, an epidemic occurs and we get a shift in mood. But this is all speculation, and the process by which social mood arises from the mood of individuals composing the group remains a major research question.
One thing that is for sure, though, and which few people believe, is that the mood is not changed by external forces or events. In the social realm, there is no outside. Again, my book takes up this point in some detail.
Q: How do you measure social mood in societies?
A: There are many possibilities ranging from public opinion surveys to birthrates to social networking measures on the Internet. They are all considered in the book. My personal belief is that at present the best sociometer is simply the financial market averages. The reasons are outlined in detail in Chapter Two of the book.
Q: What predictions have you made for the future using social mood theory?
A: There are many forecasts of a semi-specific nature in the book. I don't believe there are any procedures, living, dead or yet-to-be born, that can consistently and reliably forecast specific events. So my forecasts are more in the way of identifying the qualitative character of the types of events that I believe are more likely than not to unfold in a given time frame.
Q:Some societies across the world are becoming wealthier [especially younger people] and in some case happier, how do you think this will affect social mood?
A:Not at all. In fact, my belief is that this wealth and happiness is in the process of rolling over, and that you will see a lot less wealth, but maybe more happiness, by the time the current decade has run its course (maybe even within five years, not ten).
Q: Do you believe there is any way to change the social mood of a society?
A: Without a much better understanding of how that mood arises, it's not possible to really answer this question.
Q: Is there anything we can do individually to influence the mood of the entire society?
A: In a trivial sense, I suppose you could say if everyone were to magically become optimistic about the future on all time scales at the same moment, then the overall social mood would turn positive. Ditto, if everyone were to turn negative at the same time. What we see, of course, is that people shift back and forth between these polarities depending on their individual situation, and that the mood of the society as a whole is some combination of these ever-shifting individual moods (but certainly nothing as simple or simple-minded as just adding up the moods of all the individuals, for reasons that again are given in detail in my book).
Of course, the above scenario is pure fantasy. So, no, I don't think there's much we can do as individuals to influence the social mood. The historical record is very clear on this point, which is why we see various social cycles repeating themselves over the course of time.