Elliott and Western Civilization
Dr. Clive Roffey
Western civilization is generally believed to have started in the fertile crescent of Mesopotamia between the Tigris and Euphrates. Abraham, the father of all western religions was born in the city of Ur of the Chaldes in this region. Babylonian civilization had pottered along for some time making the occasional interesting contributions to hanging gardens, astronomy and mathematics. Most people do not realize that the practical aspects of Pythagoras' Theorem were well known to the Babylonians as family wealth was calculated in area of fields. This presented a problem when it came time to divide the area into portions for the surviving sons upon the death of the father. Hundreds of Babylonian clay tablets have been recovered with Pythagorian tables used to calculate the areas and sizes of fields. In addition they also extensively used in their architecture the mathematical concept of the golden rectangle upon which the numerical series later attributed to Fibonacci was based.
Abraham was the originator of the old explorer's advice to prospectors "Go west young man". He knew about Egypt to the west where civilization had taken an upward turn in construction, irrigation, maths and astronomy. This lasted for about 3000 years until the Greeks took over and improved the architecture of construction, maths, philosophy and astronomy even further. Then along came the expansionist Roman war machine that colonized the whole Middle Eastern region as well as most of modern day Europe. Plumbing, water reticulation, baths, central heating, architecture, maths and philosophy all reached new heights during the 1500 year Greco-Roman era. Unfortunately, as with all overly successful operations, the developers became greedy and bored. Typically they resorted to extreme entertainment and an over indulgence in both eating and sexual habits. They also committed the first major inflation spiral due to the degradation of their coinage. All of this was classic Elliott fifth wave blow off behaviour that heralded a significant corrective phase to purge the excesses. Ultimately they diluted their originally fervent Roman society with freed slaves and mercenaries who had little passionate allegiance to Rome and were overrun by the Huns of Attila from whence the Dark Ages descended. This period from Babylon to the end of the Roman Empire constitutes the first major upward thrust in Elliott Wave.
Hell fire and damnation was probably the leading dictum of the Dark Ages as religious dogma stifled original thought. After every excessive expansion there has to be a corrective phase and the constrictive doctrines of the Dark Ages together with the stratified feudal system put a lid on forward development for 600 years. The religious dogmas of the Dark Ages led to the Crusading wars. Ultimately all bear markets are overdone on the downside and the nadir of the Dark Ages was undoubtedly the inhuman practices of the Spanish Inquisition. This constituted the end of the first correction in Elliott.
Light appeared at the end of the Dark Age tunnel as the Renaissance dawned. Original thought and expression, both scientific and artistic, returned and the invention of the printing press removed from religious institutions their stranglehold on education. This new awakening, typical of new bull thrusts, gradually built and slowly progressed to begin the Elliott third wave of western civilization's progress. It is often expected that the Elliott third wave should result in both the longest and strongest moves.
A new epoch of philosophy, mathematics and astronomy accelerated for 300 years. Physicists and chemists postulated and freely experimented. They propounded the laws of light, motion, gravity, planetary movement, bodily functions and structures, the periodic table, atoms, cells, molecules and, to many a school kid's chagrin, calculus. During this era the now unfettered navigators, sailors and adventurers of the maritime nations foraged to the four corners of the earth in their search for gold, discovering spices and new continents in the process. Global trading and growth re-emerged during this period and accelerated as new and more exotic spices, silks, silver and gold poured into the coffers of the coastal European nations. Demand for goods ushered in the necessity for larger quantities of finished products with which the cottage industries just could not keep pace. Out burst the industrial revolution.
Machines replaced hands in the cotton and woolen industries with the invention of the steam engine. This created an even greater demand for raw materials. England was at the forefront of this increasing growth and assumed the leading role in both industrial development and, as the most powerful maritime nation, the search for raw materials. Empire building became the order of the day to ensure control over the harvesting of raw materials in foreign climes and their safe delivery to the British producing markets.
At the end of the 19th century a huge acceleration of inventive prowess produced in rapid succession electrical power, the telephone, the motor car and flight, all of which contributed to the speeding up of both production and demand. Splitting the atom, radio, television, movies, radar, silicon chips and computers all followed at increasingly small time intervals into the 20th century until we arrive at the current era of miniaturization, instant communication, space travel and stellar exploration. Such unbelievable rapidity led to the collapse of the rigid structures of the colonialist empire and ushered in the more flexible business and commercial empires over which the US has assumed the presidency.
Since the Renaissance commenced there has been an acceleration of inventions and growth never before witnessed by global society. Each of the eras of discovery, trading, industrial inventions, technical progress, computer expansion and space travel have taken place in ever decreasing time frames. The Renaissance lasted some 300 years and this overlapped with the discovery and trading period of around 200 years, followed by the mechanical explosion around 100 years and the almost vertical growth of the electronic era only some 70 years old.
Global inventiveness has been accelerating at breakneck speed for the past 600 years and almost vertically for the last 100 years. All of this indicates a typical market bubble and the potential for the start of an Elliott fourth wave correction.
It is also interesting to note that every one of these great societies built its empire on the back of cheap labour, for the most part unpaid conquered slave labour. I look to the ever smaller and more powerful computer to take over as a new form of slave labour. It was a CIA drone that recently annihilated a leading Al Qaeda figure in the remote Yemen desert. Computer literacy will be the new defining role between the haves and have-nots.
Have you noticed that from the Babylonian beginnings developments shifted continuously to the west, first to Egypt, then to Greece and Rome. The epicenter of progress then shifted still further west to the European maritime nations, culminating in the British Empire. The final stage moved across the western Atlantic Ocean to America. All of this in ever decreasing time frames. If this rotational wheel of progress is to be maintained I must ask one question. What is the next western landmass after the US?
The excesses of the Roman rulers led to the downfall of their empire. Will the current excesses of western business and lack of monetary discipline lead to the end of western civilisation as we know it? In the late 1700's Edward Gibbon wrote his famous treatise on the 'The Decline of the Roman Empire'. I expect that some historian in about 300 years time will write a sequel called 'The Rise and Fall of the Western Empire'.
I will not be around to see if all of this analysis is correct. But it was fun doing it.
18 November 2002
Dr. Clive Roffey is a leading market strategist. He lives in South Africa and is a top market commentator in that country. He produces Gold Action a fortnightly newsletter on the gold and precious metal markets especially orientated for the US investor.
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