Background

This is a paper I wrote for school sometime ago (last semester). I don’t think it’s a particularly stand out paper, but I think I ought to have something to show for my time at University on my website - so here it goes…

Analysis of Business Cycles

Introduction

We live in unprecedented times. Or so we think. While the world faces the onset of a new political administration, artificial intelligence, and the aftereffects of a pandemic, some posit we live in nothing new, but rather a repeat. A reoccurrence of a cycle that society has found itself in many times before. Whether it be politics, technology, economics, or culture, there has been evidence of society operating in cycles among many different domains and across large time periods(Lenton). In this time of perceived uncertainty, is it helpful to go back and look back at previous generational changes as a means of recontextualizing the modern problems we face in the 21st century? And are we able to find comfort in the knowledge that we face similar challenges as our ancestors, or do the current developments represent a complete departure from what society has faced in the past?

As business students, we find ourselves able to live in an intersection of culture, economics, technology, and regulation. The topic of social cycle theory presents the unique opportunity to explore the relationality among all these subject matters while also detailing a sociological theory that has a modern-day relevance as we deal with upending change in the form of technology, policies, and society. This essay will present my research findings and analysis at the macro level of various cycle-like activities in the larger context of the business world.

A new world, with old issues – defining social cycle theory

Beginning with the Greek term of “anacyclosis” – social cycle theory has its roots as an observation dating back thousands of years to the Greece historian Polybius (born 200 B.C). First seen as a theory of explaining the decline of Ancient Greece and the rise of Rome, the concept of political empires rising and falling has since perpetuated throughout history, and has been explored to other domains beyond government with theories on areas such as business, economics, social generations, and product lifecycle (O’Hara). This viewpoint represents a contrast with the other school of thought, that society progressively marches towards progress and becomes better in a “unilinear” fashion.

Models such as the Strauss-Howe theory and Kondratiev Waves attempt to explain how certain events reoccur in history with discussion on topics such as periods of economic growth and recession, cultural fads, and also delivers the researcher’s attempts to identify the length of each social cycle. It reminds me of in-class discussion of the Gilded Age of the 1800s – many of the topics brought up in class saw a resurgence in what is thought to be a similar period in the 1980s-2000s as a “second gilded age” where many of the same generation defining traits were repeated(Short). If the theory of social cycles were true, there would be significant benefits to those who can understand and predict them – as predicting the market presents a tremendous benefit to investors and businesses.

The (lack of) predictive power with social cycles

With every shift in culture and society there is bound to be a mixture of both winners and losers. Sometimes it’s between companies, other times between socioeconomic classes, and in rare cases – the introduction of new power structures. There is also the government regulation implication that businesses have to keep in mind, for instance in the past months major laws have passed in the EU regarding AI safeguarding and in banning social media for minors in Australia. Due to the impact of economic, social, and regulatory cycles, there is great value in information about what the future holds. If one thing is certain, corporations want to win in the market, and so comes the desire to estimate and anticipate.

This ability to anticipate and forecast as means of removing unpredictability is one of the best ways to reduce risk, and because of this, knowledge and information used in decision making is highly valued (Ward). With its role in informing business strategy, managers seek to identify potential socioeconomic trends and seek out ways to predict the macroeconomic landscape, indicating a huge upside in the potential of modeling business cycles as a prediction model. However, social cycles unfortunately may not be suitable as a means of prediction for business leaders due to the flaws that are inherent with “trying to beat the market”. This problem is one of the reasons that it has not seen adoption by corporations and the curriculum of business courses.

A major problem with the theory of social cycles lies in its academic validity. Although a well-established observation, the idea of defining generations and cycles has “little empirical evidence” in the scientific sense and is largely used colloquially (Rudolph). This extends to cyclic models such as Kondratiev Waves, and Strauss-Howe theory, which are under equal scientific scrutiny. Why then has this topic had such staying power across history? One framework to think of these cycles may be in the frame of philosophy rather than as a sociological law.

Social examinations and the timelessness of philosophy

It is indisputable that the world has evolved and changed in innumerable ways. Yet, it is also undisputable the countless ways in which there are certain immortal truths. Philosophy is one such discipline with an immortal nature that goes back millennia. Franssen et al. discusses in detail how people have been philosophizing about changes in systems for nearly as long as the recorded history of philosophy—some of the earliest known mention of philosophical discussion on new tools inducing societal change include discussions in ancient Greece by figures such as Socrates, Plato, and Aristotle. Such discussions have continued throughout history and though tools such as AI differ drastically in the power and scope of the tool – the ability for technology to upend social, governmental, and business systems is a timeless dilemma that has stayed in the public view.

Socrates famously denounced the brand-new technology of “writing”, saying it would “introduce forgetfulness into the soul” (Plato) and in true fashion of rebellious pupils, had his doubts ignored and recorded in writing by followers such as Plato. Socrates’ doubt in writing may be misplaced, but represents the common cultural tendency that comes with the adoption of a new technology. While AI differs drastically, the similarity in cultural response is remarkably similar to this Ancient Greek example as there is a timeless nature to certain generations rejecting or adopting a technology in differing ways. The introduction of new products, technology, and consumers has a wide-ranging effect on society, and it is important to consider these effects. It is especially important for industries that depend on cultural trends such as businesses.

Culture as a measure of consumer patterns

“We shape our tools, and thereafter, our tools shape us”. Communications theorist Marshall McLuhan took note and described how the tools we use impact culture, and therefore the people living in it. It was McLuhan who popularized this theory that “the medium is the message” and the ability for not only for people to influence technology, but for it to influence people. For industries involving sales to consumers, this indicates the importance to keep in mind that influence that technology has on people, especially considering the “Technology Life Cycle” (TLC) that results in changing paradigms for each generation of new technology (Kim), an especially important consideration as we experience the new revolution of AI, and with digital mediums as Euchner discussed in their paper on multimodal social media communication. Social media now has the potential to influence how advertising is made, content is consumed, and people react to the media that they buy and consume.

It is reasonable to assume then, that the predominant technology of a generation can fuel the purchasing patterns and create cycles in consumer preferences in the marketplace. When thinking of how this applies to the current “AI cycle”, it may be helpful to look at society in the realm of a “Technopoly”, a term coined by professor and culture critic Neil Postman. Technopoly describes a world where technology becomes the dominant force that influences product consumption, socialization, and a throwing away of the previous tradition. Kevin Munger in his paper describes what I believe is a realization of this worldview, with social media like YouTube where algorithms tailor content, advertising, and sponsorships with drastically reduced regulation (p. 38). This is in contrast to the more regulated nature of marketing before with stricter FCC rules, and the exclusion of certain age demographics (e.g. kids). The lack of regulation on YouTube may be a representation of what is to come as society as the US reverts to the more lax regulations, akin to the landscape that existed prior to the FCC and the Radio Act of 1927 (Matzko), thereby indicating another area where a social cycle may come to play.

Conclusion

Society as a whole is neither linear nor cyclical. While further research is needed to give a definitive view, a safe assumption is that modeling of society is a nuanced topic that cannot be thought of in absolute terms. A common fallacy is to assume the two mutually exclusive when reality likely lies somewhere in-between. When society has both the potential to stand on the shoulders of giants or to repeat the mistakes of the past, it is hard to predict what the future entails and what repeats, if any, will be seen in future business cycles. This lack of predictability is a testament for a corporation’s strategy to always remain cognizant of the world at large when conducting business and to act in a way that either minimizes risks or maximizes societal value. Another method rather than attempting to predict business cycles, is to be cognizant of world events through interdisciplinary study on topics such politics, technological developments, and making informed decisions of data such as financial statements. The study of business cycles is a great example of the need for multidisciplinary study, and how leaders can benefit from being curious in their market research.

Works Cited

BBC. (2024, April 23). Post office scandal: What the horizon saga is all about. BBC News. https://www.bbc.com/news/business-56718036

Buchholz, K. (2023, April 20). Charted: There are more phones than people in the world. World Economic Forum. https://www.weforum.org/stories/2023/04/charted-there-are-more-phones-than-people-in-the-world/

Dolan, N. (2004). Science fiction as the only moral education? Journal of Futures Studies, 9(2), 1–8. https://jfsdigital.org/wp-content/uploads/2020/03/08-Dolan-Science-Fiction-as-the-Only-Moral-Ed.9.pdf

Euchner, J. (2016). The Medium is the Message. Research-Technology Management, 59(5), 9–11. https://doi.org/10.1080/08956308.2016.1209068

Franssen, M., Lokhorst, G.-J., & van de Poel, I. (2024). Philosophy of technology. In E. N. Zalta & U. Nodelman (Eds.), The Stanford Encyclopedia of Philosophy (Fall 2024 ed.). Stanford University. https://plato.stanford.edu/archives/fall2024/entries/technology/

Hobbs, R. (2021). A most mischievous word: Neil Postman’s approach to propaganda education. Misinformation Review. https://doi.org/10.37016/mr-2020-65

Kim, B. (2003). Managing the transition of Technology Life cycle. Technovation, 23(5), 371–381. https://doi.org/10.1016/s0166-4972(02)00168-2

Lenton, T. M., & Scheffer, M. (2023). Spread of the cycles: A feedback perspective on the anthropocene. Philosophical Transactions of the Royal Society B: Biological Sciences, 379(1893). https://doi.org/10.1098/rstb.2022.0254

Matzko, J. S. & P. (2020, May 4). Social Media Regulation in the public interest: Some lessons from history. Knight First Amendment Institute. https://knightcolumbia.org/content/social-media-regulation-in-the-public-interest-some-lessons-from-history

Munger, K. (2024). The YouTube Apparatus. Cambridge University Press. https://doi.org/10.1017/9781009359795

O’Hara, P. A. (2025). Capitalism’s long waves: Kondratiev, Schumpeter, et al.. Long Waves of Growth, Hegemonic Power, and Climate Change in the World Economy, 51–79. https://doi.org/10.1007/978-981-96-4132-1_2

Oremus, W. (2016, July 1). Alvin Toffler was right about future shock but wrong about the solution. Slate. https://slate.com/technology/2016/07/alvin-toffler-was-right-about-future-shock-but-wrong-about-the-solution.html

Pearson, K. (1982). Applied Futurism: How to Avoid Professional Obsolescence. The Physical Educator, 39(4), 170.

Plato. (n.d.). Phaedrus. In J. M. Cooper (Ed.), Complete works (pp. 551–552). Hackett Publishing Company. (Original work published c. 399–347 BCE)

Rudolph, C. W., Rauvola, R. S., Costanza, D. P., & Zacher, H. (2021). Generations and Generational Differences: Debunking Myths in Organizational Science and Practice and Paving New Paths Forward. Journal of business and psychology, 36(6), 945–967. https://doi.org/10.1007/s10869-020-09715-2

Short, J. R. (2013). Economic wealth and political power in the second gilded age. Geographies of the Super-Rich. https://doi.org/10.4337/9780857935687.00009

Ward, S., & Carter, D. (2019). Information as an asset – today’s board agenda: The value of rediscovering gold. Business Information Review, 36(2), 53–59. https://doi.org/10.1177/0266382119844639