1940s-50s Argentina: Perónist moves to the left—Juan Perón nationalized industries, increased wages for
workers, increased the numbers covered by social security, and expanded health insurance.
1950s Soviet Union: Nikita Khrushchev’s anti-Stalin reforms to eliminate oppression and raise agricultural
production.
1960s-70s India: Gandhi’s socialist policies— Indira Gandhi expanded the public sector and helped enable
the “Green Revolution” (protecting Indians from famine and dependence on imported grains).
1964 US Election: Lyndon Johnson’s tax cuts and civil rights and anti-poverty programs.
1978: Deng Xiaoping/“Capitalist Revolution.”
1979 UK Election: Margaret Thatcher’s move to the right.
1980 US Election: Ronald Reagan’s move to the right.
Crossing the line from Stage 5 (when there are very bad financial conditions and intense internal and external
conflict exists) to Stage 6 (when there is civil war) occurs when the system for resolving disagreements goes
from working to not working. In other words, it happens when the system is broken beyond repair. As you might
imagine, it is a much bigger deal to break a system/order and build a new one than it is to make revolutionary
changes within an existing system/order. Though breaking a system/order is more traumatic, it isn’t necessarily a
worse path than operating within a system.
Deciding whether to keep and renovate something old that is not working well or to dispose of it and replace it
with something new is never easy, especially when the something new is not clearly known and is of the
importance of a domestic order. Nonetheless, it happens, though typically it is not decided on intellectually; it is
typically emotionally driven.
When one is in late Stage 5 (like the US is now) the biggest question is how much the system will bend before it
breaks. The democratic system, which allows the population to do pretty much whatever it decides to do, produces
more bending because the people can make leadership changes and only have themselves to blame. In this system
regime changes can more easily happen in a peaceful way. However, the one-person, one-vote democratic process
has the drawback of having leaders selected via popularity contests by people who are largely not doing the sort of
thoughtful review of capabilities that most organizations would do when trying to find the right person for an
important job. So, while having great ability to bend, in democracies there is a big risk in not filling the most
important jobs with the most capable people. Democracy also requires consensus decision making and
compromise, which requires a lot of people who have opposing views to work well with each other within the
system. That ensures that parties that have significant constituencies can be represented, but like all big committees
of people who have widely different views (and might even dislike each other), the decision-making system does
not lend itself to efficient decision making. History shows us that the biggest risk to democracies is that they
produce such fragmented and antagonistic decision making that they can be ineffective, which leads to bad
results, which leads to revolutions led by populist autocrats who represent large segments of the population who
want to have a strong capable leader get control of the chaos and make the country work well for them.
Also noteworthy: history has shown that during times of great conflict federalist democracies (like the US)
typically have conflicts between the states and the central government over their relative powers. That would be a
marker to look out for that hasn’t yet arisen in the US; it happening would signify the continued progression of this
cycle toward Stage 6.
There are far too many breakdowns of democracies to explore, let alone describe. While I looked into a number of
them to see the patterns, I haven’t fully mined them, and I’m not going to dive into them here. I will say that the
factors described in the explanations of Stage 5 when taken to the extreme—most importantly, terrible finances,
decadence, internal strife and disorder, and/or major external conflict—lead to a dysfunctional set of conditions
and a fight for power led by a strong leader. Archetypical examples that come to mind are Athens from the late
400s to the 300s BC, the end of the Roman Republic in the century or so preceding 27 BC,18 Germany’s Weimar
Republic in the 1920s, and the weak democracies of Italy, Japan, and Spain in the 1920s and 1930s that turned to
autocracies of the right (fascism) to bring order to the chaos.
Different stages require different types of leaders to get the best results. When one is in Stage 5 one is at a
juncture in which one path could lead to civil war/revolution and the other could lead to peaceful, and
ideally prosperous, coexistence. Obviously the peaceful and prosperous path is the ideal path, but it is the

much more difficult path to pull off. That path requires either a “strong peacemaker” who goes out of their
way to bring the country together, including reaching out to the other side to involve them in the decision
making and reshaping the order in a way that most people agree is fair and works well (i.e., is highly
productive in a way that benefits most people) or a “strong revolutionary” who is capable of taking the
country through the hell of civil war/revolution. In our discussion of the next two stages about civil
war/revolution and the times right after them, we will explore what is required.