The most extraordinary leaders are those who took their countries through Stages 6, 1, and 2—i.e., through the
civil war/revolution, through the consolidation of power, and through the building of the institutions and systems
that worked fabulously for a long time after them—and did it at scale. The best ever probably were Tang Taizong
(one of the revolutionary founders of the Tang Dynasty in China in the 600s, which was followed by about a
century and a half of peace and prosperity that led China to become the world’s largest and strongest country);
Caesar Augustus (the first emperor of Rome in 27 BC who began roughly 200 years of frequent peace and
prosperity, in which Rome became the world’s largest empire); and Genghis Khan (who founded and led the
Mongol Empire starting in 1206, which was followed by over a century of prosperity when it became the world’s
largest and strongest empire, though there were civil wars shortly after his death).
This sequence of rebuilding happens all the time in varying degrees depending on the amount of change that is
warranted. In some cases it comes after brutal revolutions when there needs to be a rebuilding of nearly
everything, and in other cases it comes when the instructions and systems that are there just need to be modified to
suit the new leader. For example, there will be some changes in the United States after the presidential election that
will lead to some amount of purging of those in government who were sympathetic to the old administration and
fighting for power between moderate Democrats and very left Democrats.
Stage 3: When There Is Peace and Prosperity
I also call this phase “mid-prosperity.” It is the sweet spot of the Big Cycle. It is when people have an abundance
of opportunity to be productive, are excited about it, work well together, produce a lot, get rich, and are admired
for being successful. It is more opposite than similar to Stages 5 and 6—so pretty much whatever I said about
Stages 5 and 6, the opposite can be said about this one. In this stage conditions are improving for almost everyone
so most of the next generation are better off than most of the prior generation, so there is broad optimism and
excitement about the future. History shows us through time that, when done well, there is wide and almost equal
access to education and merit-based placements in jobs, which draws on the widest possible range of the
population to access talents and yields a system that most people believe is fair. Successful entrepreneurs,
inventors, and adventurers produce new ideas and take their societies to new places and become the heroes that
others aspire to be like because of how they come up with revolutionary new ideas, make people’s lives better, and
are rewarded for it. Debt growth fuels productivity and in turn real income growth, which makes debts easy to
service and provides excellent excess returns that make equity returns excellent. Incomes exceed expenses and
savings exceed liabilities with the savings financing investment in the future. Stage 3 is an exciting period that has
a lot of creativity (e.g., the arts flourish), productivity, and energy.
Examples of this period include most of the Victorian Era in Britain (covering much of the 19th century, marked
by Industrial Revolution inventions producing a rapid increase in prosperity); the German Empire in the late 1800s
(with rapid industrialization, technological innovation, and a quickly strengthening military); and the 1960s in the
United States. For example, in the United States the 1960s moon shot project to put a man on the moon
exemplified the shared mission. The whole country cheered and was brought closer together when the moon
landing happened.
This is the time for the “inspirational visionary” who can a) imagine and convey an exciting picture of a future that
never existed before, b) actually build that future out, and then c) use the prosperity earned to broaden the
inclusiveness of it and to invest in the future. They do this while d) maintaining sound finances and e) producing
excellent international relations, so that they protect or expand their empires without any financially or socially
debilitating wars. Examples include:
In the British Empire’s Victorian Age in the mid-to-late 1800s, Prime Minister William Gladstone
simultaneously a) maintained high levels of productivity, b) imposed strict budget controls that led to strong
finances, and c) supported the common man so much that he was known as “The People’s William.” He also
ran a peaceful and prosperous foreign policy.
In the German Empire in the late 1800s, Chancellor Otto von Bismarck united the disparate populations of 39
different states and people of different religions to build Germany as a country and an economic powerhouse.
Under him Germany had an economic boom with sound finances while brilliantly navigating international
relations to have it benefit internationally and avoid debilitating major wars.