via Blog Tralio
written in 2010 but the actual prediction from 1875
Benner’s model of ‘Time’ predicts a mini crash in 2011, a boom till 2019 and a depression in 2021. He was the first one to talk about hierarchal ‘Time’ in 1875.
Benner Samuel was a farmer from Ohio who wrote his prophecies in a book about price fluctuations in 1875. The 19th century was also the time of Laplacian probability, Gaussian distributions, Peano curves and Cantor set. While mathematicians were looking for structures in mathematics, Benner was studying and writing about a model of ‘Time’ to forecast the future.
Benner lived in an era of Axe-Houghton Indices, the time when Chicago Board of Trade was established and agricultural commodity trading was active business. Society was busy with agriculture and expanding railroads. This is why his workings were based on pig iron, corn, cotton and hogs. Along with agriculture came the essential science of weather forecasting. What years would be dry or wet? When we may expect years of heat, storm an cold? Agricultural statistics was compiled and used to establish demand and supply patterns. It was then 135 years back Benner wrote that the future cannot be calculated based on agricultural statistics. Statistics compilation according to him would remain always poor, irregular, manipulable, undependable and non-predictive.
This was the reason he focused on history sighting another English historian “Tooke” who talked about alternation of good and bad harvests as a historical fact. According to Benner, the axiom, “history repeats itself” implies a cyclical movement in human affairs, and as it is a generally received opinion that everything moves in cycles, specially in nature. Prediction of future can only be done by the past. History repeats itself with marvelous accuracy in detail from one panic year to another. Benner was the first to show how history repeated systematically. He was vocal about the cyclicality of financial catastrophes and his model illustrated the crisis of 1891, 1902, 1910 and even 1929.
The story of the Benner’s work is intertwined with his personal experiences of bankruptcy. He wanted to find the law of nature. He took the yearly average prices to smoothen the data. When he compared them he saw up and down yearly cycles repeating in a fixed sequence of a large cycle of 18-20-16 years and a small cycle of 9-10-8 years. The cycles low depicted reactions and depressions. The larger 54 year cycle was also discussed in detail by Russian Economist Kondratiev in 1925. There is no published reference of the connection between Benner and Kondratiev. According to Benner these were cast iron rules which were accurate. He referred it as ‘God in prices’.
Extending and updating the Benner cycle points to a high in 2010 now, another minor crisis into 2011, followed by prosperity into 2019 and then a depression in 2021. His work is full of apocalyptic quotes. “delusive phantom of hope”, “forewarned is forearmed”, “hard times and dull trade”, “stay out and confine”, “the strong or hard times will come to every home”, “providence works on the mind of men”
Of course, Benner was excited about his work. But if we look beyond his prophetic tone, a lot of what Benner says is overlapping with the work of contemporary thinkers. Benner’s idea about incomplete and lacking information and hierarchy of ‘Time’ is similar to Herbert Simon’s idea of bounded rationality and hierarchal systems. Benner’s cases of Iron King, black Monday’s and randomness sound like a recent blog update from Alrroya. His idea of studying fluctuations coincides with Shiller’s attempt in 1981 to study fluctuations. His law of nature coincides with Elliott’s (1934) and challenges Mandelbrot who said there was no such thing. His words “I Predict” make him a classic case for behavioral finance error. His focus on past makes him a market technician. Technical analysis is mainstream today. He also talks about ups and downs, over and under production, cycles in extreme, overestimation and underestimation, interconnections between corn and hog prices, law of oversupply and under demand and over and under production of every commodity. This also seems like a confirmation of Orpheus Performance cycles to me. Benner’s work also confirms the work of Lamprecht who said that history was mathematical.
Time according to Benner was a pattern, a rule that did not change because of war, panic or elections. It was relentless in nature. It was periodical and not haphazard. The rule was unchangeable, determinable. Failures in business were connected with ignorance of ‘Time’. We can judge Benner today, as a farmer or a genius, but that would not change the fact that he was one of the first to see the mathematical hierarchy in ‘Time’.
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