The social market economy (German: Soziale Marktwirtschaft) is the economic system implemented and promoted by most political parties in West Germany since World War II. It is based on the economic philosophy of Ordoliberalism of the Freiburg School. The economic-political instruments were implemented first by Ludwig Erhard, minister of economics under Konrad Adenauer's chancellorship (from 1949 to 1963), and Alfred Müller-Armack, head of the policy department of the ministry of economics.

Model[link]

The social market economy seeks a middle path between socialism and laissez-faire economic liberalism (i.e. a mixed economy), combining private enterprise with government regulation to establish fair competition, maintaining a balance between a high rate of economic growth, low inflation, low levels of unemployment, good working conditions, social welfare, and public services, by using state intervention.^[1] The term "social" was chosen rather than "socialist" to distinguish the social market economy from a system in which the state directed economic activity and/or owned the means of production,^[2] which are usually privately-owned in the social market model.

In a social market economy, collective bargaining is often done on a national level between national employers' organizations and national trade unions, not between individual corporations and unions.

Important figures in the development of the concept include Walter Eucken, Wilhelm Röpke, Alexander Rüstow, Franz Böhm, Franz Oppenheimer, and Alfred Müller-Armack, who originally coined the term Soziale Marktwirtschaft.^[3]

History[link]

At first controversial, the model became increasingly popular in West Germany and Austria since in both states economic success (Wirtschaftswunder) was identified with it. From the 1960s, the social market economy was the main economic model in mainland Western Europe, pursued by administrations of both the centre-right (led by the Christian Democratic Union - CDU & Christian Social Union of Bavaria - CSU) and the centre-left (led by the Social Democratic Party - SPD). In the 1960s, Yugoslavia adopted a modified social market economy and thereafter had average GDP growth of 6.1% for 30 years until the 1980s.^{[citation needed]}

The concept of the social market economy is still the common economic basis of most political parties in Germany^[4][5][6] and a commitment to some form of social market economy was present in the European Union Constitution (a project which was abandoned in 2005 following the negative outcomes of referenda in France and the Netherlands).

Main elements[link]

The main elements of the social market economy in Germany are the following:^[7]

• The social market contains central elements of a free market economy such as private property, free foreign trade, exchange of , and free formation of prices.

• In contrast to the situation in a free market economy, the state is not passive and actively implements regulative measures.^[8] Some elements, such as pension insurance, universal health care and unemployment insurance are part of the social security system. These insurances are funded by a combination of employee contributions, employer contributions and government subsidies. The social policy objectives include employment, housing and education policies, as well as a socio-politically motivated balancing of the distribution of income growth. In addition, there are provisions to restrain the free market (e.g. anti-trust code, laws against the abuse of market power etc.). These elements help to diminish many of the occurring problems of a free market economy.^[9]

See also[link]

• Capitalism
• Socialism
• Criticism of Capitalism
• Criticism of Socialism
• Economic liberalism
• Mixed economy
• Welfare state
• Ordoliberalism
• Social Market Foundation
• Social democracy
• Rhine Capitalism
• Socialist market economy

References[link]

External links[link]

• The Social Market Economy - U.S. Library of Congress
• Essay on Germany's Social Market Economy
• Short Definition from the Economist

A Market Economy is an economy in which decisions regarding investment, production and distribution are based on supply and demand^[1] and the prices of goods and services are determined in a free price system.^[2] This is contrasted with a planned economy, where investment and production decisions are embodied in a plan of production. Market economies can range from hypothetical laissez-faire and free market variants to regulated markets and interventionist variants. Most existing market economies include a degree of economic planning or state-directed activity and are thus classified as mixed economies.

In the real world, market economies do not exist in pure form, as societies and governments regulate them to varying degrees rather than allow full self-regulation by market forces.^[3][4] The term free-market economy is sometimes used synonymously with market economy,^[5] but, as Ludwig Erhard once pointed out, this does not preclude an economy from providing various social welfare programs such as unemployment benefits, as in the case of the social market economy.

There are many variations of market socialism ranging from the cooperative model, where employee-owned enterprises based on self-management are coordinated by markets and output of final goods and services is based on market allocation,^[6] to those based on public ownership of the means of production.^[7]

The term used by itself can be somewhat misleading. For example, the United States constitutes a mixed economy (substantial market regulation, agricultural subsidies, extensive government-funded research and development, Medicare/Medicaid), yet at the same time it is foundational rooted in a market economy. Different perspectives exist as to how strong a role the government should have in both guiding the market economy and addressing the inequalities the market produces. This is evidenced by the current lack of consensus on issues such as central banking and welfare.^{[citation needed]}

Capitalism[link]

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v t e

Capitalism generally refers to economic system in which the means of production are largely or entirely privately owned and operated for a profit, structured on the process of capital accumulation. In general, investments, distribution, income, and pricing is determined by markets.

There are different variations of capitalism and these different variations have different relationships to markets. In free-market and Lassiez-faire forms of capitalism, markets are utilized most extensively with minimal or no regulation over the pricing mechanism. In interventionist, Keynesian and mixed economies, markets continue to play a dominant role but are regulated to some extent by government in order to correct market failures or to promote social welfare. In state capitalist systems, markets are relied upon the least, and the state relies heavily on either indirect economic planning and/or state-owned enterprises to accumulate capital.

Capitalism has been dominant in the Western world since the end of feudalism, but most feel that the term "mixed economies" more precisely describes most contemporary economies, due to their containing both private-owned and state-owned enterprises. In capitalism, prices are decided by the demand-supply scale. For example, higher demand for certain goods and services lead to higher prices and lower demand for certain goods lead to lower prices.

Laissez-faire[link]

Laissez-faire is synonymous with what was referred to as strict capitalist free market economy during the early and mid-19th century as an ideal to achieve. It is generally understood that the necessary components for the functioning of an idealized free market include the complete absence of government regulation, subsidies, artificial price pressures and government-granted monopolies (usually classified as coercive monopoly by free market advocates) and no taxes or tariffs other than what is necessary for the government to provide protection from coercion and theft and maintaining peace, and property rights.

Social market economy[link]

This model was implemented by Alfred Müller-Armack and Ludwig Erhard after World War II in West Germany. The social market economic model is based upon the idea of realizing the benefits of a free market economy, especially economic performance and high supply of goods, while avoiding disadvantages such as market failure, destructive competition, concentration of economic power and anti-social effects of market processes. The aim of the social market economy is to realize greatest prosperity combined with best possible social security. As a difference to the free market economy the state is not passive, but actively takes regulative measures.^[8] The social policy objectives include employment, housing and education policies, as well as a socio-politically motivated balancing of the distribution of income growth. Characteristics of social market economies are a strong competition policy and a contractionary monetary policy. The theoretical fundamental is built on ordoliberalism, Catholic social teaching and Democratic Socialism.^[9]

Market socialism[link]

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v t e

Market socialism refers to various economic systems where the means of production or dominant economic institutions are either publicly-owned or cooperatively-owned but operated according to the rules of supply and demand.

In the Oskar Lange's model of market socialism, prices would be determined by a government planning board through a trial-and-error approach until they equaled the marginal cost of production as to achieve perfect competition and pareto optimality. In this model, firms would either be state-owned and managed by their employees.

A more contemporary model of market socialism is that put forth by John Roemer, where social ownership is achieved through public ownership of equity in a market economy.

The distinguishing feature between non-market socialism and market socialism is the existence of a market in the means of production and the criteria of profitability for enterprises. Profits derived from the public enterprises can either be used to reinvest in production or finance government and social services directly and/or be distributed to the workforce or public at large through a social dividend.

Cooperative socialism[link]

Libertarian socialists and left-anarchists often promote a form of market socialism in which enterprises are owned and managed cooperatively by the workers so that the profits directly remunerate the employee-owners. These cooperative enterprises would compete with each other in the same way private companies compete in a capitalist market. An example would be mutualism.

Socialist market economy[link]

Following the 1978 reforms, the People's Republic of China instituted what it calls a "socialist market economy", in which most of the economy is under state ownership, but the state enterprises are reorganized into joint-stock companies where various government agencies own controlling shares through a shareholder system. Prices are set by a largely free-price system and the state-owned enterprises are not subjected to micromanagement from a government planning agency. A similar system called "socialist-oriented market economy" has been implemented in Vietnam following the Doi Moi reforms in 1986.

However, this system is usually characterized as state capitalism instead of market socialism because there exists no meaningful degree of employee management in the firms, the state enterprises retain their profits instead of distributing them to the workforce or government, and many function as partial or de facto private enterprises.

Criticisms[link]

Robin Hahnel and Michael Albert claim that:

"(...) markets inherently produce class division" (divisions between conceptual and manual laborers, and ultimately managers and workers, and a de facto labor market for conceptual workers)(...)".^{[citation needed]}

Albert states that even if everyone started out with a balanced job complex (doing a mix of roles of varying creativity, responsibility and empowerment) in a market economy, class divisions would arise.

"(...) Without taking the argument that far, it is evident that in a market system with uneven distribution of empowering work, such as Economic Democracy (the model of market socialism David Schweickart has developed and refers to as "economic democracy"), some workers will be more able than others to capture the benefits of economic gain. For example if one worker designs cars and another builds them, the designer will use his cognitive skills more frequently than the builder. In the long term, the designer will become more adept at conceptual work than the builder, giving the designer greater bargaining power in a firm over the distribution of income. A conceptual worker who is not satisfied with his income can threaten to work for a company that will pay him more (...)".^[10]

Therefore according to this critique class divisions would arise inevitably.

See also[link]

• Free market
• Market
• Economic freedom
• Grey market
• Market socialism
• Mixed economy
• Planned economy
• Regulated market
• Controlled market

References[link]

Gay Mitchell MEP
Member of the European Parliament
Incumbent
Assumed office 11 June 2004
Preceded by	Mary Banotti
Constituency	Dublin
Minister of State for European Affairs
In office 20 December 1994 – 26 June 1997
Preceded by	Position established
Succeeded by	Dick Roche
Teachta Dála
In office 11 June 1981 – 24 May 2007
Preceded by	Philip Brady
Succeeded by	Catherine Byrne
Constituency	Dublin South–Central
Personal details
Born	(1951-12-30) 30 December 1951 (age 60) Dublin, Ireland
Political party	Fine Gael
Spouse(s)	Norma Mitchell
Children	4
Alma mater	Dublin Institute of Technology Queen's University Belfast
Website	www.gaymitchell.ie

Gabriel "Gay" Mitchell (born 30 December 1951) is an Irish politician and Member of the European Parliament (MEP) for the Dublin constituency since 2004. He is a member of Fine Gael, part of the European People's Party, and a former Teachta Dála (TD) for the Dublin South–Central constituency from 1981–2007.^[1] He was defeated by Enda Kenny in the 2002 Fine Gael leadership election. Mitchell was the Fine Gael candidate at the 2011 Irish presidential election.

Biography[link]

Gabriel "Gay" Mitchell was born in Inchicore, Dublin in 1951. Gay Mitchell’s mother, Eileen, was left a widow with nine children whom she supported by working as an office cleaner. He was educated at St. Michael's Congregation of Christian Brothers, Emmet Road Vocational School, Dublin Institute of Technology, College of Commerce, Queen's University Belfast.^[2] His brother, Jim Mitchell, was a long-serving Fine Gael TD and former government minister.

Political career[link]

He first became involved in politics in 1979 as a member of Dublin City Council. He was first elected to Dáil Éireann as a Fine Gael TD in the 1981 general election for the Dublin South–Central constituency.^[3] Since then he has served as a Minister of State at the Department of the Taoiseach and the Department of Foreign Affairs with special responsibility for European Affairs. He was the Irish Representative on the Reflection Group which prepared the Amsterdam Treaty.

Mitchell is also a former Lord Mayor of Dublin and, while never holding full cabinet rank, has served on the opposition front bench as spokesperson on Health (2000–2002), Foreign Affairs (1997–2000), Justice (1993–1994), Public Service and Constitutional Reform (1991–1992), Tourism and Transport (1989–1991), European Integration (1988–1989), Urban Renewal (1987–1988) and Health Board Reform (1981–1982).

Following Michael Noonan's resignation as Fine Gael leader in 2002, Mitchell was a challenger in the subsequent leadership election, losing out to the victor, Enda Kenny.^[4] Before his election to the European Parliament, he had been party spokesperson on Foreign Affairs, writing the party's "Beyond Neutrality" policy document.

In November 2006, Mitchell announced that he had taken the difficult decision not to contest the 2007 general election and concentrate on his European seat.^[5] Mitchell is a Vice Chair of the ACP-EU Joint Parliamentary Assembly.

During the 2008 referendum on the Treaty of Lisbon, Mitchell was Fine Gael's director of elections for the referendum.

Mitchell is a member of the European Parliament Committee on Development, the Special Committee on the Financial, Economic and Social Crisis and the delegation to the ACP-EU Joint Parliamentary Assembly. He is also a substitute member of the Committee on Economic and Monetary Affairs and the delegation for relations with the People's Republic of China.

Mitchell is the author of By Dáil Account, the first book published in Ireland on the history and role of the Public Accounts Committee (PAC) and the office of Comptroller and Auditor General. In September 2010, the Brussels-based ‘Parliament Magazine’ named him ‘MEP of the Year’ having previously nominated him for the award.

In June 2011, Mitchell refused to release details of his expense and allowance claims as a member of the European Parliament. ^[6]

Gay Mitchell supports ACTA. ^[7]

2011 presidential campaign[link]

In 2011, Mitchell announced his intention to seek the Fine Gael nomination for the Irish presidential election. On 9 July 2011, he was chosen as the Fine Gael candidate at a special convention.^[8] He announced on The Late Late Show on 30 September 2011 that he expected his campaign for the presidency would cost €350,000.^[9] Mitchell's unsuccessful attempt to bring the Summer Olympic Games to Dublin was also discussed, with the former lord mayor saying he "set up 10 committees" in his attempt to make it happen.^[10]

Mitchell launched his presidential campaign with Taoiseach Enda Kenny on 3 October 2011.^[11] That same day he was involved in controversy when he made a joke about suicide on Newstalk's The Right Hook programme. He promised to "jump off O'Connell Bridge" if he was asked to smile.^[12] Founding Secretary of the Irish Association of Suicidology Dr John Connolly described Mitchell's comment as "unfortunate".^[13]

Clemency pleas[link]

Following the initial withdrawal of David Norris from the 2011 presidential campaign after it was revealed that Norris had sought clemency for his former partner from a statutory rape conviction, it was subsequently pointed out that Mitchell had also sought clemency for a convict, in his case for Army of God member and double-murderer Paul Jennings Hill,^[14] a fact that had been public knowledge for eight years.^[15]

On March 22, 2002 Amina Lawal was sentenced her to death by stoning for adultery and for conceiving a child out of wedlock^[16], as chair of the Oireachtas European Affairs Committee, Mr Mitchell met with the Nigerian ambassador to Ireland to protest the sentence at the time.^[17]

Another convict Mitchell sought clemency for was Louis Truesdale, who was convicted in 1980 of the rape and murder of 18-year-old Rebecca Ann Eudy.^[18] The victim's mother, Evelyn Eudy said that she "was appalled to hear Mr Mitchell was running as a presidential candidate in Ireland". According to newspaper reports when he was questioned about these letters on the 27th August 2011, he "became quite incensed" and revealed that he has written "a number" of clemency pleas.^[19]

Views on homosexuality[link]

On the 12th August 2011 in a radio interview with Pat Kenny when asked for his views on same-sex marriage, Mr Mitchell said he did not want to do anything that “weakens marriage” but had supported civil partnership.^[20] In 2004 Mitchell defended Italian MEP Rocco Buttiglione's remarks when he referred to homosexuality as a sin.^[21]

Mitchell has been questioned as to whether or not he is a member of the European Catholic group Dignitatis Humanae Institute, which he denied on the same radio interview with Pat Kenny,^[22] however according to Benjamin Harnwell, the institute's founding chairman Mitchell helped formulate the charter that became the institute's declaration.^[23] In the same interview Mitchell was also asked whether or not he is a member of the Iona Institute (who reject the notion of same-sex marriages), which he also denied, however in September 2007, he did host a conference (The Fragmenting Family) on behalf of the Iona Institute.^[24]

See also[link]

• Families in the Oireachtas

References[link]

External links[link]

• Official website
• Gay Mitchell's page on the Fine Gael website
• European Parliament profile

v t e « 2004–2009 «   Members of the European Parliament for Ireland (2009–2014)   » 2014–2019 » Dublin *Proinsias De Rossa (LAB / S&D) †Joe Higgins (SP / GUE/NGL) Gay Mitchell (FG / EPP) East Liam Aylward (FF / ALDE) Nessa Childers (LAB / S&D) Mairead McGuinness (FG / EPP) North-West Pat the Cope Gallagher (FF / ALDE) Marian Harkin (IND / ALDE) Jim Higgins (FG / EPP) South Brian Crowley (FF / ALDE) ‡Alan Kelly (LAB / S&D) Seán Kelly (FG / EPP) †Substituted by Paul Murphy on 1 April 2011 ‡Substituted by Phil Prendergast on 21 April 2011 *Substituted by Emer Costello in February 2012

Philip Edmund Booth (October 8, 1925— July 2, 2007) was an American poet and educator; he has been called "Maine's clearest poetic voice."^[1]

Life[link]

Booth was born in 1925 in Hanover, New Hampshire. Booth served in the United States Air Force in the Second World War. He then attended Dartmouth College, where he studied with Robert Frost; he received his B.A. in 1947. He subsequently received an M.A. from Columbia University. Booth married Margaret Tillman in 1946; they had three daughters.^[2] He spent much of his time living in Castine, Maine in a house that has been handed down through his family for five generations.

Booth was an instructor and professor of English and of creative writing at Dartmouth College, Bowdoin College, Wellesley College, and at Syracuse University.^[3] Booth was one of the founders of the Creative Writing program at Syracuse. One of his students, the poet Stephen Dunn, has written of his 1969-70 experience at Syracuse that, "We had come to study with Philip Booth, Donald Justice, W.D. Snodgrass, George P. Elliott, arguably the best group of writer-teachers that existed at the time."^[4][5]

Poetry[link]

Booth's poetry was published in many periodicals including The New Yorker, The Atlantic Monthly, The American Poetry Review, Poetry, and Denver Quarterly. He published 10 poetry collections and one book about writing poetry (see references below).

One of Booth's early poems, "Chart 1203," is indicative of the physical character of some of his poetry and also of his lifelong love of the sea and sailing:^[6]

Whoever works a storm to windward, sails

in rain, or navigates in island fog,

must reckon from the slow swung lead, from squalls

on cheek; must bear by compass, chart, and log.

...

...He weathers rainsquall,

linestorm, fear, who bears away from the sound

of sirens wooing him to the cape's safe lee.

He knows the ghostship bow, the sudden headland

immanent in fog; but where rocks wander, he

steers down the channel that his courage

dredges. He knows the chart is not the sea.

A much later poem, "Places without Names," has a more public concern:^[7]

...

What gene demands old men command young men to die?

The young gone singing to Antietam, Aachen, Anzio.

To Bangalore, the Choisin Reservoir, Dien Bien Phu,

My Lai. Places in the heads of men who have no

mind left. ...

A major essay regarding Booth's poetry was published by Guy Rotella in 1983.^[8]

Awards[link]

Bess Hokin Prize (1955).^[9] Lamont Poetry Prize for Letter from a Distant Land (1956). Saturday Review Poetry Award (1957). Emily Clark Balch Prize of the Virginia Quarterly Review (1964). Theodore Roethke Prize for a poem in Poetry Northwest (1970). Syracuse University Chancellor's Citation (1981).^[10] Fellowships from the Academy of American Poets (1983), the Guggenheim Foundation (1958, 1964),^[11] and the Rockefeller Foundation (1968). Maurice English Poetry Award for Relations (1987).^[12] Poem selected for The Best American Poetry 1999.^[13] Poets' Prize (2001) for Lifelines.

Poetry collections[link]

• Lifelines: Selected Poems, 1950-1999 (Viking Press, 1999). ISBN 0-670-88287-9
• Pairs (Viking Penguin, New York, 1994). ISBN 0-14-058724-1
• Selves (Viking Penguin, New York, 1990). ISBN 0-14-058646-6
• Relations (Viking Penguin, 1986). ISBN 0-14-058560-5
• Before Sleep (Viking Adult, 1980). ISBN 0-670-15529-2
• Available Light (Viking Adult, 1976). ISBN 0-670-14310-3
• Margins (Viking Adult, 1970). ISBN 0-670-45623-3
• Weathers and Edges (Viking Adult, 1966). ISBN 0-670-75509-5
• The Islanders (Viking Adult, 1961). ISBN 0-670-40221-4
• Letter from a Distant Land (Viking, 1957). ASIN B000BYR9AE

Additional bibliography[link]

• Booth, Philip (1996). Trying to Say It: Outlooks and Insights on How Poems Happen (University of Michigan Press, Ann Arbor). ISBN 0-472-06586-6
• Booth, Philip and Ibatoulline, Bagram (2001). Crossing (Candlewick) ISBN 0-7636-1420-3 . Children's book based on the poem "Crossing" from Letter from a Distant Land; the book was illustrated by Ibatoulline.

References[link]

1. ^ "Wilson Museum calendar, 2006". Archived from the original on 2006-09-09. http://web.archive.org/web/20060909223001/http://www.wilsonmuseum.org/calendar_details.html. 
2. ^ Heydarpour, Roja (July 9, 2007). "Philip Booth, a Shy Poet Rooted in New England Life, Dead at 81". The New York Times. http://www.nytimes.com/2007/07/09/arts/09booth.html?ex=1341806400&en=2dcb0f2ff2f3ff23&ei=5124&partner=permalink&exprod=permalink. Retrieved 2008-07-27. 
3. ^ "Philip Booth". Academy of American Poets website. Archived from the original on 2009-03-15. http://www.webcitation.org/5fIC0YuN2. 
4. ^ Dunn, Stephen (Fall 2006). "Larry Levis in Syracuse". Blackbird: An Online Journal of Literature and the Arts. Archived from the original on 2008-07-27. http://www.webcitation.org/5ZdaHBZAw. 
5. ^ George P. Elliott (1918-1980) was an American author, poet, and educator. Elliott's papers are in the Washington University Library; see "Finding-aid for the George P. Elliott papers," retrieved December 22, 2006.
6. ^ "Chart 1203" was included in Booth's first, 1957 collection Letter from a Distant Land; it was included again in his last collection Lifelines: Selected Poems, p. 7.
7. ^ "Places without Names" was first included in Booth's 1994 collection Pairs, and was included also in his last collection Lifelines: Selected Poems, pp. 227-228.
8. ^ Rotella, Guy (1983). Three Contemporary Poets of New England: William Meredith, Philip Booth, and Peter Davison (Twayne Publishers, Boston). ISBN 0-8057-7377-0 .
9. ^ "Bess Hokin Prize". The Poetry Foundation. http://www.poetryfoundation.org/poetrymagazine/prizes.html#hokin. Retrieved 2012-05-28. 
10. ^ "The Chancellor's Citation". Archived from the original on 2006-10-05. http://web.archive.org/web/20061005004013/http://archives.syr.edu/arch/award/cita.htm. 
11. ^ Listing of Fellows, John Simon Guggenheim Foundation website. Retrieved December 20, 2006.
12. ^ International Who's Who of Authors and Writers 2004. Routledge. 2003. p. 64. ISBN 1-85743-179-0. http://books.google.com/books?id=phhhHT64kIMC. Retrieved 2008-07-20. 
13. ^ "Narrow Road: Presidents' Day," from The American Poetry Review. Reprinted in Bly, Robert (1999). The Best American Poetry 1999 (Scribner, 1999). ISBN 0-684-86003-1

Further reading[link]

• Dunn, Stephen (2008). "Philip Booth (1925–2007): A Remembrance". Stone Canoe (2). http://www.stonecanoejournal.org/issues/2008/selectedworks/dunn.pdf. 
• "Philip Booth", biography and critical appreciation posted at the website of The Poetry Foundation. Retrieved August 2, 2007.

External links[link]

• "Post-Equinox Spectra", poem posted at website of Beloit Journal of Poetry. Retrieved December 21, 2006.
• "Adding It Up" and "Terms" are posted at the website of The Poetry Foundation. Retrieved December 21, 2006.
• 12 poems posted at the PoemHunter.com website; retrieved December 21, 2006.
• Love's Ways: Three Songs to Poems by Philip Booth composed in 1996-7 by Arnold Berleant. The poems are "First Song", "Chances", and "The Dancer".
• Nancy Ogle's performance of "Chances", a song by Arnold Berleant based on Booth's poem of the same name.

Robert R. Prechter, Jr. (b. 1949) is an American author and stock market analyst, known for his financial forecasts using the Elliott Wave Principle. Prechter is an author and co-author of 14 books, and editor of 2 books ^[1], his book Conquer the Crash is a New York Times bestseller.^[2] He also has published monthly financial commentary in the newsletter The Elliott Wave Theorist since 1979, and is the founder of Elliott Wave International and New Classics Library.^[3][4] Prechter served on the board of the Market Technicians Association for nine years, and as the Association's President in 1990-1991. In recent years Prechter has supported the study of socionomics, a theory about human social behavior.^[5][6]

Biography[link]

Prechter attended Yale University and graduated with a B.A. degree in psychology in 1971. His career as an analyst began when he joined Merrill Lynch as a market technician in 1975, where he learned much about the trade from Merrill's Chief Market Strategist, Robert Farrell (June 1982).^[4][7] There Prechter also learned of Ralph Nelson Elliott and the Elliott wave principle and was deeply intrigued:

So I tracked down R.N. Elliott's original books. They weren't even in the Library of Congress. But I finally dug around in the New York Public Library and found a catalog card listing a copy of them on microfilm and had photocopies made. I was amazed to find that there was a wealth of information that had been lost to Wall Street.^[8]

Prechter has also said, "after I decided to make markets a career, I realized that mass psychology is what they're all about." ^[8]

Prominence[link]

In 1979 Prechter left Merrill Lynch and published the first subscription issue of the Elliott Wave Theorist. The 1970s had been very bullish years in the gold market but mostly bearish for stocks, yet his Elliott wave analysis called for a long-term reversal lower in gold (February 1980)^[4][9] and a long-term "super bull market underway" in stocks (October 1982).^[4][10] Because these forecasts proved mostly correct—especially for the stock indexes—Prechter's following grew.

His visibility increased further after he won the U.S. Trading Championship in 1984, with a then-record 444% return in a monitored options trading account.^[11] He was profiled in many financial and business publications and named "Guru of the Decade" by the Financial News Network (now CNBC) for the 1980s.^[12]

Prechter has been forecasting a large-scale bear market, as explained in his book Conquer the Crash.^[13]

Re-introduces Elliott[link]

Much of Prechter's career as a publisher includes his efforts to re-introduce R.N. Elliott's wave principle to investors.^[7] He compiled and republished all of Elliott's available writings, including the 1938 "Wave Principle," and the "Interpretive" and "Forecast" letters (1938–1946). Prechter also published a brief biography of Elliott and the collected Elliott wave writings of the few technicians who practiced wave analysis in the 1950s and 1960s (Charles Collins, Hamilton Bolton, A.J. Frost, Richard Russell).

Still, not all the popular exposure to Elliott wave analysis was the result of Prechter's deliberate efforts. In the few years before and after 1987, media coverage inflated Prechter's "guru" status to extremes, including the assertion that his forecasts could single-handedly "cause" the stock market to rise or fall^[14] (a proponent of technical analysis, Prechter considered this absurd). In the months after Black Monday in October 1987, subscriptions to Prechter's Elliott Wave Theorist surged to some 20,000. That number declined in the early 1990s (as did the subscription levels of most other financial publishers), though "Prechter has done more to popularize and spread Elliott's philosophy than anyone else."^[15]

Socionomics[link]

In 1979, Prechter postulated that social mood drives financial, macroeconomic and political behavior, in contrast to the conventional notion that such events drive social mood.^[16] His description of social mood as the driver of cultural trends reached a national audience in a 1985 cover article in Barron's.^[17] Prechter coined the term "socionomics" and in 1999 published an exposition of socionomic theory, The Wave Principle of Human Social Behavior.^[5] In 2003, he published an anthology of empirical work in the field, Pioneering Studies in Socionomics.

Since then, the counter-intuitive premise of the socionomic hypothesis—that social mood drives the character of social events—has gained attention in academic journals,^[18][19][20] books,^[21][22] the popular press,^[23][24][25] universities,^[26] academic conferences^[27][28] and in research funded by the National Science Foundation.^[29][30]

Criticism[link]

While Prechter has his admirers, he has been criticized by media and pundits for his long term record. For example, The Wall Street Journal ran a page one article in August 1993 with the headline, "Robert Prechter sees his 3600 on the Dow – But 6 years late," in reference to Prechter's 1987 forecast for the Dow Jones Industrial Average.^[31] Technical analyst David Aronson wrote:

The Elliott Wave Principle, as popularly practiced, is not a legitimate theory, but a story, and a compelling one that is eloquently told by Robert Prechter. The account is especially persuasive because EWP has the seemingly remarkable ability to fit any segment of market history down to its most minute fluctuations. I contend this is made possible by the method's loosely defined rules and the ability to postulate a large number of nested waves of varying magnitude. This gives the Elliott analyst the same freedom and flexibility that allowed pre-Copernican astronomers to explain all observed planet movements even though their underlying theory of an Earth-centered universe was wrong.^[32]

Notes[link]

References[link]

• Essentials of Technical Analysis for Financial Markets by James Chen. Published by John Wiley and Sons. ISBN 978-0-470-53729-9.
• Socionomics: The Science of History and Social Prediction by Robert Prechter. Published by New Classics Library. ISBN 0-932750-57-5.
• Prechter's Perspective by Robert Prechter. Published by New Classics Library. ISBN 978-0-932750-61-7.
• Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals by David R. Aronson. Published by John Wiley and Sons. ISBN 978-0-470-00874-4
• Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression (2 ed.) by Robert Prechter. Published by John Wiley and Sons. ISBN 978-0-470-56797-5.
• Behavioral Trading: Methods for Measuring Investor Confidence and Expectations by Woody Dorsey. Published by Texere. ISBN 1-58799-164-0.

External links[link]

• Robert Prechter.com
• Socionomics Institute