There is a rhythm in modern societies that runs deeper than any election cycle or business cycle. It is the pendulum between two orientations: one that favours the individual and one that favours collective institutions. Neither orientation is permanent. Each creates the conditions for the other.

In an individualist era, markets are deregulated, taxes tend to fall, social safety nets are trimmed, and the cultural mood celebrates personal achievement, entrepreneurship, and self-reliance. These eras produce innovation, speculative excess, and rising inequality. The economy booms, but the distribution of the gains becomes increasingly uneven. Think of the 1920s, or the period from roughly 1980 to 2020.

Eventually the excess builds to a point where the system strains. Inequality generates political instability. The institutions that were hollowed out during the individualist era can no longer perform their basic functions. A crisis, whether financial, military, or political, forces society to rebuild collective structures: stronger regulation, larger fiscal programmes, higher taxes on the wealthy, and renewed investment in shared infrastructure. This is the institutional era. Think of the 1930s through the 1960s.

The reason this matters for markets is that each orientation creates a fundamentally different investment environment. Individualist eras favour financial assets, deregulation plays, and capital-light businesses. Institutional eras favour real assets, commodities, infrastructure, and the sectors that benefit from government spending. Inflation tends to be lower in individualist eras (until the speculative excess creates a crisis) and higher in institutional eras (because fiscal spending puts money directly into the economy).

If the pendulum is swinging from an individualist era toward an institutional one, which the political and fiscal evidence increasingly suggests, then the playbook that worked for the last four decades may not work for the next two. The assets that thrived on deregulation, low interest rates, and financial engineering may underperform relative to the assets that benefit from government investment, re-industrialisation, and the repricing of real resources.

Knowing where the pendulum sits does not give you a monthly trade. It gives you a decade-long orientation. And over a decade, orientation matters far more than timing.

Where Australia Sits in the Cycle

Australia never fully dismantled its institutional framework the way the US or UK did during the neoliberal decades: compulsory superannuation, a universal healthcare system, and a relatively progressive tax structure survived largely intact. The swing toward individualism expressed itself differently, through housing financialisation, growing private debt relative to income, and a wealth effect concentrated in property rather than equities.

If the institutional pendulum is genuinely turning, Australia’s policy space is different: there is no superannuation system to build because it already exists, no healthcare coverage gap to fill. The pressure points are housing affordability, energy transition infrastructure, and the fiscal cost of an ageing population. Investors who assume the Australian cycle will mirror the American one are importing a template that does not fit the local structure.