Balance of Power, Columns, Energy, Environment, Government, Jobs, Lifestyle

Black Swans and why History, Future. Now is not bleak


Nassim Nicholas Taleb is famous for his 2008 book, The Black Swan, in which he came up with a very simple idea: that big changes can suddenly happen, apparently out of nowhere.  He uses the Wall Street crash, Pompei and the internet as examples. The reality, is actually closer to Malcom Gladwell’s 2002 book, The Tipping Point: How Little Things Can Make a Big Difference, which argues that there is a gradual build up of events that reach a tipping point, resulting in big changes that merely appear to come out of nowhere.

History, Future. Now. sees the world through a similar lens, but believes that history can be used as a guide to filtering out the key elements of the present to provide a tantalising view of a future that may await us.  Many people in Western Europe and the United States believe that our innovation and creativity will allow us to overcome the myriad of problems that they agree exist.

This belief, which borders on religious ferver, is underpinned by two major factors.  First, is that despite the occasional up and down, life since the Second World War has been a positive trajectory to a better world.  Our standard of living has improved and improved. Parents could expect their children to have a higher standard of living than they did.  Second, is that this optimistic perspective blinkers people from the fact that significant changes happen all of the time in history.  We are like the turkeys in Taleb’s The Black Swan:

“Consider a turkey that is fed every day.  Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race “looking out for its best interests,” as a politician would say.  On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey.”

A quick scan of 200 years of modern history would suggest that radical changes happen all of the time which have significant impacts:

  • 2012 Collapse of dictatorships across North Africa, potentially introducing (moderate?) Islamic governments on the EU’s doorstep, with high numbers of unemployed young males;
  • 2001 Islamic terrorist attack on New York and Washington, propelling America into both increased militarism and isolationism;
  • 2001 entry of China into the WTO, propelling China to the forefront of global manufacturing and a mirrored weakening of manufacturing in the West;
  • 1992 Collapse of the Soviet Union, creating dozens of new nation states and unlocking the developing world and China;
  • 1989 Fall of the Berlin Wall, a precursor to the collapse of the Soviet Union;
  • 1945 Atomic bombs on Hiroshima and Nagasaki, ushering the nuclear age and possible destruction of all life;
  • 1939 Start of Second World War, resulting in the collapse of European Empires and the rise of the United States and Russia.
  • 1917 Russian Revolution, resulting in a global ideological balance of power struggle;
  • 1914 Start of First World War, a destabilising European civil war between ruling family members that triggered the loss of European hegemony and laid the foundations of the Second World War;
  • 1861 Start of American Civil War, the beginning of the end of America’s anomalous racial apartheid;
  • 1803 Napoleon’s sale of Louisiana territory to the United States, opening up the entire continent to the Americans.

So why do so many people in the West think that the following are not major challenges which could radically change how we live:

  • An additional 3-4 billion people, bringing the population to 10-11 billion by 2050;
  • Global warming, resulting in increased droughts and flooding and the consequent knock on effect of food crop yields and food prices;
  • The end of cheap oil, as declining production and increased global demand results in higher energy costs with a knock on effect on food, manufacturing and global trade;
  • The collapse of global fisheries, with the knock on effect on food availability and prices;
  • Improvements in automation, 3D printing and computer intelligence, with the knock on effect on global unemployment levels;
  • Erosion of tax bases in developed countries, with consequent impact on pensions and health care;
  • Changing balance of economic and political power between West and China.

Each one of these changes could have a significant impact on our lives.  The world in which we currently live has multiple challenges coming from multiple angles of attack.  Our ability to dodge all of the challenges is low.  The likelihood of being hit by a number of them all at the same time is high.

When they do hit, they will appear to be similar to Malcom Gladwell’s The Tipping Point, a single event that seems to have come out of nowhere.  This will be an illusion.

Our cultural, political and business leaders need to think more about the lessons of the past and to use those lessons to help prepare ourselves for the great challenges of the future. Our cultural leaders need to help shift our political systems away from short term political considerations caused by permanent political campaigning and our businesses away from short term business considerations caused by quarterly accounting.

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