This and every Christmas, our attention eventually turns to our true love, and his/her gift of seven-swans-a-swimming (along with six geese-a-laying, five gold rings, four calling birds, and all that other kit).
Here are seven Black Swans that figure in this year’s headlines.
Black Swans? Nassim Nicholas Taleb, in his best-selling book, Black Swan: The Impact of the Highly Improbable, has famously pinned this label on unlikely, high-consequence events. He tells us they share several common properties: “First, [each] is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.”
Examples sometimes given? The Japanese attack on Pearl Harbor, whose 70th anniversary was observed this past week. The rise of the Internet (note that some Black Swans can be beneficial). The 9/11/2001 terrorist attack. Hurricane Katrina’s strike on New Orleans. The 2008 global financial-sector meltdown. In each event, post hoc study finds plenty of signs that prompt us to conclude, “They (we) should have seen this coming, and taken action.”
Anything similar we might have to contend with in the future? What are the world’s circumstances and this particular point in history offering up as Black Swans? Here are seven candidates.
A large asteroid impact. “Far-fetched,” you say. Well, 2005 Yu55 came near enough, didn’t it? And almost all seven billion of us are basically doing little more than sleepwalking through this and other narrow astronomical escapes. We say, “Wow, that’s coming pretty close. But it’s going to miss. What’s for dinner tonight?” There’s little thought along the lines of what would we do if, or, more accurately, what will we do when? One of these days, a similarly precise orbital calculation will predict a collision instead of a mere pass-by. And it’s time now to think through the consequences, and what actions we’ll take. Wait instead until a collision is, say, only six months out, and we’ll find very few options available to us.
Adverse environmental consequences of fracking. When you read the articles and look at the web material, do you get the idea that fracking is the answer to the maiden’s prayer? Energy. In the large amounts we need. Available domestically, instead of from dicey sources abroad. Cheap – so far. In a form we’re used to using; the needed infrastructure is all in place. Clean compared with the coal we might otherwise burn. Seem too good to be true? Maybe. Take, for example, EPA’s report released Thursday. We risk groundwater pollution. Increased earthquake activity. And somewhat slowed, but nevertheless rising, greenhouse gas concentrations. And we’re consuming huge amounts of needed water. Such unintended consequences of fracking are only slowly being identified and documented. But the practice of fracking is growing explosively, on every continent. Any unwanted side effects may well prove to be manageable (like that asteroid near-miss). But if things get messy, they could get messy on a massive, expensive scale.
A collapse of the Euro. For months the Europeans – and their international creditors – have been fixated on this. They’ve watched EU leadership bicker and dither and attempt a series of last-minute rescues. Each attempt thus far has fallen a bit short – forcing another go around in a few weeks. Each successive attempt has perforce been more extreme. It remains to be seen whether this latest settlement, agreed upon by the entire EU with the exception of Great Britain, will prove sufficient where the others have failed. Ordinary Asians, Americans, and Africans have idly watched from what we all presume to be the sidelines. Analysis suggests this complacency is misguided…that a failure of the Euro will ricochet around the world’s financial system much as America’s stock market bubble set into motion the chain of events leading to the Euro’s current crisis: immediate losses in the trillions of dollars, followed by an extended recession and accompanying high unemployment. Again, a near miss is possible…keep hoping!
An attack on, or failure of, our global cyber infrastructure. This week’s main story covered a cyber threat from a few years back to our military. The threat? Known as Agent.btz or Agent.AWF. Google the names; you’ll find Wikipedia entries and more. Agent.btz’s weapon of choice? Apparently a thumb drive. Hmm. A lot of those around. The challenge here is the blistering pace of technological advance, matched by quick societal uptake. With seven billion people and a $100 trillion dollar world economy we’ve desperately needed all this capability and have put it to widespread use as soon as it’s come available. IT underpins our entire society. Supervisory control and data acquisition (SCADA) systems manage all of our critical infrastructure…energy, food, water, transportation, health, financial… Our new and growing dependence has outstripped our experience with emerging vulnerabilities. Identity theft? Computer viruses and worms we’ve seen so far? They’re only the merest first hints of a downside to information technology put into place decades ago. Newer, bigger, more daunting problems are coming. This is perhaps the blackest of the seven black swans.
A global food shortage. Science and technology of the past few decades have outstripped or kept pace with population growth over the same period. But innovation seems to be slowing, at least for the intermediate term. And biofuel demand is now competing with food for arable land. Costs are spiking, and impoverished, vulnerable populations face spot shortages even now.
Climate change. This morning, the folks at Durban seem to be reaching an agreement. But what kind of agreement? Looks to be a last-minute compromise to keep the Kyoto accords in force for a few more years while we commit to continue working toward a possible new treaty that might come into force in 2015. Or 2020. In the meantime, fossil-fuel use and carbon emissions continue to rise – faster than ever. We’re gaining an appreciation for what’s involved in the needed climate adaptation, but we’re moving slowly. Suppose those Kyoto negotiators had been told fifteen years ago that’s all the progress we’d have to show today for their efforts. They’d have been dismayed.
The rise of social networking. Ah…at last, some possibly good news. That, and the IT revolution at its root, continue to be one of the more promising Black Swans. Together? They hold the potential for surmounting these other challenges. Why? Because they allow, even encourage, the harnessing of seven billion minds to solve Black-Swan and more mundane challenges.
Why these seven Black Swans? You have already thought of more, haven’t you…maybe a pandemic, maybe nuclear war…and we should hold a place or two for one or more of Donald Rumsfeld’s unknown unknowns.
So why these seven? And why today? Each is a threat without precedent (the one good Black Swan excepted; it is an opportunity such as we’ve not seen before). Each –unlike some of those notional Black Swans of the past – is a global threat, or has the potential to be so. As each occurs, there will be no unaffected populations able to carry on. And each is figuring in the news, in some guise, every day. Afterwards, however dazed, we won’t be able to say we hadn’t a clue. Here’s a final reason for this group: all are interconnected, and all are pieces of the sustainability puzzle our generation is working through.
Let’s go back to that seventh Black Swan: the social networking made possible by IT. But that social networking is only potentially helpful. We could opt to use that tool to facilitate our collaboration on things that matter. But there’s an alternative. We could settle for using social networking to increase gossip, to build cliques, and to accelerate the spread of envy, hate, cynicism, division.
Why mention this? For two reasons. First, when we check out social networking sites we find evidence of good and bad at work. Rather mirrors the human condition, wouldn’t you say? So, this, too becomes a global challenge we should address.
Fortunately this one isn’t at all expensive. It’s entirely under our control. Moreover, during this season, if ever, is our opportunity to get that seventh Black Swan working for us, not against us: to build our store of “peace on earth, good will toward men.”
A big reservoir of such good will? A recognition that our fates are intertwined, shared; that we’re fundamentally interdependent? The best possible starting point for handling any big problems that may come up.
Bill, a Black Swan, as defined by Taleb, is unexpected. I don’t think any in your list qualify. For example, many economists advised that the Eurozone could never work, and the recent crises have been a long-time coming, with much expert comment predicting that such a crisis was inevitable. The formation of the EZ was a bad political decision, consciously going against economic advice, and has been precipitated by further bad political decisions resulting in insupportable national debt. Not even a Grey Swan.
Similarly, the other possibles you cite are all on the radar. Black Swans in those areas would go beyond what you consider – for example, if we woke one morning to find that artificial intelligence had taken over the world as we slept; if fracking released previously unknown kraken-type creatures.
The main message for me from Taleb’s book is one that I had already learned: many aspects of the future can not be predicted as extensions of the present: there will be many unexpected, and often critical, events, some with far-reaching consequences. The policy answer is to build-in resilience and adaptability through the choices we make today: not preparing extensively for a particular event such as a massive asteroid strike, which (a) at present would appear to be unlikely for at least several thousand years, and (b) might not be survivable whatever we do; but building in flexibility in our political, economic and educational systems; accepting that the science is never “settled,” and life will not always proceed on a well-determined and comfortable path.
Unfortunately, people prefer to be comfortable, to deny change and uncertainty. I read recently a suggestion that this arises because for most of mankind’s existence, you needed to be alert to sudden dangers such as predators, fires, storms, in between times you just got on with life without thought of the future. In our more complex world, as you realise, that is no longer sufficient. But trying to build-in protection against all possible contingencies (e.g. planning for global cooling as well as global warming) is not feasible, there are so many possibilities that we would be paralysed by indecision or committing most of our resources to deal with future threats which in most cases would not eventuate. Just, as Baden-Powell said, “Be prepared!”
Thank you, Michael…Your comment is spot on. And you give me opportunity to express a concern I had about this post. When I look at the events that others have listed as Black Swans, they seem indeed to have been foreseeable: hostilities with the Japanese had caused concern well before Pearl Harbor. The 9/11 attack? The World Trade Center had been a target in 1993. Hurricane Katrina. Reporters like Mark Schleifstein and others had warned of the event and the consequences years earlier. Many had been concerned about the financial markets prior to 2008. And so on. Taleb himself points out that in hindsight all these events seem obvious…but even making such allowances, there were those who saw these and other events on the horizon.
Actually, the event that seems to have been more dramatic and consequential than most had expected was the rise of the Internet — and many of these consequences have been positive. [Reason for hope there? Maybe.]
As for preparing for the infinity of possibilities out there, I favor general capacity building and resiliency-building. A focus on building community, and eliminating poverty; improving education and opportunity; equipping leaders and fostering social networks? These are the best preparations for whatever may come our way.
The other side of your story, “peace on earth, goodwill toward men,” is, of course, more important. But how do we achieve this? Only from each individual developing peace within themselves, having goodwill towards themselves rather than tensions and dissatisfaction, and sharing this with others. From replacing a focus on “I, me, mine” with an awareness that we are all part of an ever-changing whole each of us with similar problems . Eminently possible, but perhaps harder to bring about change internally than to develop sensible policies to cope with external change.
Again, you’re right on target. At the end of the day, looking back, most of us see that the real challenges are spiritual…not the most popular word or notion these days, but one that merits more attention.