Wilder: On Black Swans

From John Wilder: "Black Swans: Interconnected, Nonlinear, and Ready to Ruin Your Day." He explains:

     I’ve read enough history to know that the world doesn’t change in smooth straight lines.  When change hits, it lurches.  One day everything seems stable and the peasants are happily tilling the fields, and the next they’re communists busy storming the Bastille.

    That’s the Black Swan.

    Nassim Nicholas Taleb laid the definition out in his book The Black Swan.  A real Black Swan isn’t just a surprise.  It has three traits.

    First, it’s an outlier, so far outside what most expected that the past gives zero warning.

    Second, it carries an extreme impact, the kind that reshapes economies, governments, or entire ways of life.

    Third, after it hits, we humans can’t help ourselves: we retroactively “explain” it like it was obvious all along.  

Wilder looks at several black swans over the past century starting with the Assassination of the Archduke Ferdinand setting in motion the events that led to WWI up through the shutdowns due to Covid-19 in 2020. He also explains why he thinks we are more susceptible to a Black Swan event than we have been in a long time:

    We are in a world where I think more Black Swans are imminent, because there are groups that are actively shaking the foundations of the way the world words.

    Like China.  China’s economic ascendency isn’t some slow rise.  It’s unrestricted economic warfare, exactly like the Chinese generals described in their book.  They’ve gutted our manufacturing base while we cheered “free trade.”  They control rare earths, solar panels, pharmaceuticals, and now a big chunk of silver production and refining.  One policy tweak in Beijing and entire U.S. industries seize up.

    That’s not theory.  It’s happening.

But that is not all that could topple the global house of cards.  John goes over some other shaky foundation stones. 

    I like to think back to the so-called Arab Spring. Do you remember what touched off the protests across the Arab world? A guy in Tunisia setting himself on fire because of the petty corruption and harassment from government officials. Now that was a black swan. 

    The set up for the Bronze Age Collapse was decades long droughts that strained the relationship between the rulers and ruled as crops failed. And because of the strong interlinked trade relationships, it impacted not just the countries suffering from the drought but groups that lived outside the great Bronze Age civilizations. And then one day something snapped: people started burning the cities of their rulers, others became pirates, local rulers started raiding other settlements, and over a matter of decades, the  wealthy kingdoms and empires of the Late Bronze Age had mostly collapsed and the Eastern Mediterranean and Near East entered a dark age. 

    And the reason that I focus on the Bronze Age Collapse is because I view our world as being more like that of the Late Bronze Age than the closing days of the Western Roman Empire. We live in a world of multitude of countries so closely connected and dependent on trade that the fall of one or two major players will set off a cascade that will drag down most of the rest of the great powers.