This article isn’t about technology. Well, I did warn about the odd excursion and I just felt this subject was interesting enough to pursue for a while.
According to Wikipedia, a Black Swan event is one “that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight”.
The status quo
I’ve been reading “The Establishment, and how they get away with it” by the noted left-wing author Owen Jones, who describes how the centre ground of politics has moved decisively to the right over the past two or three decades. Without a balancing work from a right-wing source (which I suspect would be far less readable) it’s difficult to form an objective view of the subject, so I’m not going into whether I agree or not. I’m more interested in how change comes about.
Owen Jones describes persuasively the mechanisms that have caused the shift in the centre ground, from where – for example – it was once considered right and proper for essential services such as water, power and transport to be maintained as public services, to the position now where such utilities are run as private companies answerable only to shareholders, yet picking up huge state subsidies without which they could not continue to function.
It is quite permissible to regard this shift as either a good or a bad thing, depending on your choice of assumptions to underpin it, and I’ll leave the arguments to better minds than my own. What interests me is the belief held by both sides that change of this kind can be managed.
We’ve had an extraordinary couple of decades where things have apparently moved in a controlled manner, but I think there are reasons to believe this can’t last much longer. The economic shocks of 2008 were a warning, but the conventional wisdom has it that these were an unfortunate blip caused by one-off events that can – by prudent management – be prevented from happening again. I think this is desperately over-optimistic and I don’t believe it for a moment.
Trouble in Blighty
I apologise to any non-British readers for using a British perspective, but it’s the one with which I’m most familiar. Here are a few items, in no particular order:
- The Scottish Nationalists (SNP)
- Jeremy Corbyn
- Mass migration
- Climate change
Let’s start with the first three. The SNP and Labour under its new leader both represent a major deviation from the centre ground currently occupied by the Conservative government by virtue of its election victory in May. Both are hostile to the austerity programme promoted by the Establishment (which includes the government and most of business) as the only sensible way to get the economy back onto safe ground. Now given the overall majority enjoyed by the government this may not be considered to matter very much, but in truth our system only works with the consent of the people, and there is always a tipping point at which countries become ungovernable.
The SNP are adeptly persuading Scots that the Westminster government is indifferent or even hostile to their wishes, and there’s little David Cameron can do to change that belief without alienating his core support from the City and the South East. The current hostility in England to the EU is making this worse; the Scots have no desire to be taken out of Europe and the more likely this becomes the more they will close ranks and demand another referendum. David Cameron is determined not to go down in history as the prime minister who presided over the break-up of the United Kingdom, so he might be wise to advance his retirement plans and leave this particular poisoned chalice to someone else.
Enter Labour under Jeremy Corbyn. Although the Establishment pretends otherwise, his success has been in mobilising not those voters who failed to back Labour at the election but those who failed to vote at all. There are rather a lot of them. Mr Corbyn is seen by them – and others – not as a left-wing politician but as a non-politician, since he refuses to indulge in the usual “game” of politics. It’s surprising how sensible he sounds, not at all in line with his reputation as a rabid left-wing trouble-maker. I believe he may be a new Teflon Man, to whom little of the usual mud will stick; instead most of what is thrown at him will ricochet back to those who flung it, making them look ridiculous, spiteful and pathetic.
Let’s leave domestic politics for a moment and look across the continent. Although the British obsess over all things European, mass migration may turn out to be the thing that really hits us hardest. So far we’ve only seen the very start of what’s coming. Britain has to play its part – it can’t cut itself off completely from its neighbours without alienating them, and this can only lead to withdrawal of cooperation by both sides and on all fronts. If this happens we may find ourselves living in splendid isolation under a more hard line, right-wing version of the present Tories, or the SNP and Labour may become the beneficiaries and take us sharply left, but whoever is left holding the baby will find themselves with problems beyond our current imagining. There is no sign of any reduction in the number of wars in North Africa and the Middle East, and with possibly millions of arrivals from countries very different to our own there will be culture clashes all over Europe. We may find the whole continent becomes a very different and less comfortable place to the one we are used to.
It’s hard to tell if climate change should be on the list. Perhaps not for the short term, but in the longer term it will bring many more pressures on agriculture, food sources and energy.
The Black Swan
So where’s the Black Swan in all this? Well, it’s an unpredictable (by definition) event or series of events arising from a combination of any or all of the above factors. Or something else completely, such as a giant meteorite strike. Economic life hangs by a thread, being that of confidence. If people believe things will continue much as they always have, they will behave as they always have. As soon as they believe otherwise all bets are off. Remember the tanker drivers’ strike of 2000? The panic brought about by motorists’ fears of not being able to fill up their tanks brought near chaos to the country and is a salutary reminder of how close we can get to complete economic collapse when things don’t go as expected.
The job of the government and its allies is to hold the tiller and maintain a course, yet storms are brewing on all sides. My point – finally – is that if they fail, nobody will see it coming, just as they didn’t in summer 2000 when the fuel suddenly ran out, or in late 2007 when the entire economic order wobbled and nearly collapsed. My personal belief is that within the next few years a major black swan event will come; it may be one of the above or something completely from left field, it will be a lot worse this time and it unless we are very lucky it will shake our society to the core. As the Chinese curse goes, “May you live in interesting times”.
Just as I was about to post this article the VW scandal broke. The company has apparently been deceiving – well, the whole world, I guess – about the green credentials of their diesel engines. Within hours their stock price fell into the toilet, and it’s quite possible that some of their rivals will be following them. The stock market index dropped like a stone and we can only guess what it will do to VW sales. Now that’s what I call a Black Swan event.