Posted on 11/26/2010 11:41:04 AM PST by DeaconBenjamin
Paradoxically, one can make long-term predictions on the basis of the prevalence of forecasting errors. A system that is over-reliant on prediction (through leverage, like the banking system before the recent crisis), hence fragile to unforeseen “black swan” events, will eventually break into pieces.
Although fragile bridges can take a long time to collapse, 25 years in the 21st century should be sufficient to make hidden risks salient: connectivity and operational leverage are making cultural and economic events cascade faster and deeper. Anything fragile today will be broken by then.
The great top-down nation-state will be only cosmetically alive, weakened by deficits, politicians’ misalignment of interests and the magnification of errors by centralised systems. The pre-modernist robust model of city-states and statelings will prevail, with obsessive fiscal prudence. Currencies might still exist, but, after the disastrous experience of America’s Federal Reserve, they will peg to some currency without a government, such as gold.
Companies that are currently large, debt-laden, listed on an exchange (hence “efficient”) and paying bonuses will be gone. Those that will survive will be the more black swan-resistant—smaller, family-owned, unlisted on exchanges and free of debt. There will be large companies then, but these will be new—and short-lived.
Most of the technologies that are now 25 years old or more will be around; almost all of the younger ones “providing efficiencies” will be gone, either supplanted by competing ones or progressively replaced by the more robust archaic ones. So the car, the plane, the bicycle, the voice-only telephone, the espresso machine and, luckily, the wall-to-wall bookshelf will still be with us.
The world will face severe biological and electronic pandemics, another gift from globalisation.
Religious practice will experience a revival, seen as a conveyor of robust heuristics, cultural values and rituals. Science will produce smaller and smaller gains in the non-linear domain, in spite of the enormous resources it will consume; instead it will start focusing on what it cannot—and should not—do.
Finally, what is now called academic economics will be treated with the same disrespect that rigorous (and practical) minds currently have for Derrida-style post-modernist verbiage.
I love this guy’s writing. And I myself am concerned about the collapse of major organizations and even nation states.
Our modern way of life is doomed and you should prepare for a simpler life style.
IMO, if we were to begin building nuclear power generating plants now as fast as practical (A Manhattan style project), in 25 years we would be the manufacturing power-house of the world again.
Manufacturing companies would be attracted to the cheap energy because oil will be $200-$300.00 a barrel.(Maybe more)
We could presently use the construction jobs the building of the nuclear plants would bring.
Otherwise, we're headed for third-worldism just because of energy costs.
i enjoyed his book,
and this article has an attractive
sub-text for small government.
...but if I understand his thesis, if you can foresee the event, then it’s not a “black swan” event.
You might say that he is not predicting the events, he is predicting the results of the unpredictable events. Sooner or later SOMETHING bad is going to happen, and those who didn’t protect themselves from unknown danger will suffer.
Or they would in a world that didn’t socialize failure.
Not that there aren’t good black swans as well. I think the point is that eventually you are going to encounter a really bad on that will kill you.
mediocrity is a ticking time bomb.
Well, that seems to follow. Are ya gonna sit there all fat and sassy if you see that you're in the crosshairs of some bad karma?
I think the idea is that institutional thinking consoles its illusion of its own mastery over situations by sticking to "means" -- the means of a data set. However, there is no safety in that.
It’s amusing that in Fooled by Randomness he endorses Global Warming.
An entertaining, flawed writer.
“Are ya gonna sit there all fat and sassy if you see that you’re in the crosshairs of some bad karma?”
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The general trend seems to be to refuse to see it! The situation in which the nation currently finds itself is the result of the citizens steadfastly refusing to see what needs to be done and do it. It didn’t take a genius to see that we have been on the wrong road for over forty years. It didn’t take a genius to see that Barack Obama would be a disaster, it only took a willingness to take a hard look at reality and see it. It is much easier to go with the flow and pretend that yeah, it really is cool to vote for some unknown far left clown just because he claims to be black. So it really isn’t a question of what people will do, “if you see that you’re in the crosshairs of some bad karma”, it is a question of how many will be willing to see that they are in the crosshairs.
“There is none so blind as he who will not see.”
And all the princes will marry beautiful princesses, and they’ll all live happily ever after.
“Human sacrifice! Dogs and cats living together...!”
“I love this guy’s writing.”
I do too, and try to read everything I can find of it.
He is a Lebanese Christian who saw his country destroyed, got double doctorates here, mastering both mathematics and philosophy, and sees through all the fallacies of modern economic theory.
Globalization is on the verge of collapse, and highly centralized government will collapse with it.
The pre-modernist robust model of city-states and statelings will prevail, with obsessive fiscal prudence. Currencies might still exist, but, after the disastrous experience of America's Federal Reserve, they will peg to some currency without a government, such as gold.Yeah, that makes sense. Never had a currency collapse when we were on the gold standard. [laughs uproariously] Thanks DeaconBenjamin.
Did I miss something? Did the US dollar collapse while on the gold standard at some point?
You suggest that the currency collapses occurred when there was "sudden interest in gold by the big money people (when those massive 19th c land deals went bad, for example)."
The panics of 1819 and 1837 are generally acknowledged as having resulted from contraction of the money supply by the Second Bank of the United States (although I have seen an interesting argument that the interruption of the flow of Mexican silver to the United States (1819 because of the revolt from Spain, 1837 because of Santa Anna's attacks upon the silver producing provinces).
I have seen the panic of 1857 as being a local phenomenon (e.g. New York banks) after the loss of the USS Central America which was bringing large amounts of coin and bullion to NY city. The panic of 1873 is represented as due to the failure of Jay Cooke & Co., but I believe is properly attributed to the puncture of the massive speculative bubble in the newly-minted German Empire following the Franco-Prussian war. Following the panic of 1873, there was regular deflation (which is bad for debtors), and Wall Street and certain prominent banks had difficulties, but in general, the American economy was quite prosperous and productive, albeit wages fell.
City-states and a new form of feudalism is where we are headed.
I sent that last one in FReepmail because I’d wrapped up for the night by saving three or four pages of “in forum” screens, and was too lazy to do it again. Anyway, thanks!
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