Black Swans: The Dangers We Could Miss
WHY YOU SHOULD CARE
Because “surprise” works well only for birthday parties and marriage proposals.
Surprise is the ultimate enemy, and avoiding it is a constant challenge.
You learn that quickly in the intelligence community.
When information is currency, one crucial piece can make or break your race against the adversary. But I learned in my time in the CIA that sniffing out revolutionary societal upheavals is a game that requires more dexterity. It requires you to chart all the tiny changes that lead almost imperceptibly to when a mass protest breaks out, to the moment when a country or economy could collapse, to when a war could start.
It’s dangerously easy to miss these tipping points.
That’s why intelligence officers have to ask themselves about “Black Swans”— a term created by scholar and statistician Nassim Taleb to refer to events that seem highly improbable but which would have a game-changing impact were they to occur.
If I stepped back into my old shoes to ask this very question, here are four such scenarios — with low-probability but devastating potential — that I might most fear.
Protests in China: When the streets get crowded
Why it seems improbable: We’re all used to hearing “China Rising.” We’ve watched decades of annual economic growth of 10 percent out of the country with the world’s second-largest economy. Military modernization has been moving apace for more than 30 years.
How it could happen and why it would matter: There’s trouble brewing under the surface. China’s growth fuels its political stability. That growth also depends on the country’s reliance on cheap exports — which might not be sustainable. Increasing prosperity has pushed up wages, raised manufacturing costs and made businesses less competitive.
It’s also pushed employment to its lowest level since 2009, and historically, low employment tends to have something in common with disruptive protests. (See: Turkey. Arab Spring, most recently.)
Meanwhile, growth has fallen into the 7 percent range, with little outlook for improvement. And then there’s the 35 percent of Chinese business activity that remains locked inside inefficient, overstaffed, state-owned companies. It’s a drag on the economy. It’s also a source of corruption, already inciting protests.
If we start to see sections of various countries break off, well, no one can know where this would lead or when it would stop.
If China continues to be a victim of its own success, if the Chinese middle class continues to become more aware and less satisfied, if these problems ramp up to serious instability, it will send shockwaves through the international system.
China would probably try to divert domestic attention, stoke nationalism through international saber rattling (a tendency we already see in the South China Sea disputes). And in the (highly unlikely) event governmental authority were to collapse, there would be a lengthy period of chaos, affecting financial markets and disturbing global balances in incalculable ways.
Borders Crumble in the Middle East (weren’t they poorly drawn in the first place?)
Why it seems improbable: Ask a political scientist and he or she will tell you that borders seldom change. Especially those in the Middle East — which have seemingly been etched in stone since they were drawn up by WWI’s victors. Plus, we might have neglected thinking about borders — especially since most of the pressures we’ve seen since the early Arab Spring have been about conditions inside existing countries.
How it could happen and why it would matter: This one, not so improbable. WWI-era borders have crumbled in our lifetime — remember Yugoslavia?
Ethnic or religious identity is gradually displacing nationality as the driver for many Middle Eastern loyalties. Take the Kurds, who form large minorities in Iraq, Turkey, Iran and Syria.
And Syria is the key. Its internal sections are increasingly controlled not by borders but by one ethnic or religious group. Each group draws support from across the Middle East, from ethnic and religious counterparts who flow across borders that increasingly exist in name only.
If we start to see sections of various countries break off (Syria and Iraq appear most fragile), well, no one can know where this would lead or when it would stop. It would be violent, chaotic, and in the worst case, it could descend into region-wide war. And terrorists, already firmly ensconced in parts of Syria and Iraq, would find new safe haven.
North Korea Collapses: They could get Twitter. And then what?!
Why it seems improbable: The answer is basically that it hasn’t collapsed yet, even though plenty have been predicting its demise for decades. It’s a regime with a tight hold over its people, little outside contact, and few external opposition groups — so it’s easy to think it’s insulated from the sort of changes rocketing through the Middle East.
How it could happen and why it would matter: Outside the Pyongyang capital, people live in grinding poverty. But social media has begun to penetrate its tight walls, and this could spread a sense of injustice, not unlike the awareness China’s middle class is gaining. Plus, the new leader, Kim Jong-un, hasn’t yet found his footing.
If the government did collapse, locating and determining the future of North Korea’s nuclear weapons would be job one for the U.S. Then the international community would have to deal with a daunting, massive flow of newly stateless people out of the nation, undertaking one of the most costly recovery operations in history, and far exceeding the task of uniting the two Germanys in the 1990s.
Iran Goes Reformist: There’s some good news in here, too
Why it seems improbable: Little seems to have come of the regular stream of protests in Iran since 2009’s election. The protesters haven’t united behind a leader; the government keeps the upper hand, the West hangs back and the instruments of repression such as the Republican Guard remain strong.
How it could happen and why it would matter: OK, this one would pretty much take a miracle. But the surprise election of president Hassan Rouhani, a reformist (in Iranian terms), did prove the citizenry’s disenchantment with his politically clownish predecessor, Ahmadinejad.
If the negotiations to limit Iran’s nuclear program succeed and removal of sanctions returns Iran to economic normalcy — with Rouhani getting the credit — his faction could gain greater traction against Iran’s harder-line groups. Which would leave a slight opening for a better Washington-Tehran relationship. And if we got there, it could add stability and greater predictability to that part of the world.
In the meantime, there are some pretty big obstacles to surmount — among them Iran’s support for the Syrian regime, and its use of terrorism. But check back a year from now: Few things are eternal in today’s Middle East.
And that’s just the beginning…
The list of ugly surprises goes on: global pandemic from new pathogens; dramatic climate change from more rapid polar melting; a terrorist-driven nuclear incident; societal collapse in an increasingly chaotic Venezuela; a forceful Russian intervention in Ukraine.
Thinking about Black Swans today — some years after I’ve had to brief our government on the subject — reminds me that the potential for surprise in today’s turbulent world is even greater than it once was. Likelihood has a whole new meaning; our vision seems cloudier than it once was, and predictions are fallible. So the best defense? To constantly question the conventional wisdom about where things are heading — readying us for the unwelcome and unexpected, and preparing to respond with our own kind of surprise: preparedness, speed and agility.