Black swan events and the robustness of a system

Hello hello,

Below an outline about the phenomena of ‘black swans’. The ‘mystery’ of space expressed in a blink of a second, able turning all sides around. ‘The skarry night’

Some things in life will always remain highly unpredictable, and gladly so! Otherwise, life is this dole ball game everyone seems to be able to win at if they are highly rational agents, making decisions based upon deterministic laws. This is a very typical modern and a classical way of looking at evolutionary game theory and zero-sum games by which it is ideal to be an absolute power without having neighboring powers in line.

What is interesting and relative now is that China is perhaps facing such a phenomena in which it would be interesting to become the new world super power. Thereby saying that America would probably not eagerly accept to be number two in the world hemisphere. The silly thing is that this ability to destroy each other through nuclear, cyber or other cold war tactics, as examples, are possibly a few of the reasons why humanity at large is experiencing a sort of ‘padstand’ or (Nash) equilibrium if I refer to the literature correctly. This is the tragedy of the modern world in which the mindset causes its own downfall along this trajectory for most parties involved within such a playing field in socioeconomic life. However, there is always human intuition at play. Hereby saying, that classical game theory is obviously limited to the visions of economical man. Human Novus can disrupt this setting of despair for all parties involved to come up with something better so (doughnut economy as one of the possible pathways perhaps) to make the ‘lesser’ obsolete by the power of agency itself. It makes sense China wants to expand since it is in their DNA to worry about outsiders. So it is like treating fire with fire, by making China more anxious by surrounding them with that which is so alien to them.

So the beauty of this story, is that life always has its irrational tricks upon its sleeves to keep us sharp and agile, or not! You either stick your heels deeper in the sand, or you somehow manage to adept to unexpected circumstances and turn things around towards your benefit and that of others and minimize the negative effects on the greater scale of the collective. This to me is the art of life and also within political life. The game that is being played is with great wit and caution due to the stakeholders able and perhaps even willing to destroy one another in a flick of a button. This is like playing bullet roulette on the highest levels of political power and affluence.

Fundamentally, I think you can fairly say that in contemporary society many individuals, organizations and the systems they inhabit are too inert, deterministic and immobile to properly adapt to events such as those called by the name of black swans. Contemporary systems are too closed based upon methods like the law of large numbers, linear thinking, the bell curve, the deterministic scientific method et cetera and often do not represent an accurate model of the complexity of reality itself. Such methods of thinking about reality might give a good prediction about a highly closed situation by which you study elements in isolation, but it does not do well on predicting the outcomes of open and complex systems by which the relationships of elements create all sorts of possible random outcomes. Following this rational, it is also fair to say that we probably know a lot about nothing at all, because it doesn’t really matter anything if you study elements in isolation when in practicality, these elements have highly complex interactions with each other, and in doing so, create all sort of possible outcomes.

That being said, the world and our societies are evolving into a more advanced and complex state anyway despite politics, and in order to keep up with these changes we need to be able to accurately model these day to day complexities. If not, then a system isn’t robust enough to at least endure, or better yet participate in this decade of rapid change with all the coming challenges of inequality, resource depletion, political instability etc.

Black swan events are highly unpredictable, have a major impact on a society or a system and only seems to be obvious in hindsight (when it is too late). This is why systems (you can replace ‘system’ with ‘a person’ or an ‘organization’) that are predominantly closed, inert and inflexible, are unable to adapt to such an event compared to a system that is more open and adaptive in nature. That being said, in a world of, you can say, exponential development and change, the rebound ability of a system has a large impact on how robust such a system is in my view. Black swan events like disruptive technologies as the Internet itself (even though that could have been anticipated and, therefore, is not a black swan anymore) and creations like Google and possibly cryptoeconomics can fundamentally change our societies and the way we (can) relate to each other. So it is not a question if such events will happen, but an almost certainty that it will in a world that is now hyperconnected, and more able then ever before to rapidly evolve with using the occurrences of black swans positively. In using the unknown towards ones or others benefit is a sign of being alive in that you got to stay sharp and partake in the present moment for opportunities to arise. In there implicitly lays the lure of becoming too opportunistic, which could be seen as one of the underlying reasons why (history repeats) and why their is a great deal of emphasize of maximizing returns and ‘winning’ the game through making purely rational self-interested decisions all the time. Due to this simplification of reality itself one creates its own cage of existence and lacks a sense of purpose within the complexity of life.

So the nature of a black swan is that it must be completely unpredictable and, therefore, unimaginable. You might say it doesn’t matter what you will do in order to cope with it effectively as a person or an organization, since this can only be known in hindsight. I would argue, however, that there is something one can do in order to learn how to better deal with such a big and random event. For example simply realizing that such events exist already helps in raising awareness of the complexity of life, and, therefore, experiencing more empowerment to observe such developments when they occur. An intelligent system has a better and deeper understanding of the complexity of life, and is, therefore, more adaptive and capable to deal with events like that of a black swan. No system is without vulnerabilities, but we can become aware that they exist and adapt accordingly to it when necessary. Sticking ones head in the ground or heels further into a broken system isn’t a best response for black swan events from my point of view. Ignorance and stubbornness will never prevail in the evolutionary game of life.

In many ways, we should be thankful of black swan events. Events like this can either be seen as an enormous threat to our known world, or as an invitation into unknown worlds to explore greater depths of understanding and wisdom.

The mysterious beauty of the black swan.

Hope it was an interesting read, more then happy to exchange thoughts about these phenomena to learn together.

Cheers,

Kees Berg

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