Black Swans are loose upon the world:
The 2008 global debt crisis, Eyjafjallajökull (pronunciation fun here), Haiti and New Zealand Earthquake, China drought, Queensland floods the political crises in Middle East and North Africa (MENA) and the Japanese earthquake/tsunami/nuclear disasters seem to prove that it is not the mundane everyday that shapes the world but rather high impact and extremely rare events.
The moment has rather given credence to Nicholas Taleb’s assertion in his book The Black Swan: The Impact of the Highly Improbable that outlier probabilities are what shape our world and not the day-to-day numbers.
The point about black swan events is that they are highly unpredictable. Sitting there in January we did have a sense that we were in the midst of shocks and the consequences of shocks: we were finally recovering from the mortgage linked debt crises and appeared be entering a new and threatening terrain associated with sovereign debt worries in Europe – and beyond.
That wasn’t all good, but it was part of the “known known” and we had a general sense of where to look for the things we didn’t know (the known unknowns – for a useful breakdown of Donald Rumsfeld’s discussion about certainty and unpredictability and Slavoj Žižek’s caustic reply see here.)
Two months later the world is a markedly different place and I have found it useful to use the Japanese earthquake and linked disasters as well as the political instability in MENA (Middle East North Africa) to ask the big and scary questions about South Africa.
Usefully, Moeletsi Mbeki has written an article predicting South Africa’s Tunisia Day for some time in about 2020.
Catch the Business Day article here and see my review of his book Architects of Poverty on which that Business Day article is extensively based here. (Afterthought note: the Business Day article is “extensively based” on Architects of Poverty not on my review.)
The long and the short of Mbeki’s argument is that the primary resource intensive phase of Chinese growth will be concluded by 2020 (and therefore the commodity supercycle will come to an end) and the ANC government will run out of money to keep paying the social grants bribe to the poorest South Africans – which in turn will lead to revolt and rebellion.
He takes it a lot further – instead of growing our competitive advantage while the commodity bonanza is with us, the ANC has instituted another system of bribes to its own leaders and supporters (Black Economic Empowerment) which consists of getting wodges of the non-essential parts of existing business and turning those into consumption fuel. Thus fat cat politicians and their families act as representatives of the cheap-labour and primary-resource-addicted conglomerates in exchange for the mess of pottage and extreme ostentatious consumption.
And waiting in their future, according to Mbeki’s argument, is a Tunisia style revolt.
So that’s the layout of the argument.
I think it is timely and provocative and interesting, but I do not think it is meant – or should be taken seriously – as a real prediction. It is polemic that warns about the excesses the new elite is indulging in.
I am in the middle of a road show where I ask the big questions about South Africa’s future stability.
I finish this evening and will then be in a position to summarise my own view; looking at the factors that lead towards instability and revolt and the factors that act to keep them at bay, asking how these balance in South Africa today.
The one thing the last few weeks have taught us is that the world is complex and interlinked in ways that make it
extremely difficult to predict outcomes. With this proviso, I do not think we realistically can suggest that there are processes operative in our society that lead, in a linear fashion, to a Tunisia Day in the next ten years of our history … but it is a close call and I will examine some of that tonight and tomorrow morning.
Nic Borain 
I am always mildly amused when “informed” economic and political predictions are made, beyond the near future. One just has to put oneself back 100 years. There must have been many predictions floating about, as there are now. How our new century will pan out; how our new decade will unfold; how economic power will shift, and so on.
Just three years later, much to every single pundit’s expectations, the world was plunged into a catastrophic World War which removed some of the best and brightest that the class of 1911 had produced. A short 18 years later the biggest blow yet struck the world’s economy, amidst the height of economic optimism. Just as the gloom was receding, a mere 27 years later, another global conflict of unimaginable destruction must have destroyed any last vestiges of predictive certainty in 1911.
I think the best prediction is: shit WILL happen, we WON’T see it coming, it WILL change the world in a way you CAN’T foresee – whether you like it or not.
I had a long reply that I lost while flitting from one thing to the next … in a nutshell: you are correct – strategic planning and risk forecasting that relies on specific predictions are often as dangerous as the situations they warn against. As someone who makes a living “making sense” of the political realm I obviously believe I am adding some value … but my first rule is that the greatest danger lies in the consensus view, the outcomes that seem the most obvious extension of the existing conditions. But an extreme version of the view you are articulating would argue you might as well not read up on the fauna, flora, watering holes and local cannibals in the wilderness that lies in your path, because your plans are going to mean diddly squat when you twist your ankle a week into the journey. We must attempt to understand what risks lie ahead and make plans and preparations to avoid or otherwise ameliorate them … BUT, the biggest mistake we can make is to believe that by taking all possible precautions we are adequately prepared …. so I agree with you about our best predictions (“shit WILL happen, we WON’T see it coming”) but I disagree if that means you are arguing that we have just as much chance of survival if we close our eyes and run screaming into the forest than if we gathered all data we can and make whatever preparations we are able … and always hold foremost in our mind that our preparations will never be enough …
I’m not suggesting our impotence or that forecasting and planning is futile. Of course we do and should. We have to do our best.
My mild amusement (which to be honest has only manifested itself since reaching a certain vintage) is at the sort of detail that Mbeki employs in his forecast, particularly China and resources. There are so many unforeseen minor events that could change that prediction – let alone Black Swan events – that would render his thesis nothing but a futile thought experiment.
So my real point I suppose, is that we really should learn from history and treat our certainty of the future with a great deal more humility.
Hi Tim … I have to agree with you (only slightly shamefacedly) and it is obvious Mbeki structured his story so that it would get picked up in the way that it was … what news organisation is going to be able to resist the ex-pres’ boetie giving the date and time of the revolution? I, of course, am doing something quite similar, just not as barefaced, here. We use the hooks of the news flow to make points and to hitch a ride on the big stories. I do believe that it is useful to look at the gaggle of black swans loosed upon the world and use the moment to expose whatever my assumptions are about how things might unfold. My biggest assumption is that the ANC is safe (in electoral terms) for many years to come … I think the exercise I have just conducted (you might have seen my next post) challenges some of my assumptions, albeit only slightly. Of course part of what I am doing is using whatever edge I can lay my hands on to generate traffic. Ultimately, part (not all!) of what I am doing with the blog is positioning myself as someone who is worth paying for his opinion … we all have to eat. The different objectives I am trying to meet here sometimes conflict, but I try to keep that to a minimum. Thanks for your comments and keep them coming