_DSC0391_edit_2.jpgHuman Well Being Risk & Security 

A Little Volatility Goes A Long Way

By Keshar Patel

On Thursday November 13, World Policy Institute, in partnership with the New England Complex Systems Institute (NECSI), hosted an exclusive political salon. Nassim Nicholas Taleb, author of The Black Swan: The Impact of the Highly Improbable and Yaneer Bar-Yam, author of Making Things Work and Dynamics of Complex Systems, headlined, leading a discussion on the fragility of the global ecosystem. They spoke about risk analysis and applied its theories to current global issues, such as Ebola, the rise of the Islamic State, and the ongoing civil war in Syria.

Taleb began his presentation using a teacup as an example of fragility, and asked the audience, “What is the opposite of fragile?” Robust, he explained. Most people want to build robust systems, capable of withstanding external and internal pressures. However, he then argued that logic was flawed; it left out room for volatility. Taleb suggested some form of volatility within a society must remain in order for the system to continuously function. He then argued the need to decentralize governments in order to allow local municipalities the ability to control their respective communities. This, he states “is moving away from robustness and moving into fragility.”

Taleb speaking on his risk theories.

Bar-Yam then added the role global connectivity would play in our ability to withstand challenges to our world order. As a result of our interdependent world, he stated that a country in one region is susceptible to indirect ramifications of crises in an entirely different region of the world. Bar-Yam used the example of Ebola and long-range transportation. By adding long-range transportation to the equation, we enabled the crisis to expand and become more aggressive—if not literally, then certainly in a mediated context. In the United States, we’ve seen this play out recently when long-range transportation, in this case air travel, served as a vehicle for Ebola’s entrance onto American soil.

And in an African context, Bar-Yam emphasized the need to cut off transportation from affected areas as a means to prevent widespread escalation. Adding an air of urgency, he stated, “If we can’t respond to these crises, we might not be around much longer.”

However, Bar-Yam is skeptical of this type of protocol being followed. He doubts policymakers are ready to take the necessary steps to address these imminent threats. “Policymakers are complacent. [They] say ‘Well those extreme events aren’t going to happen here.’” And while Ebola may not pose the same threat to the U.S. that it does to Liberia, Bar-Yam says policymakers must understand that if “not this time, then wait till next time.”

Bar-Yam presents a case for New York being at risk.

The inaction of policymakers is evident in the global food crisis, which Bar-Yam equates to the emergence of the Arab Spring. He states that riots in Tahrir Square occurred not only because of a thirty year long dictatorship, but also because of frustration over an increase in food prices. He presented a graph that compared exports and imports of global food prices between the mid-2000s and onwards. Around the same time the Arab Spring started, the chart indicated a significant increase in food prices. Bar-Yam explained how the process of diverting corn to biofuel was a major reason for such an increase in food prices. This increasing demand for ethanol conversion catalyzed basic food prices to increase exponentially. And as a result, social unrest in vulnerable countries, such as Egypt, ensued.

Bar-Yam concluded with a more forward-looking perspective. He said, “Don’t think possible diseases can’t happen. [We are] not looking into future possibilities, only current problems [like Ebola].” His solution to poor Ebola medical responses included shifting from mass screenings to door-to-door screening. An example of this concept can be seen in Sierra Leone where volunteers went door-to-door to educate and screen people for Ebola. This method proved effective, says Bar-Yam. Low predictable, yet high impact events are not typically on policymakers’ agendas. And it is essential to reverse this type of mentality to ensure stability during unexpected events.

Taleb and Bar-Yam ended the salon by answering questions from the audience on political risk theories and methods of analyses. The speakers emphasized the significance of our continuously evolving ecosystem. If we can’t be prepared for the unknown, the state’s future remains uncertain. While Taleb argued the need to not look at volatility as a purely negative concept—low volatility is actually necessary for the survival of the state—Bar-Yam asked policymakers to strongly consider taking preventative steps to ensure the state can handle crises and unpredictability.



Keshar Patel is an editorial assistant at World Policy Journal.

[Photo courtesy of Alyssa Stein]

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