Mr. Trump and the Global Circus

Just what is the crazy-like-a-fox President-elect of the U.S. up to? His antics would make P.T. Barnum blush with admiration. Mr. Trump has created a spectacle of showmanship on a scale unequaled at any place and at any time in the past. His millions of voters are more Pavlovian than a 50-dog act. And his detractors are as puzzled as they are livid. Let’s step back and take a look at the history leading up to this circus. Perhaps this can provide us with some hint on what to do next, before the lions are released into the cage with us.

The Decline and Fall of Globalization

To understand what happened in the recent US Presidential election, we have to go back to the early 1980s. At that time the overall global social mood shot upward, probably as a consequence of growing international financial integration that tended to undermine the age-old paradigm of “international diversification”. As the social mood became ever more positive, feelings that “everyone is a potential friend” grew stronger and drove events toward increasing interdependence, trade, and cooperation. It’s no accident that the European Union was formed during this period, along with the World Economic Forum in Davos. This story is graphically shown in the diagram below, where we see globalization totally flat until the mid ‘80s, where it exploded until around 2008.

Some Modest Proposals

I am a social-media whore. I am awake after midnight fascinated by what people might say next. Now that Mr. Trump won the Presidential election, the future no longer seems to be constrained by civilized precedent. Any proposal is now taken to be credible; even the dismantling of the extremely popular Medicare is on the table.

Landscape and Extreme Events

To understand extreme events (X-events) and how they occur, we first have to understand the way events, in general, take place. A good picture for this process is to imagine that you are walking in the mountains, where the landscape consists of hills, valleys, mountain peaks, plateaus, and flat, lowland terrain. At any moment, you occupy a position in this landscape. The event of immediate concern is where you will be at the next moment. Unless you happen to be standing on the edge of a cliff or on the top of a sharp mountain peak, your next step will not change your position much. But if you are near the edge of a cliff or on a mountain peak, even the smallest step in the wrong direction will change your life dramatically and very likely not for the better. In fact, such a small step for a man (or woman) may well be the last step. So there are two kinds of locations, or points, here in this mountainous terrain: an ordinary point, from which a small step doesn’t change your situation much at all, and a critical point, where even a minor step in the wrong direction can lead to a major discontinuity in your life.

Planning for the Unimaginable

One of the threads running through this book is the notion that there can be no human progress without X-events. Of course, here we are speaking of the kind of “progress” that’s revolutionary in character, not evolutionary. This is progress in which visible, meaningful change happens rapidly enough that we can often see the change taking place before our very eyes. The argument we’ve given for the claim that X-events are a necessary condition for this type of progress is that revolutionary change requires that existing social, economic, and/or political structures that have outlived their usefulness be swept away. But if there is anything the power structures in modern society—mostly politicians, banks, and megacorporations— want, it is to maintain the status quo. So the only thing that can overcome that sort of power-induced stasis is an “act of god,” i.e., an X-event, some- thing that the existing power structure is powerless to prevent.

Over the Edge of the Technology Cliff

In the latter half of the twentieth century, two of the highest-flying tech firms were Wang Laboratories, manufacturer of word processors, and Research in Motion (RIM), a Canadian company that produced the famed Blackberry, which took the world of cell phones and electronic email by storm. It’s instructive to look at the timeline of these two companies, both in terms of technology and revenues, to see how things can go very badly very quickly for a company operating in a fast-changing environment.

Lessons From the Biggest Air Disaster

On March 27, 1977 the greatest airline disaster in history took place at Los Rodeos Airport on the island of Tenerife in the Canary Islands. Two 747 aircrafts, KLM Flight 4805 and Pan Am Flight 1736, collided in fog. The crash killed 583 people, with just 61 survivors. The accident has been analyzed in depth and the conclusion is that it was caused by a cascade of errors in both communication and human nature.

Crisis of the Middle Class

One of the most talked-about films of 2014 was Richard Linklater’s epic Boyhood, which gives a blow-by-blow account of the maturing of a young man in twenty-first-century America. While the film covers over 4,000 days of the growing-up of the film’s star, Mason Evans, Jr., the actual filming took just 39 days of shooting. Linklater describes his film as an “epic of the intimate,” which is very descriptive as we see the hero deal with various life trials that a young man confronts in early twenty-first-century America.

Social Mood and Complexity Overload

On the night of November 12, 1993 at McNichols Sports Arena in Denver, Royce Gracie was the last man standing in an eight-man martial arts tour- nament, which is now known as “The Beginning.” These fights were more like a street brawl with no rules, other than no biting and no eye-gouging. This tournament was televised on pay-TV, and served to introduce the new phenomenon of “ultimate fighting,” which turns out to have a huge world- wide following, as evidenced that by 2011 the Ultimate Fighting Cham- pionship (UFC) was estimated to be worth around $2 billion by Forbes magazine. Commentators have noted that the fascination with this form of combat dates back to ancient Greek and Roman gladiators who fought in the Roman Colosseum and elsewhere for the entertainment of spectators. It would appear that over the last several millennia people have not lost the urge to see violent combat between two humans engaged in a battle to the death. These ultimate fights serve as extreme examples of both complexity mismatches and social mood bias at the level of individual interaction. Let’s see why.

Drivers of social change

At a random moment in time, the generic behavior of any social system is to be in a trending pattern. In other words, if you ask how will “things” (e.g., the GDP of an economy, the financial market averages, the political climate) look tomorrow, the answer is that they will be just a bit better or a bit worse than today, depend- ing on whether the trend at the moment is moving up or down. This is a large part of what makes trend-following so appealing: it’s easy and it’s almost always right—except when it isn’t! Those moments when it isn’t are rare (infinitesimally small in the set of all time points, actually) and the event is usually surprising within the context of the situation in which the question about the future arises. These special moments when the current trend is rolling over from one trend to another are the critical points of the process. And if that rolling over involves great social damage in terms of lives lost, dollars spent, and/or existential angst, we call the transition from the current trend to the new one an X-event. In the natural sciences, especially physics, such a transition is often associated with a “flip” from one qualitatively different type of structure or form of behavior to another, as with the phase transition from water to ice or to steam.

It came from outer space

TIME: 65 million years ago.
PLACE: What is now the Yucatan Peninsula in eastern Mexico.
EVENT: The crash of an asteroid 20 kilometers across.
EFFECT: The end of the dinosaurs and most other life forms on Earth at the time.

Suppose you were a lumbering triceratops. What would your walnut-sized brain have registered when this fiery crash occurred? Answer: Basically, almost nothing beyond an unbelievably intense light in the sky before you were instantaneously reduced to a heap of ashes, or even obliterated entirely if you happened to be in the impact zone. Here’s the scenario.