Deep Thoughts

History and Unexpected Shock

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One of the fallacies of studying history and interpreting historical events is that:

1) you look at the course of events that occurred and assume that they mostly would follow a similar narrative with different variables
2) you ignore what might have happened that is significantly out-of-the-box or the “black swans” that could have resulted in  radically different outcomes.

I discussed this here with equity markets by country; while we talk about the “long term” and staying with stocks since they generally rise, we ignore that for most countries there have been “liquidation events” that wiped out all the players who remained in the markets (of their stockholdings, at least).

For instance, in the course of WW2, there has been much discussion of whether or not the Germans would have won had they attempted a sea-landing of England.  The much more important train of thought, however, is what might have happened had Churchill not been the Prime Minister of England during those critical hours.  Many, many lesser men would have capitulated in that time of crisis.

On the Russian front, in 1941, Russia likely came within a hair’s breadth of moral and system-wide collapse after their frontier armies were annihilated and the Germans began driving across the steppe.  The fact that they were able to sacrifice armies for time and keep some semblance of discipline is taken as a given, but likely if the world ran that as a true Monte Carlo simulation over and over again that outcome is rare.

A third WW2 example is “what would have happened had the US Navy lost at Midway” which was what the odds said would have occurred.  It is true that in the end US material advantages would vastly outstrip Japan, but another issue is “if we didn’t have victories, would the US political system have produced an isolationist president who would have sued for peace?”  FDR was an ill man and could have conceivably died anytime from 1940 onward.  Even today, looking back, I am amazed that so many US servicemen were preparing to invade Japan at the end of the war, a task that would have led to virtually certain death or injury (for the lucky ones) for tens of thousands without some sort of riots or desertion given the immense casualties and deaths the US faced at Okinawa and Iwo Jima.  Today we lack the social cohesion to attempt anything so disruptive and likely to result in mass casualties.

It is important to remember that historians and prognosticators are notoriously bad at predicting events – even on topics that they are intimately close to.  For example, few saw the collapse of the USSR in 1989 and the entire “Arab Spring” that began with a vendor self-immolating in Tunisia swept the world with surprise.  It isn’t that in hindsight many showed the “rot” of these decaying systems, but that they couldn’t predict the “triggers” that would set off the maelstrom.

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Risk: An Allegory

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Here’s an interesting article on CNBC’s website: Katrina anniversary: Will New Orleans levees hold next time?

The 100-year threshold is also a statistical guess based on data on past storms and assessments of whether they’ll occur in the future. That means the models change every time a new hurricane strikes. The numbers being used as guidelines for construction are changing as time passes.
 
The standard also does not mean—can’t possibly mean—that a 100-year storm will occur only once per century. It means that such a storm has a 1 percent chance of happening in any given year. So for example, it’s technically possible for several 100-year floods to occur in just a few years, although it’s highly unlikely.

One way to look at it is that the engineers need to estimate how high a wall New Orleans needs to protect itself against a reasonably unlikely flood — say, a 1-in-1000-year event. This is the line of discussion pursued in the CNBC article.

Another way to look at it is to observe that the odds of another Katrina, or worse, within a specified period are highly uncertain. In this case a radical course of action might be called for. You do something like: take the best estimate for the wall height needed to protect against a 1000-year flood and then double it. Building such a levee would probably be extremely expensive but at least the costs would be out in the open. Or you might decide that it’s not the best idea to have a coastal city that’s below sea level, and so you would discourage people from moving back to New Orleans, rather than encourage them by subsidizing a new and stronger system of walls.

In this kind of situation the political incentives are usually going to encourage public decisionmakers to ignore radical solutions with high obvious costs, in favor of the minimum acceptable incremental solution with hidden costs: probably subsidies to rebuild the levees to, or perhaps a bit beyond, the standard needed to protect the city in the event of another Katrina. And it’s unlikely that any local pol is going to advise residents to move out and depopulate his constituency. Thus, eventually, a worst case will probably happen again.

How Systems Get Tired

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This great post by Richard Fernandez    reminded me of a quote from George Eliot:

The sense of security more frequently springs from habit than from conviction, and for this reason it often subsists after such a change in the conditions as might have been expected to suggest alarm. The lapse of time during which a given event has not happened is, in this logic of habit, constantly alleged as a reason why the event should never happen, even when the lapse of time is precisely the added condition which makes the event imminent.

(from Silas Marner)

Quote of the Day

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Richard Fernandez:

If you had to name ten things “which changed everything” in the last 2 decades nearly all the good stuff will have crept out of woodwork from the inner pages while all the bad stuff was parading above the fold. You can even think of the inner pages as being in an endless war with the front page, in an unending battle between the ordinary working stiff and the self-important leaders. The working stiff makes and the self-important leader taxes and wastes. Booms happen when the regular Joe can temporarily outpace the great men and the years of the locust occur when the opposite is true.

This is a nice post that touches a number of important themes about progress and how people perceive it. Worth reading.

Ads sell everything from Apple to Zippo. Why aren’t they used to sell ideas?

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After two losses to the farthest left president ever, conservatives have been agonizing over how win back the presidency. More importantly, the truly thoughtful among us have been agonizing over how to win back a once freedom-loving culture drifting ever farther leftward.

On the political front, the debate is over moderates (who might win the middle) and conservatives (who might excite the base). That seems to be the debate that sucks up all the oxygen. I would make the case that if you are focusing on the political front, you are fighting a battle, but have already lost the war.

I take the position that politics, while important, is merely the manifestation of what is happening to the culture. If you lose the culture, you are going to lose the elections. It’s that simple.

I think it was post 2012, where Glenn Reynolds, of Instapundit, opined that conservatives should start buying up media, so that they could compete, at least partly, with the progressives’ dominance in  the MSM. I think that is a good idea, and would argue that it is far better investment than giving money to another think tank. It isn’t easy, though. First you have to buy the medium, then you have to market it so it is followed. Last, and most important, that medium has to do much more than Fox News and talk radio, both of which do little more than pound the rubble for the already converted – making conservatives  angrier and less palatable in the process.

It’s a great idea, but difficult. What if there is an easier way?

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