Expected Unknowns¶
Nouriel Roubini has a short article up at Project Syndicate on The Changing Face of Global Risk, replacing the top six dangers of recent years with an equal number of new ones. There’s nothing remarkably implausible about it, but neither is it irresistibly convincing.
This type of forecast, were it reliable, would be of inestimable value. To some considerable degree it is simply inescapable, since there must always be default expectations (of the kind occasionally formalized as Bayesian priors). When specific probability-weighted predictions are not made, future-sensitive agents do not fall back upon poised skepticism — such Pyrrhonism is a philosophico-mystical attainment of extreme rarity. Instead, presumed outcomes are projected out of sheer inertia, whether as perpetuation of the status quo, or the mechanical extrapolation of existing trends. It takes only a moment of reflection to recognize that such tacit forecasts are at least as precarious as their more elaborate alternatives. Their only recommendation is an irrational mental economy, which would find in the least-effort of cognition some analogy with the superficially equivalent (but in this case informative) principle in nature.
Large-scale forecasting cannot be eschewed, but there are obvious reasons why it cannot be greatly trusted. It has no definite methods (relying for its credibility on hazy reputational capital). Its objects are complex, chaotic, and — once again — poorly defined. It has a restricted time frame, appropriate to gradually emerging developments constrained (to some degree) by historical precedent, but necessarily inadequate to radical innovation and to sudden, rapidly evolving events. The combination of these various blindnesses with a high-impact chance event produces the nightmare of the forecasters — (Nassim Nicholas Taleb’s) black swan.
Consider one possible event that does not make it onto Roubini’s new list: The collapse of the Saudi regime. Shifting energy economics, ‘Arab Spring’ -style insurrectionary chaos, US strategic withdrawal, Sunni-Shi’a conflict, and an impending succession crisis are among the clear stress-factors, and several more could easily be added — most prominently the ambient influence of Internet-dynamized corrosive modernism, which not only creates direct legitimation problems, but also energizes an (at least) equally disruptive traditionalist backlash. Unquestionably, some uncontrollable cross-excitation of these developments could escalate to criticality with shocking speed. The probability of such an outcome is impossible to fix.
How catastrophic would the fall of the Saudis be? The least disastrous scenarios sleaze smoothly into a variety of utopian fantasies, from democratic liberation, through Salafist atavism, to Shi’ite millenarian imperialism. Since any process of change which tended momentarily to promise the fulfillment of any such vision would almost certainly evolve quickly in an exceptionally calamitous direction, we are probably safe in assuming that the best case outcome would be remarkably bad.
The collapse of the House of Saud would simultaneously and fundamentally destabilize world energy markets and the Islamic umma. Control of the Holy Places would become a matter of immediate contestation, as would a quarter of the world’s petroleum reserves. The type of interim regime most likely to effectively secure one would be especially likely to compromise security of the other. A relatively competent military government would outrage religious sensibilities (of several different kinds), while an intense theocracy would be greeted internationally as a revolutionary threat to the reliable administration of hydrocarbon production. It is not intellectually challenging to envisage a situation in which religious, military, and economic chaos erupt in concert, on an apocalyptic scale.
In case I am misunderstood, this is not a forecast. It is an anti-forecast, directed randomly at Roubini, but more generally at the very idea of any confident enumeration of significant world risks. In the spirit of Taleb, it is intended to communicate an abstract potential for blind-siding disaster, of arbitrary magnitude.
The most reliable heuristic: plan for the unknown as such. (More on that to come.)