(2009-04-15) Robb Black Swan System

John Robb agrees with much of Nassim Taleb's Black Swan thinking. A systems approach, often discussed on this blog and by Taleb, argues that a combination of hyper-efficiency (JIT supply, financial flows, and tight coupling of all sorts - Tightly Coupled), extreme Leverage (high debt), and excessive Complexity (derivatives, interlocked supply chains) have introduced dynamic instability into the global economic system... Another way to is to analyze the stability of our global system is to look at it as a Network. "Cascades of Failure and Extinction in Evolving ComplexSystems" 2006, by Paul Ormerod and Rich Colbaugh is a good attempt at doing this... Unsurprisingly, they found as they scaled the connectivity of the network it became more fit... owever, this general improvement in fitness and resistance to minor shocks came at a cost. The more highly connected the network became, the more prone it was to catastrophic failures/extinction events... Both Taleb and I conclude that the best way to deal with this risk is to simplify our global economic system. Taleb recommends that we turn back the clock to a simpler time. In contrast, I recommend that we organically evolve into a more efficient decentralized system that concentrates on community Resilience.