Antifragile: Things That Gain from Disorder (29 page)

The famine in China that killed 30 million people between 1959 and 1961 can enlighten us about the effect of the state “trying hard.” Xin Meng, Nancy Qian, and Pierre Yared examined its variations
between
areas, looking into how the famine was distributed. They discovered that famine was more severe in areas with higher food production in the period before the famine began, meaning that it was government policy of food distribution that was behind much of the problem, owing to the inflexibility in the procurement system. And indeed, a larger than expected share of famine over the past century has occured in economies with central planning.

But often it is the state’s incompetence that can help save us from the grip of statism and modernity—inverse iatrogenics. The insightful author Dmitri Orlov showed how calamities were avoided after the breakdown of the Soviet state because food production was inefficient and full of unintentional redundancies, which ended up working in favor of stability. Stalin played with agriculture, causing his share of famine. But he and his successors never managed to get agriculture to become “efficient,” that is, centralized and optimized as it is today in America, so every town had the staples growing around it. This was costlier, as they
did not get the benefits of specialization, but this local lack of specialization allowed people to have access to all varieties of food in spite of the severe breakdown of the institutions. In the United States, we burn twelve calories in transportation for every calorie of nutrition; in Soviet Russia, it was one to one. One can imagine what could happen to the United States (or Europe) in the event of food disruptions. Further, because of the inefficiency of housing in the Soviet state, people had been living in close quarters for three generations, and had tight bonds that ensured—as in the Lebanese war—that they stayed close to each other and lent to each other. People had real links, unlike in social networks, and fed their hungry friends, expecting that some friend (most likely another one) would help them should they get in dire circumstances.

And the top-down state is not necessarily the one that has the reputation of being so.

Next we will debunk the narrative that France works well because it is a Cartesian rationalizing-rationalist top-down state. As with the Russians, the French were lucky that it was for a long time a failed aim.

I spent the past two decades wondering why France, as a country managed in a top-down manner by an oversized state, could fare so well in so many fields. It is the country of Jean-Baptiste Colbert, after all, the grand dreamer of a state that infiltrates everything. Indeed the current culture is ultra-interventionist, sort of “if it ain’t broke, fix it.” For things work—somewhat—in France, often better than elsewhere; so can France be used as evidence that central bureaucracies that repress municipal mess are favorable for growth, happiness, good science and literature, excellent weather, diversified flora with Mediterranean varieties, tall mountains, excellent transportation, attractive women, and good cuisine? Until I discovered, reading Graham Robb’s
The Discovery of France,
a major fact that led me to see the place with completely new eyes and search the literature for a revision of the story of the country.

The story was actually staring us in the face: the nation-state in France was largely nominal, in spite of attempts by Louis XIV, Napoleon, and the national education program of Jules Ferry to own the place. France in 1863 did not speak French (only one in five persons could), but rather a variety of languages and dialects (a surprising fact: the Nobel Prize in Literature in 1904 went to the Frenchman Frédéric
Mistral, who wrote in Provençal, a language of southern France no longer spoken). The lack of linguistic integration—like the variety in cheese (of which there are about four hundred different types)—expresses the difficulties in centralizing the country. There was nothing ethnic or linguistic to bind the place—it was just the property of a king and a weak aristocracy. Roads were horrible and most of the country was inaccessible to travelers. Tax collection was a dangerous profession, requiring tenacity and sagacity. Indeed, the country was progressively “discovered” by Paris, in many cases after its colonies in North Africa and elsewhere. In a thick and captivating book,
La rebellion française,
the historian Jean Nicolas shows how the culture of rioting was extremely sophisticated—historically, it counts as the true French national sport.

Paris itself was barely controlled by France—no more than the Rio slums called
favelas
are currently ruled by the Brazilian central state. Louis XIV, the Sun King, had moved the government to Versailles to escape the Parisian crowd. Paris only became controllable after Haussmann in the 1860s removed the tenements and narrow streets to make large avenues that allowed for police to control the crowds. Effectively France was still Paris and “the desert,” as Paris didn’t care much about the rest of France. The country was only centralized after long programs and “Five Year Plans” of roads, rail systems, public schools, and the spread of television—a Napoleonic dream of integration that, begun by De Gaulle after the war, was only completed during the reign of Valéry Giscard d’Estaing in the late 1970s, at which point the decentralization started taking place.
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France might have benefited from its two decades or so under a large centralized state—but the argument could equally be that it benefited from the happy condition that the large state spurred growth and did not overstay its welcome.

Aside from France, I was baffled by the puzzle of Sweden and other Nordic states, which are often offered as paragons of the large state “that works”—the government represents a large portion of the total economy. How could we have the happiest nation in the world, Denmark (assuming happiness is both measurable and desirable), and a monstrously large state? Is it that these countries are all smaller than the New York metropolitan area? Until my coauthor, the political scientist Mark Blyth, showed me that there, too, was a false narrative: it was almost the same story as in Switzerland (but with a worse climate and no good ski resorts). The state exists as a tax collector, but the money is spent in the communes themselves, directed by the communes—for, say, skills training locally determined as deemed necessary by the community themselves, to respond to private demand for workers. The economic elites have more freedom than in most other democracies—this is far from the statism one can assume from the outside.

Further, illustrating a case of gaining from disorder, Sweden and other Nordic countries experienced a severe recession at the end of the cold war, around 1990, to which they responded admirably with a policy of fiscal toughness, thus effectively shielding them from the severe financial crisis that took place about two decades later.

When constrained systems, those hungry for natural disorder, collapse, as they are eventually bound to, since they are fragile, failure is never seen as the result of fragility. Rather, such failure is interpreted as the product of poor forecasting. As with a crumbling sand pile, it would be unintelligent to attribute the collapse of a fragile bridge to the last truck that crossed it, and even more foolish to try to predict in advance which truck might bring it down. Yet it is done all too often.

In 2011, U.S. president Barack Obama blamed an intelligence failure for the government’s not foreseeing the revolution in Egypt that took place that spring (just as former U.S. president Jimmy Carter blamed an intelligence failure for his administration’s not foreseeing the 1979 Islamic Revolution in Iran), missing the point that it is the suppressed risk in the statistical “tails” that matters—not the failure to see the last grain
of sand. One analogy to economics: after the inception of the financial crisis in 2007–2008, many people thought that predicting the subprime meltdown (which seemed in their mind to have triggered it) would have helped. It would not have, for Baal’s sake, since it was a symptom of the crisis, not its underlying cause. Likewise, Obama’s blaming “bad intelligence” for his administration’s failure to predict the uprising that took place in Egypt is symptomatic of both the misunderstanding of complex systems and the bad policies involved. And superpowers are plain turkeys in that story.

Obama’s mistake illustrates the illusion of local causal chains—that is, confusing catalysts for causes and assuming that one can know which catalyst will produce which effect. The final episode of the upheaval in Egypt was unpredictable for all observers, especially those involved. As such, blaming the CIA or some other intelligence agency is as injudicious as funding it to forecast such events. Governments are wasting billions of dollars on attempting to predict events that are produced by interdependent systems and are therefore not statistically understandable at the individual level.

Most explanations that are offered for episodes of turmoil follow the catalysts-as-causes confusion. Take the “Arab Spring” of 2011. The riots in Tunisia and Egypt were initially attributed to rising commodity prices, not to stifling and unpopular dictatorships. But Bahrain and Libya were wealthy countries that could afford to import grain and other commodities. Further, we had had considerably higher commodity prices a few years earlier without any uprising at all. Again, the focus is wrong even if the logic is comforting. It is the system and its fragility, not events, that must be studied—what physicists call “percolation theory,” in which the properties of the randomness of the terrain are studied, rather than those of a single element of the terrain.

As Mark Abdollahian of Sentia Group, one of the contractors who sell predictive analytics to the U.S. government (those that failed to warn), noted regarding Egypt, policy makers should “think of this like Las Vegas. In blackjack, if you can do four percent better than the average, you’re making real money.” But the analogy is spurious—pretty much everything I stand against. There is no “four percent better” on Egypt. This was not just money wasted but the construction of a false confidence based on an erroneous focus. It is telling that the intelligence analysts made the same mistake as the risk-management systems that
failed to predict the economic crisis—and offered the exact same excuses when they failed. Political and economic “tail events” are unpredictable, and their probabilities are not scientifically measurable. No matter how many dollars are spent on research, predicting revolutions is not the same as counting cards; humans will never be able to turn politics and economics into the tractable randomness of blackjack.

CHAPTER 8