Tag: <span>Decisions w/ Uncertainty</span>

The Ideas of Nassim Nicholas Taleb

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At the moment I find myself in the middle of two books by Steven Pinker. The first, Better Angels of Our Nature, has been mentioned a couple of times in this space and I thought it a good idea to read it, if I was going to continue referencing it. I’m nearly done and I expect that next week I’ll post a summary/review/critique. The second Pinker book I’m reading is his book on writing called The Sense of Style: The Thinking Person’s Guide to Writing in the 21st Century. When the time comes you’ll see that my review of Better Angels of Our Nature is full of criticisms, but a criticism of Pinker’s writing will not be among them. Sense of Style is his book of writing advice, and I am thoroughly enjoying it. It continues a wealth of quality advice on non-fiction writing.

One piece of advice in particular jumped out at me. Pinker cautions writers to avoid the curse of knowledge. This particular example of bad writing happens because authors are generally so immersed in the topics they write about that they assume everyone must be familiar with the same ideas, terms and abbreviations they are. You see this often in academia and among professionals like doctors and attorneys. They spend so much of their time talking about a common set of ideas and situations that they develop a professional jargon, within which  acronyms and specialized terms proliferate leading to what could almost be classified as a different language, or at a minimum a very difficult to understand dialect. This may be okay, if not ideal, when academics are talking to other academics and doctors are talking to other doctors, but it becomes problematic when you make any attempt to share those ideas with a broader audience.

Pinker illustrates the problems with jargon using the following example:

The slow and integrative nature of conscious perception is confirmed behaviorally by observations such as the “rabbit illusion” and its variants, where the way in which a stimulus is ultimately perceived is influenced by poststimulus events arising several hundreds of milliseconds after the original stimulus.

Pinker points out that the entire paragraph is hard to understand and full of jargon, but that the key problem is that the author assumes that everyone automatically knows what the “rabbit illusion” is, and perhaps within the author’s narrow field of expertise, it is common knowledge, but that’s almost certainly a very tiny community, a community to which most of his readers do not belong. Pinker himself did not belong to this community despite the fact that the quote was taken from a paper written by two neuroscientists and Pinker, himself, specializes in cognitive neuroscience as a professor at Harvard.

As an aside for those who are curious, the rabbit illusion refers to the effect produced when you have someone close their eyes and then you tap their wrist a few times, followed by their elbow and their shoulder. They will feel a series of taps running up the length of their arm, similar to a rabbit hopping. And the point of the paragraph quoted, is to point out that the body interprets a tap on the wrist differently if it’s followed by taps farther up the arm, then if it’s not.

This extended preface is all an effort to say that in the past posts I may have have fallen prey to the curse of knowledge. I may have let my own knowledge (meager and misguided though it may be) blind me to things that are not widely known to the public at large and which I tossed out without sufficient explanation. I feel like I have been particularly guilty of this when it comes to the ideas of Nassim Nicholas Taleb, thus this post will be an attempt to rectify that oversight. It is hoped that this, along with a general resolve to do better about avoiding the curse of knowledge in the future will expulcate me from future guilt. (Though apparently not of the desire to use words like “expulcate”.)

In undertaking a survey of Taleb’s thinking in the space of a few thousand words, I may have bitten off more than I can chew, but I’m optimistic that I can at least give you the 10,000 foot view of his ideas.

Conceptually Taleb’s thinking all begins with the idea of understanding randomness. His first book was titled Fooled by Randomness, because frequently what we assume is a trend, or a cause and effect relationship is actually just random noise. Perhaps the best example of this is the Narrative Fallacy, which Taleb explains as follows:

The narrative fallacy addresses our limited ability to look at sequences of facts without weaving an explanation into them, or, equivalently, forcing a logical link, an arrow of relationship upon them. Explanations bind facts together. They make them all the more easily remembered; they help them make more sense. Where this propensity can go wrong is when it increases our impression of understanding.

Upon initially hearing that explanation you may be thinking of the previous paragraph about the “rabbit illusion”. I think Taleb’s writing is easier to understand, but the paragraph is a little dense, so I’ll try and unpack it. But first, what’s interesting, is that there is connection between the “rabbit illusion” and the narrative fallacy. As I mentioned the “rabbit illusion” comes because the body connects taps on the wrist, elbow and shoulder into a narrative of movement, in this case a rabbit hopping up the arm. In the same way the narrative fallacy comes into play when we try to collect isolated events into a single story that explains everything, even if those isolated events are completely random. This is what Taleb is saying. It’s almost impossible for us to not try and pull events and facts together into a single story that explains everything. But in doing so we may think we understand something when really we don’t.

To illustrate the point I’ll borrow an example from Better Angels, since I just read it. The famous biologist Stephen Jay Gould was touring the Waitomo glowworm caves in New Zealand, and when he looked up he realized that the glowworms made the ceiling look like the night sky, except there were no constellations. Gould realized that this was because the patterns required for constellations only happened in a random distribution (which is how the stars are distributed) but that the glowworms actually weren’t randomly distributed. For reasons of biology (glowworms eat other glowworms) each worm kept a minimum distance. This leads to a distribution that looks random but actually isn’t. And yet, counterintuitively we’re able to find patterns in the randomness of the stars, but not in the less random spacing of the glowworms.

It’s important to understand this way in which our mind builds stories out of unconnected events because it leads us to assume underlying causes and trends when there aren’t any. The explanations going around about election are great examples of this. If 140,000 people had voted differently (125k in Florida and 15k in Michigan) then the current narrative would be completely different. This is, after all, the same country who elected Obama twice, and by much bigger margins. Did the country really change that much or did the narrative change in an attempt match the events of the election? Events which probably had a fair degree of randomness. Every person needs to answer that question for themselves, but I, for one, am confident that the country hasn’t actually moved that much, but how we explain the country and it’s citizens has moved by a lot.

This is why understanding the narrative fallacy is so important. Without that understanding it’s easy to get caught up in the story we’ve constructed and believe that you understand something about the world, or even worse that based on that understanding that you can predict the future. As a final example, I offer up the 2003 Invasion of Iraq, which resulted in the deaths of at least 100,000 people (and probably a lot more). And all because of the narrative: Islamic bad-guys caused 9/11, Sadaam is only vaguely Islamic, but definitely a bad guy. Get him! (This is by no means the worst example of deaths caused by the narrative fallacy, see my discussion of the Great Leap Forward.)

Does all of this mean that the world is simply random and any attempts to understand it are futile? No, but it does mean that it’s more important to understand what can happen than to attempt to predict what will happen. And this takes us to the next concept I want to discuss, the difference between the worlds of Mediocristan and Extremistan.

Let’s start with Mediocristan. Mediocristan is the world of natural processes. It includes things like height and weight, intelligence, how much someone can lift, how fast they can run etc. If you’ve ever seen the graph of a bell curve this is a good description of what to expect in Mediocristan. You should expect most things to cluster around the middle, or the top of the bell curve, and expect very few things to be on the tail ends of the bell curve. In particular you don’t expect to see anything way off to the right or left of the curve. To put it in numbers for anything in Mediocristan 68% will be one standard deviation from the average, 95% will be within two standard deviations and 99.6% will be within three standard deviations. For a concrete example of this let’s look at the height of US Males.

68% of males will be between 5’6” and 6” tall (I’m rounding a little). 95% of males will be between 5’3” and 6’3” and only one in a 1.7 million males will be over 7’ or under 4’7”. Some of you may be nodding your heads and some of you may be bored, but it’s important that you understand how the world of Mediocristan works. The key points are the average, and the median are very similar. That is that if you took a classroom full of students and lined them up by height the person standing in the middle of the line would be very close to the average height. The second key point is that there are no extremes, there are no men who are 10 feet tall or 16 inches tall. This is medicrostan. And when I said it’s more important to understand what can happen, than attempting to predict what will happen, in Mediocristan lots of extreme events can not happen. You’ll never see a 50 foot tall woman, and the vast majority of men you meet will be between 5’3” and 6’3”.

If the whole world was Mediocristan, then things would be fairly straightforward, but there is another world in which we live. It takes up the same space and involves the same people as the first world, but the rules are vastly different. This is Extremistan. And Extremistan is primarily the world of man-made systems. A good example is wealth. The average person is 5’4”, the tallest person ever was 8’11” tall. But the average person in the world has a net worth of $26,202 while the richest person in the world (Currently Bill Gates) has a net worth of $75 billion which is 2.8 million times the worth of the average person. Imagine that the tallest person in the world was actually 2,800 miles tall, and you get a sense of the difference between Mediocristan and Extremistan.

The immediate consequence of this disparity is that the exact opposite opposite rules apply in Extremistan as what applies in Mediocristan. The average and the median are not the same. And some examples will be very much on the extreme. In particular you start to understand that in a world with this sorts of extremes in what can happen it becomes very difficult to predict what will happen.

Additionally Extremistan is the world of black swans, which is the next concept I want to cover and the title of Taleb’s second book. Once again this is a term you might be familiar with, but it’s important to understand that they form a key component in understanding what can happen in Extremistan.

In short a Black Swan is something that:

  1. Lies outside the realm of regular expectations
  2. Has an extreme impact
  3. People go to great lengths afterword to show how it should have been expected.

You’ll notice that two of those points are about the prediction of black swans. The first point being that they can’t be predicted and the third point being that people will retroactively attempt to show that it should have been possible to predict it. One of the key points I try and make in this blog is that you can’t predict the future. This is terrifying for people and that’s why point 3 is so interesting. Everyone wants to think that they could have predicted the black swan, and that having seen it once they won’t miss it again, but in fact that’s not true, they will still end up being surprised the next time around.

But if we live in Extremistan, which is full of unpredictable black swans what do we do? Knowing what the world is capable of is one thing, but unless we can take some steps to mitigate these black swans what’s the point?

And here we arrive at the last idea I want to cover and the underlying idea behind Taleb’s final book, Antifragility. As I mentioned the concept of Antifragility is important enough that you should probably just read the book, in fact you should probably read all of Taleb’s books. But for the moment we’ll assume that you haven’t (and if you have you why have you even gotten this far?)

Antifragility is how you deal with black swans and how you live in Extremistan. It’s also your lifestyle if you’re not fooled by randomness. This is why Taleb considered Antifragile his mangum opus because it pulls in all of the ideas from his previous books and puts them into a single framework. That’s great, you may be saying, but you’re unclear on what antifragility is.

At it’s core antifragility is straightforward. To be antifragile is to get stronger in response to stress. (Up to a point.) The problem is when people hear that idea it sounds magical, if not impossible. They imagine cars that get stronger the more accidents they’re in or software that becomes more secure when someone attempts to hack it, or a government that gets more stable with every attempt to overthrow it. While none of this is impossible, I agree, that when stated this way the idea of antifragility seems a little bit magical.

If instead you explain antifragility in terms of muscles, which get stronger the more you stress them, then people find it easier to understand, but at the same time they will have a hard time expanding it beyond natural systems. Having established that Extremistan and black swans are mostly present in artificial systems antifragility is not going to be any good if you can’t extend it into that domain. In other words if you explain antifragility to people in isolation their general response will be to call it a nice idea, but they may have difficulty understanding the real world utility of the idea, and it’s possible that my previous discussions on the topic have left you in just this situation. Which is why I felt compelled to write this post.

Hopefully by covering Taleb’s ideas in something of a chronological order the idea of antifragility will be easier to understand. And it comes by flipping much of conventional wisdom on it’s head. Rather than being fooled by randomness, if you’re antifragile you expect randomness. Rather than being surprised by black swans, you prepare for them, knowing that there are both positive and negative black swans. Armed with this knowledge you lessen your exposure to negative black swans while increasing your exposure to positive black swans. All of this allows you to live comfortably in Extremistan.

If this starts to look like we’ve wandered into the realm of magical thinking again, I don’t blame you, but at it’s essence being antifragile is straightforward, for our purposes antifragility is about making sure you have unlimited upside, and limited downside. Does this mean that something which is fragile has limited upside and unlimited downside? Pretty much, and you may wonder if we’re talking about man-made systems why would anyone make something fragile. This is an excellent question. And the answer is that it all depends on the order in which things happen. In artificial systems fragility is marked by the practice of taking short term, limited profits, but having the chance of catastrophic losses. On the opposite side antifragility is marked by incurring short term limited costs, but having the chance of stratospheric profits. Fragility assumes the world is not random, assumes there are no black swans and ekes out small profits in the space between extreme events. (If this sounds like the banking system then you’re starting to get the idea.) Antifragility assumes the world is random and that black swans are on the horizon and pays small manageable costs to protect itself from those black swans (or gain access to them if they’re positive).

In case it’s still unclear here are some examples:

Insurance: If you’re fragile, you save the money you would have spent on insurance every month, a small limited profit, but risk the enormous cost of a black swan in the form of a car crash or a home fire. If you’re antifragile you pay the cost of insurance every month, a small limited cost, but avoid the enormous expense of the negative black swan, should it ever happen.

Investing: If you put away a small amount of money every month you gain access to a system with potential black swans. Trading a small, limited cost for the potential of a big payout. If you don’t invest, you get that money, a small limited profit, but miss out on any big payouts.

Government Debt: By running a deficit governments get the limited advantage of being able to spend more than they take in. But in doing so they create a potentially huge black swan, should an extreme event happen.

Religion: By following religious commandments you have to put up with the cost of not enjoying alcohol, or fornication, or Sunday morning, but in return you avoid the negative black swans of alcoholism, unwanted pregnancies, and not having a community of friends when times get tough. If you don’t follow the commandments you get your Sunday mornings, and I hear whiskey is pretty cool, but you open yourself up to all of the negative swans mentioned above. And of course I haven’t even brought in the idea of an eternal reward (see Pascal’s Wager.)

Hopefully we’ve finally reached the point where you can see why Taleb’s ideas are so integral to the concept of this blog.

The modern world is top heavy with fragility, and the story of progress is the story of taking small limited profits while ignoring potential catastrophes. In contrast, Antifragility requires sacrifice, it requires cost, it requires dedication and effort. And, as I have said again and again in this space, I fear that all of those are currently in short supply


The Change Hurricane: Are we Polish Jews in 1937 or East German’s in 1988?

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Every so often in history everything changes, and people can find themselves in situations which seemed unthinkable just a few years or even a few months beforehand. Examples of this include the Sack of Baghdad (which I’ve already talked about), Poland during World War II, the Taiping Rebellion, the fall of the Aztecs and of course the recent Syrian Civil War. In all of these cases there was definitely a certain degree of surprise attached, which is not to say that these catastrophes came out of nowhere, or even that no one could have predicted them, just that they generally happened more quickly than expected and when they did happen the consequences were much worse than generally anticipated.

As we look back at these catastrophes they are all strong arguments in favor of preparing for the worst. Of course preparing for the worst is costly, but these are all situations where even large costs would have been worth it if you could be sure of avoiding the one big catastrophe. As just one example if you were a Jew in Poland in 1937, however inconvenient it might have been to take your family to America, it would have been way better than any outcome which involved staying in Poland. Yes you may not have spoken the language. Yes immigration would have been costly and difficult. Yes, you may have left friends and family and your home, but anything is better than what did happen.

Some people will argue that while all of this is obvious in hindsight, could you really expect the Polish Jews to realize all of that was coming in 1937? And this is an excellent point. To put it in more recent terms, no one imagined in January of 2011 that the Syrian Civil War would still be going on in November of 2016, that Assad would still be in power (and likely to remain in power) and that 400,000 people would have died. But in the same vein of things being clear only in hindsight, once things have happened it’s too late to do anything about them. Obviously the ideal solution is to see things before they happen, but that’s impossible. Or is it?

It is impossible to be sure about anything that hasn’t happened. Our hypothetical Jew could have fled Poland in 1937 only to have Hitler assassinated in November of 1939 by Johann Georg Elser, perhaps leading to a situation where death camps never happened. In other words it could have very easily ended up being a bad idea to make huge sacrifices in order to flee Poland. To use an actual example you could have crafted a daring plan to escape from East Berlin to West Berlin in May of 1989, risking death, when all you had to do was wait six months.

This is the question we’re faced with. Are we Polish Jews in 1937 or East Germans in 1988? And that’s nearly impossible to know, but this doesn’t mean that you shouldn’t pay attention to which way the wind is blowing and whether it’s a gentle breeze or hurricane force winds. Lately it appears that it might be the latter and that it might be blowing in the wrong direction.

As I said in my last episode, I’m at least as worried about the reaction to the election of Trump as I am about the actual election. But it’s not just the US where winds seem to be blowing in a worrisome direction and with powerful force. I’m seeing things all over the world that are worrisome and potentially catastrophic. Here’s a quick sample of some areas of concern from around the world:

1- NATO could be disintegrating: First there’s the election of Trump, but on top of that we have the top two candidates in the upcoming French Election both favoring closer ties to Russia, with even the establishment candidate saying “Russia poses no threat to the west.” As I have argued in the past Russia views NATO expansion as a major threat and a major betrayal, there’s no easier way to get on their good side than pulling back from that expansion and no quicker way to get on their bad side than seeking to continue NATO expansion.

2- Italy might be on the verge of collapse. You may or may not have heard about the huge vote recently in Italy, regarding some constitutional reforms. The leader of Italy, Matteo Renzi, said that the reforms were necessary to bring stability to Italy and he consequently resigned when they were not passed. Having a change of governments in Italy is nothing newsworthy, but Italy is in a serious financial crisis and Italian bonds represent the third largest bond market in the world. Italy may be facing a financial Armageddon regardless of what happens.

3- Turkey is getting progressively more autocratic. Turkey is still a democracy, and they still hold elections (also there’s the occasional coup) but those elections are becoming increasingly pointless. Recep Erdogan has a pretty good chokehold on things and it’s unlikely to change anytime soon. Also as Turkey becomes more autocratic, the ideological split between them and Europe widens. As an example the EU Parliament recently voted to end talks on Turkey’s membership in the EU. Turkey is still part of NATO, but on that issue I refer you back to point number 1.

4- The Middle East and North Africa are still a mess. We’ve already talked about the Syrian Civil War, and of course there’s ISIS. The good news is that ISIS appears to be near defeat, the bad news is that no one knows what happens once the various players in the region no longer have a common enemy. Also, like most people you may have forgotten about Libya, or if you haven’t you may have heard that a peace deal was signed. Well whatever the effects of that deal there’s still a vast civil war taking place, with Obama saying that not being prepared for a post Gaddafi Libya was the biggest mistake of his presidency.

5- Venezuela is suffering from hyperinflation and economic collapse. Of course the economic problems are the result of a huge power struggle between President Nicolás Maduro and his opponents, but just because there’s an explanation doesn’t mean that there’s an easy to fix. And as a side effect of this Venezuela has the highest per capita murder rate in the world.

As it stands, individually, none of these five items seems like that big of a deal or that catastrophic. Just the normal rumblings of the world. But each of them could grow into something huge. Going back through the list:

The end of NATO would mean the end of American hegemony. It has to end eventually, and better it end with a whimper than a bang, but the world that comes after it ends could be very different.

Events in Italy could mean the end of the EU, which is already looking shaky after Brexit. Also we’ve see how financial contagion spreads. The failure of Italian banks or bonds could mean another global financial crisis.

Turkey is the traditional foe of Russia. If both are resurgent and NATO goes away, do hostilities start again? How soon before Turkey and Erdogen decide that they need nukes?

The Middle East and North Africa have never been poster childs for stability, but now the chaos is beginning to spread. Refugees from these two areas are one of the major driving factors behind the EU crisis and a contributing factor to what’s happening in Italy. Syria seems bad enough already but it could get worse.

Venezuela is on it’s way to becoming a failed state. Does having a failed state to our south look the same as Europe having failed states to the south of them? It seems like, best case scenario, we end up in a situation similar to Argentina under Pinochet, and as someone who spent the latter half of the 80’s in high school debate, I can vouch for how much hand-wringing he caused.

But perhaps you remain unconvinced. So I will turn to something which does involve potential global catastrophe, nukes, war, China and shamans… I’m speaking of course about North and South Korea.

We all know that North Korea has nukes, but since the death of Kim Jong Il in 2011, the rate of advancement North Korea has shown both with nuclear weapons and missiles, has been, well, impressive. Just this year they’ve done two nuclear tests and 21 missile tests. There has always been an appalling lack of any concrete options with respect to North Korea, but as their technology gets better all the former bad options just keep getting worse.

When North Korea had just one nuke they mostly used it for leverage to acquire food aid, and as one more deterrent against invasion. Now that they have several nukes and increasingly advanced delivery systems what will they do? I think people kind of assume that things would continue as before, there would be a lot of bluster. Minor cross border incidents involving fatalities, a general despair, but nothing big would happen. But increasingly the winds of change in that region appear to be blowing more strongly. A sense of urgency is growing, and a consensus developing that North Korea is planning to use its weapons to dictate events on the peninsula. Perhaps demanding that the Americans leave.

I’ve talked before, at some length, about how nukes are qualitatively different than any previous weapon. And this illustrates the point. Imagine that North Korea got to the point where they could hit the west coast with an nuke. (Some estimates put this at only five years away.) And they threaten to nuke San Francisco unless we  remove all our forces from the Korean Peninsula. What are our options? We might hope that China would cut off trade, but it’s not like the North Koreans aren’t used to sanctions and hardship. In other words I’m sure there would be all sorts of diplomatic reactions, but there’s a good chance they wouldn’t work. So we’re looking at the threat of a nuke hitting San Francisco, and we’re out of diplomatic options. Now what?

Obviously it would be great if we could shoot the missile down, but as I mentioned in the previous episode on nukes, that’s actually difficult. A lot would depend on whether we had the right ships in place to shoot the missile down when it was launched. But let’s say, optimistically, that we have an 80% chance of shooting it down. Are we willing refuse their demands and accept a 20% chance of SF getting nuked? If we’re not willing to do that (and I suspect we wouldn’t be) what other options do we have? We could, of course, always invade, but that just changes the SF missile from a possibility to a certainty. And adds enormous war deaths on top of it.

In addition to the increased external tension between South and North Korea. South Korea is dealing with a major political crisis of its own. It’s current president Park Geun-hye has an approval rating among 19-39 year olds of 0%. Yes, you read that right, the number of people under 40 who like her is statistically undetectable. This is where the shamans come in. The reason for her unpopularity is that she has engaged in frequent consultation with an old friend who is the leader of a shamanistic cult. (In a fashion similar to Nancy Reagan.) Just the consultation might be a storm that could be weathered, but the president also funneled money to her friend.

Does the weakness and unpopularity of the South Korean president make the North Korean situation worse? That’s hard to say for sure, but it certainly doesn’t make it any better. And it seems safe to assume that for people living in South Korea things must seem pretty chaotic. Thus just like the Polish Jew in 1937 and the East German in 1988. The South Korean of 2016 is faced with a choice. They can do nothing and take their chances. Or they can spend time and money trying to mitigate the downsides of various potential catastrophes. In the latter case they’re still taking their chances they’re just trying to lower the odds of something truly bad happening.

It’s always possible that the North Korean government will collapse (though this isn’t necessarily great for South Korea either) or that some other, positive black swan will emerge, and the 2016 South Korean will be in the situation of the 1988 East German. But it’s also possible that the 2016 South Korean will be much closer in circumstances to the 1937 Polish Jew. As I said you can’t know for sure. And it’s always a balancing act between the admittedly high probability that things will be okay which makes preparing for the worst just wasted time and money, or, on the other hand, the small possibility that things will be awful, and you’ll be grateful for every bit of preparation and upset that you didn’t do more.

One of the reasons I’m recording this episode and indeed one of the reasons for having this podcast in general is that people have a tendency to underestimate the chances of something bad happening. So if you’re on the fence about which course to choose I think you should choose to be prepared. But perhaps even more important I think you need to be aware of the political weather. If you’re a 1937 Polish Jew and you’re not paying attention to Hitler then of course you’re going to make the wrong choice. On the other hand for those East Germans preparing to escape in 1988 Gorbachev had been in power since 1985, so for them the wind was blowing the opposite direction and they just had to wait.

The title of the episode is The Change Hurricane, and thus far all I’ve talked about is some local storms which, while scary, and possibly globally significant (I can only imagine what would happen if North Korea nuked San Francisco) are still fairly local. If we’re talking about hurricane’s one would expect something bigger than just a spat between the two Koreas which has been going on since 1948. I am of the opinion that things are bigger than just the isolated incidents I mentioned above, but this is also where things get more speculative. Also it’s time for another list.

Outside of the storms I’ve mentioned here are some of the longer term weather patterns which I think are blowing in the wrong direction:

1- Declining American Power: We’ve already talked about the end of the American hegemony and as I mentioned it has to end eventually, and when it does I doubt we’re going to transition to another unipolar world, or even a bipolar world. I think there will be lots of countries trying to fill the gap. Certainly China and Russia, but also Turkey, Iran, India and Brazil are all going to want a piece of the pie. And that could play out in interesting and potentially violent ways.

2- Nuclear proliferation: Closely related to the last point. There are a lot of countries who could currently make a nuclear weapon, but have chosen not to because they consider themselves to be under the US nuclear umbrella. Turkey and Japan would certainly fall into this category. Does a declining America and a belligerent Russia and China set off a new round of proliferation? If it does the chances of weapons being used goes way up.

3- Immigration: This is a hot button issue with lots of emotion on both sides, and by classifying it as a negative trend you may feel that I’m already choosing a side, and perhaps I am, But in a sense this is a secondary effect. If things get worse because of wars or famine or global warming, then the number of people willing to risk nearly anything to get to a better country (similar to our 1937 Polish Jew) is going to go way up. And insofar as I am taking a side I think that there is a limit to the rate at which immigrants can be assimilated, and when this limit is exceeded, things can start changing in unexpected ways, as we’re seeing in Europe.

4- Debt: The modern, developed nation state, is able to accumulate debt in amounts never before imagined. I see that as a huge source of fragility. Perhaps it is or perhaps it isn’t, but we could be getting an example of how bad it can be if Italy runs into problems with its bonds. One early indication that makes me worry about Trump is it looks like he might explode the deficit.

5- Social Unrest: I think by historical standards the level of social unrest is still pretty low. But, as a consequence our tolerance for it is not that high either. What happens if Trump is as bad as his worst critics fear, and we have riots every night in most major cities? I can’t even begin to predict what that looks like, but I think, at a minimum, It’s safe to say that the anti-cop/pro-cop division would become much more pronounced.

6- Environmental concerns: I already mentioned this to a certain extent under immigration, but for many people the trend that worries them the most is global warming. One of the chief arguments is that this makes things worse in places where it’s already pretty bad, like Sub-Saharan Africa. But also if the sea level rises by six meters that’s not good either. I think this is more slow moving than the rest, but it could also be the hardest to do anything about.

This entire episode could be written off as nothing more than fear-mongering. We’re probably not the 1937 Polish Jews and I assume most of my readers aren’t even 2016 South Koreans. We could in fact all be like the 1988 East Germans and we’re only a short time away from the dawning of a new age where we never have to worry about another Hitler, or Nuclear Proliferation or Global Warming, and any preparation you do now is just a waste of time. As they say, anything is possible, but that particular scenario seems unlikely, and not just because we’ve completely neglected to mention things like natural disasters. At least with Korea and Syria we have some control.

In other words.Bad things happen, and most people are surprised by them. But you don’t have to be. If you see which way the wind is blowing you can take steps to lower your risk. And it’s possible that those steps will be a waste of time and money, but it’s also possible that in 2019 when President Trump defaults on the debt, and panic grips the world, that you’ll be glad you spent some time preparing for the worst.