Wikipedia offers the definition of a black swan event as an unpredictable or unforeseen event, typically one with extreme consequences; as in the sentence: “geopolitical black swan events, such as the Arab Spring and the Japanese earthquake, have further complicated the market dynamics”. And the Financial Times similarly defines one of these black swans as “An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. This term was popularised by Nassim Nicholas Taleb’s book The Black Swan: The Impact of the Highly Improbable.”
It is, of course, that time of year when everything is new and fresh, the possibilities seem endless, and the horizon stretches off into infinity. The cruel, cold realities will come along soon enough, so, in the meantime, join us for a bit of speculation over just what might happen in 2015. These black swans swim into view without our expectation of their happening – so perhaps some of these predictions are too logical to be pure black swans. Regardless, we offer them all in the furtherance of enthusiastic conversation and debate.
These thoughts, of course, are rather different than that robust genre of alternative history fiction, stories that ask what would have happened if just one moment in history had turned out differently that it did. What, for example, if Pickett’s doomed charge had won the day at Gettysburg and the South had been victorious; if the D-Day invasion had failed for want of quick success on the beaches; if the Ottomans had defeated the Holy League and the Venetians at Lepanto and gone on to seize the rest of the Mediterranean Sea; or if any of those assassinations that actually happened – Abraham Lincoln, the Archduke Franz Ferdinand, John Kennedy, Yitzhak Rabin, Patrice Lumumba – had been foiled somehow. Today’s black swan collection looks forward instead, even as it gives opportunities for some interesting speculations – of events that will push us off our straight-line projections. So, here goes.
Elections are going to be big this year, offering some real opportunities for startling changes in places that produce some really sweeping repercussions down the line. Coming up just a few weeks from now, on 25 January, Greece will hold its next parliamentary election. That nation has been tottering on the brink of a national financial meltdown and government fiscal and monetary collapse for years – ever since it first came to light in 2011 that the Greek government had seriously under-reported its overall budgetary deficits – provoking some international financial panic and much fiscal and monetary flapping about in Europe. But this time around, what if the leftist Syriza Party under Alexis Tsipras – a staunch opponent of any more austerity measures, in favour of a withdrawal from the euro zone and perhaps even a default on government debt – actually comes out on top and forms the next Greek government, rather than something like the current more-centrist government under Antonis Samaras?
Should that happen, will the cascading effects include the departure from the euro zone by other Southern European nations as well, the end of any consensus support for austerity measures to cope with the region’s financial woes, and the virtual collapse of Germany’s leadership of the European financial and monetary ships? Continuing the avian metaphors, that could provoke a veritable flock of chickens to come home to roost – most likely jolting the entirety of Europe right back into recessionary times, fatally weakening the euro on international markets, and slackening demand still further for Africa’s primary commodities. Black swan enough?
Now, in Israel, there is also an election coming up. Most people outside that nation have found it easy to believe Binyamin Netanyahu’s hard line policies and the parties that have been part of his coalition will remain in virtually impregnable positions of authority. But, increasingly, some reports indicate Isaac Herzog (together with Tzipi Livni) is reinvigorating a previously flaccid Labour Party for the impending election on 17 March, and that just possibly, a silent majority of Israelis hungry for an end to their near-perpetual state of emergency and frequent hostilities will find themselves drawn to someone – and a party – offering a possible way out of that “wilderness”. And should that happen, and if it is strong enough to reign in the settler blocs once it comes into power, it might conceivably push negotiations back onto a whole new path. Now that is one heckuva black swan, for sure.
Then just two months later, in Britain, they too have a national parliamentary election. How about the startling possibility the UK Independence Party under Nigel Farage might come in second place, heartlessly elbowing that proud Labour Party under the rather feckless leadership of Ed Milliband into a deeply embarrassing third place finish. Think of it this way, in Scotland, where much of Labour’s strength remains in parliamentary terms, the Scottish National Party will steal Labour’s lunch. Meanwhile, in the post-industrial cities of Midlands England where Labour has traditionally found its second centre of strength, the UKIP, cleverly building on the British populace’s deep and growing dislike of the EU and their apparent inability to visualise Ed Milliband leading their nation, instead casts a very large protest vote to Farage’s ragtag, ideological mishmash of a party. If the Greek vote didn’t drive a stake pretty close to the heart of the EU and the euro zone, would a strong UKIP showing help shove that silver stake ever more deeply into the flesh?
Meanwhile, while the massive drop in world oil prices will undoubtedly benefit those of us who consume petroleum products for any number of ways, it will continue to play havoc with a whole collection of regimes – Venezuela, Nigeria, Angola, Russia – but most particularly those nations with expansive government spending based on a bet that oil revenues will come in at $100/barrel or more, funds largely designed to finance government expenditures (or where a serious percentage of those revenues are skimmed off the top for the benefit of a small elite). Revenues coming in at half that level may well provoke some really serious social unrest and economic distress across those nations. Venezuela’s regime will be particularly vulnerable as it is already in some pretty difficult circumstances. But the combined action of low petroleum prices and the continuing bite of western financial sanctions will almost certainly push Russia into a serious recession – if it hasn’t already achieved that. Don’t bet on Venezuelan President Nicolas Maduro even lasting out the year. But do put down a speculative bet that Russian President Vladimir Putin may make his own bet on yet another foreign adventure so as to take Russian minds off their rising economic troubles in an attempt to divert attention into some carefully nurtured patriotic fervour.
Now that the hacker attack on Sony Entertainment Pictures in the wake of its production and planned release of The Interview, the film that postulated an assassination attempt on Kim Jong-un, has become some recent, unsettling history, it is time to face the music that 2015 will see growing numbers of cyber attacks on all manner of institutions. (Of course this Sony attack was not the first cyber attack. In the past decade there already was the Stuxnet attack on Iranian nuclear separation centrifuges, as well as an apparent Chinese attack on various American defence contractors working on advanced weapons systems. Interestingly, the latter was more a subtle effort to penetrate company systems and abscond with data, rather than to destroy the software of an operating system and the nuclear centrifuges, as with the Iranian incident.) And so, what will be under threat? Just for starters, consider a long list of those highly complex computer-controlled electric and water reticulation systems around the world, the vast network of interconnected businesses and the whole range of consumer to company-based systems like Internet banking. All of these systems have multiple entry points and multitudes of users and all of them will be under threat from a single hacker or organised groups. 2015 will see more of them, now that would-be hackers (wherever they are) see just how easy it was to thoroughly disrupt a major international corporation. Is it too much to predict that a swarm of such attacks come about as a kind of 9/11 2.0?
Looking for a really interesting black swan? How about the possibility that, following in the footsteps of that generally unexpected US-Cuba rapprochement at the end of 2014 (although it was predicted in this space last year), Iran, the US and the rest of the Group of Six find some serious common ground in settlement to the long-standing dispute over Iran’s putative nuclear aspirations and pull together in a cogent, coordinated effort to put an end to ISIS’ reign of terror across the northern tier of Iraq and eastern Syria? While coordination of a coalition bringing together the West, Iran, the Gulf states, along with a few other miscellaneous nations, would be a really tough act to bring about, imagine the game changing impact on the geopolitical balance for the Middle East if it should happen. That black swan is swimming about fiercely and flapping its wings wildly, just with the thinking of this one.
Over in America, meantime, how about the still-virtually unimaginable moment – in a real black swan event – when Hillary Rodham Clinton announces somewhere around mid-year that she has decided running for president is no longer where her personal priorities are. Furthermore, she hopes other, younger Democratic Party figures – the next generation of talented leaders, people like Senator Elizabeth Warren, former Senator Jim Webb, and former Governor Martin O’Malley – should step up and seize the challenge of carrying on the leadership of their party into the 21st century. Over in the other camp, however, there are very few black swans left flapping about. Former Florida Governor Jeb Bush is going to go for the nomination, along with a whole posse of others, and observers will see them making their announcements one by one as the months get closer and closer to the first caucus vote in Iowa and the first primary in New Hampshire.
Finally, for the most extraordinary black swan in that entire eyrar, sometime along in 2015, astronomers will announce they have detected evidence strongly pointing to the possibility of extra-terrestrial intelligent life – in the vast data-stream that has identified a new roster of Earth-like planets being monitored by advanced satellite observations. Such knowledge would have virtually unimaginable impacts on Earth-based politics, religion and social structures – just for starters. Now that would be the mother of all black swans.
Anybody want to issue odds on any – or all – of these black swans landing in our pond? DM
Photo: A still from the original The War of the Worlds movie by Byron Haskin, based on the novel by HG Wells.
Albert Einstein worked as an electrician at Oktoberfest 1896.