War or No War

War or No War

Let us take a look at Europe before the creations of the nation-states of Germany and Italy (marketed as “re-unification,” as if these nations had been crisp units in some romantic past). There was, until the creation of these romantic entities, a fissiparous and amorphous mass of small statelings and city-states in constant tension—but shifting alliances. In most of their history, Genoa and Venice were competing for the Eastern and Southern Mediterranean like two hookers battling for a sidewalk. And here is something comforting about statelings at war: mediocrity cannot handle more than one enemy, so war here turns into an alliance there. Tension was always present somewhere but without large consequences, like precipitation in the British Isles; mild rain and no floods are vastly more manageable than the opposite: long droughts followed by intense rainfall. In other words, Mediocristan.

Then of course the contagious creation of nation-states in the late nineteenth century led to what we saw with the two world wars and their sequels: more than sixty million (and possibly eighty million) victims. The difference between war and no war became huge, with marked discontinuity. This is no different from a switch to “winner take all” effects in industry, the domination of rare events. A collection of statelings is similar to the restaurant business we discussed earlier: volatile, but you never have a generalized restaurant crisis—unlike, say, the banking business. Why? Because it is composed of a lot of independent and competing small units that do not individually threaten the system and make it jump from one state to another. Randomness is distributed rather than concentrated.

Some people have fallen for the naive turkey-style belief that the world is getting safer and safer, and of course they naively attribute it to the holy “state” (though bottom-up Switzerland has about the lowest rate of violence of any place on the planet). It is exactly like saying that nuclear bombs are safer because they explode less often. The world is subjected to fewer and fewer acts of violence, while wars have the potential to be more criminal. We were very close to the mother of all catastrophes in the 1960s when the United States was about to pull the nuclear trigger on the Soviet Union. Very close. When we look at risks in Extremistan, we don’t look at evidence (evidence comes too late), we look at potential damage: never has the world been more prone to more damage; never.6 It is hard to explain to naive data-driven people that risk is in the future, not in the past.

The messy multi-ethnic empire, the so-called Austro-Hungarian Empire, vanished after the great war, along with its Ottoman neighbor and rival (and, to a large extent, sibling—don’t tell them), to be replaced with crisp, clean nation-states. The Ottoman Empire with its messy nationalities—or, rather, what was left of it—became the state of Turkey, modeled after Switzerland, with nobody noticing the inconsistency. Vienna became trapped in Austria, with whom it shared very little outside the formal language. Imagine moving New York City to central Texas and still calling it New York. Stefan Zweig, the Viennese Jewish novelist, then considered the most influential author in the world, expressed his pain in the poignant memoir The World of Yesterday. Vienna joined the league of multicultural cities such as Alexandria, Smyrna, Aleppo, Prague, Thessaloniki, Constantinople (now Istanbul), and Trieste, now squeezed into the Procrustean bed of the nation-state, with its citizens left in the grip of intergenerational nostalgia. Unable to handle the loss and integrate elsewhere, Zweig later committed suicide in Brazil. I first read his account as I was put in a similar situation of physical and cultural exile when my Levantine Christian world was shattered by the Lebanese war, and I wondered whether he might have stayed alive had he gone to New York instead.

1 I bypass here the economic argument as to whether autonomous city-states were invigorated with economic energy (as Henri Pirenne or Max Weber advocated, in a sort of romantic way); my (mathematical) point is that a collection of small units with semi-independent variations produces vastly different risk characteristics than a single large unit.

2 It is quite distressing to hear debates about political systems that make comparisons between countries when the size of the entities is not the same—say, comparing Singapore to Malaysia. The size of the unit may matter more than the system.

3 Thankfully, the European Union is legally protected from overcentralization thanks to the principle of subsidiarity: things should be handled by the smallest possible unit that can manage them with efficacy. The idea was inherited from the Catholic Church: philosophically, a unit doesn’t need to be very large (the state) nor very small (the individual), but somewhere in between. This is a powerful philosophical statement, particularly in light of both the transfers of fragility we saw in Chapter 4 and the notion that size fragilizes, much on which later.

4 When randomness gets distributed across a large number of small units, along with small recurrent political disorder, we get the first type, the benign Mediocristan. When randomness concentrates, we get the second type, the sneaky Extremistan.

5 Note that people invoke an expression, “Balkanization,” about the mess created by fragmented states, as if fragmentation was a bad thing, and as if there was an alternative in the Balkans—but nobody uses “Helvetization” to describe its successes.

6 A more rigorous reading of the data—with appropriate adjustment for the unseen—shows that a war that would decimate the planet would be completely consistent with the statistics, and would not even be an “outlier.” As we will see, Ben Bernanke was similarly fooled with his Great Moderation, a turkey problem; one can be confused by the properties of any process with compressed volatility from the top. Some people, like Steven Pinker, misread the nature of the statistical process and hold such a thesis, similar to the “great moderation” in finance.

Related reading: Chapter 6 of Antifragile, Tell Them I Love (Some) Randomness.