White swans

Today, technology and the free market are where future White Swans may lurk because politics seem to be a no-White swan zone

Black Swans are wildly unexpected bolts from the blue that in today’s parlance are ‘game changers,’ usually for the worse. The Ebola near-pandemic; December 7th, 1941 and September 11th, 2001; and bad days for the stock market in the Octobers of 1929, 1987 and 2008 are examples. A Unicorn is the Black Swan equivalent in the venture capital world but with a huge difference — the billion to one shot that pays off massively.

Using the Unicorn analogy, do White Swan events that could have dramatic positive effects such as finding the cure for pick a disease or end violence in the Middle East even exist? Today, in Washington, where the political mood is both bitter and septic, White Swans seem rarer than Unicorns. And no wonder.

Regardless of whether you are a supporter or opponent of President Donald Trump, conjuring up White Swans is not easy. This president, who has no apparent strategic or ideological view of the world except harbouring a similar predilection to the Pope about infallibility, does not seem worried by his otherwise seemingly irrational acts. Domestically, the threat to impose tariffs on steel and aluminium invites a trade war and is a direct threat to some of America’s closest allies. The infrastructure bill and sensible steps to control gun violence seem to be suffering from crib death.

Internationally, relations with the US and Russia (and many of our key allies) have never been worse. Yet, the president seems not to have any idea of how to reverse these conditions. The US is moving its embassy to Jerusalem. That pleases the Israelis. Yet, aside from that distinction and from honouring decades old campaign promises, what benefit will America get from this move that has infuriated the Arab and Muslim worlds. And the more we apply military force in Afghanistan and Syria, the more deeply we become trapped.

Regardless of whether you are a supporter or opponent of President Donald Trump, conjuring up White swans is not easy. This president, who has no apparent strategic or ideological view of the world except harbouring a similar predilection to the Pope about infallibility, does not seem worried by his otherwise seemingly irrational acts

Against this rather sombre picture—and with stock markets that are volatile and unpredictable at best — will any White Swans materialise? Can the US be instrumental in creating the conditions for a White as opposed to a very Black Swan event happening? A thought game is helpful.

Obviously, a most beneficial White Swan event could arise from American, Russian and Chinese leaders. Donald Trump could become a born again president. A precursor action would be to cancel his Twitter account or refrain from using it as a weapon that as often as not shoots him in both feet. He could actually revise his infrastructure bill to make it workable. He could re-join the Transpacific Trade Partnership if allowed back in. He could at least consider science in dealing with Climate Change. And he could decide that nepotism is no way to run a government.

Vladimir Putin, after the March 18th election, could emulate Mikhail Gorbachev with his own versions of glasnost and perestroika. He could pull Russia out of Ukraine; announce a real referendum in Crimea to determine its future; force Bashar al Assad and Syria to form a coalition government to stop the senseless slaughter. And instead of showing ancient video cartoons of a faux Russian rocket hitting Mar a Lago at his State of the Federation chat, he could be embracing arms control agreements to prevent a new strategic and nuclear arms race.

President Xi Jingping could halt the militarisation of tiny islets in the South China Sea. He could loosen restrictions on Chinese access to the Internet. Most importantly, he could lean on Kim Jung Un to induce North Korea to negotiate its nuclear program to limit its scope, reach and danger to the region. And he could agree to some limits on his terms as president. Do any of these White Swan events seem even plausible? The more likely White Swans may be transformed Unicorns, that is ideas from the private sector that have hugely positive impact. The medical field and genetics are obviously ones that could cure or prevent disease and rectify DNA weaknesses.

Artificial Intelligence (AI) is a second. Beyond autonomous cars, AI could provide tremendous assistance from making work more efficient and effective to providing at home diagnoses of illness and even home schooling.

One area that has been relatively unnoticed is artificial food. Manmade fish and meat products that reportedly taste similarly obviously could ease world hunger once the distribution problem is solved. It is really access to food rather than total amounts that create much of global starvation. The same breakthroughs could apply to making fresh water.

John Maynard Keynes argued that technology ultimately offered answers to otherwise seemingly intractable problems. Today, technology and the free market are where future White Swans may lurk because, politics seem to be no-White Swan zone.

The writer is Chairman of two private companies; senior adviser at the Atlantic Council; and Distinguished Senior Fellow and Visiting Professor at the US Naval War College in Newport Rhode Island. He can be reached @harlankullman on Twitter

Published in Daily Times, March 8th 2018.