Paradoxically, one can make long-term predictions on the basis of the prevalence of forecasting errors. A system that is over-reliant on prediction (through leverage, like the banking system before the recent crisis), hence fragile to unforeseen “black swan” events, will eventually break into pieces. Although fragile bridges can take a long time to collapse, 25 years in the 21st century should be sufficient to make hidden risks salient: connectivity and operational leverage are making cultural and economic events cascade faster and deeper. Anything fragile today will be broken by then.
The great top-down nation-state will be only cosmetically alive, weakened by deficits, politicians’ misalignment of interests and the magnification of errors by centralised systems. The pre-modernist robust model of city-states and statelings will prevail, with obsessive fiscal prudence. Currencies might still exist, but, after the disastrous experience of America’s Federal Reserve, they will peg to some currency without a government, such as gold.
The question for Americans is can our states escape from the disastrous destructiveness of the world's most powerful central state. Or will we all be chained to its immense profligate irresponsibility and be dragged down to the depths. In that world it will pay to be a Hawaii or Texas at the periphery rather than trapped in the belly of the beast. Read the whole thing.
Incidentally, I do not subscribe to his technological cynicism. Clearly Prof. Taleb understands risk more than he understands technology and by extending his accurate analysis of the demise of the omni-competent state into techno-dystopia is more Mad Max than masterful.
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