Black Swans in America

“The use of traveling is to regulate imagination by reality, and instead of thinking how things may be, to see them as they are.” – Samuel Johnson,

I just spend a month journeying down America’s main-streets, from New York to LA on a bumpy, crowded and occasionally smelly greyhound bus. On my many detours I wandered the streets, getting the feel for these cities through the soles of my feet. Traveling alone proved daunting, but also an opportunity to meet with locals and fellow wanderers.

Such raw exposure taught me what newspapers and annual economic reports fail to show, the robustness of this country. This resilience allows it to survive and even thrive on Black Swans, the low probability high impact events Nassim Taleb warns about.

Taleb points out the redundancies in our own bodies, two kidneys, two eyes and two halves of the brain, retained as backups in case one should fail. Now think of the Navaho in their Arizonan wasteland, ignored and tolerated for near a hundred years as the American empire encircled it. Then, in 1942 an ambitious recruiter went into the reservation, promising new jackets and boots to those who would fight. Besides being great soldiers, the Navaho’s isolation had allowed them to retain a distinct language only a few non-Navaho spoke.  Turned into code, the US army could now communicate near instantaneously and securely throughout the pacific, an advantage that helped secure victory.

Today, two years after the great recession, people are making by. (re)Starting businesses, moving thousands of miles to better job markets, or simply taking unemployment as an opportunity to visit all 50 states. I passed through dilapidated cities empty of people, and others thriving as they emerged from their ashes. It brought home the point made by the economist Edward Glaesser, “public policy should help poor people, not poor places”.

Finally, the sheer diversity of experiences and environments allows Americans to capitalize on any new development, be it oil in Tulsa or Country music in Nashville. An event which might prejudice some benefits others, as the price of oil has led to a revival of urban centers at the expense of suburbs (much to my personal benefit, being without a car).

Before you mistake my analysis for misplaced patriotism, I must note that I am not a citizen and have remained skeptical of any allegations of American exceptionalism. What I’m arguing for instead is a realization that the US has gotten something right, which may give it an advantage in this time of increasing extremes.

What is it then that allows the country to retain this diversity, these redundancies? Geography, government, culture? I will retain from unfounded speculation, encouraging instead further investigation.

Anecdotes and generalizations have proven insufficient.  Rather than projecting the world’s future based on broad strokes, lets get our feet on the pavement and our hands dirty. We enter this new age of uncertainty equipped with both mountains of data and the means to analyze it. For instance, the World Bank has recently opened its virtual doors, offering invaluable information for free.

Lets use it.

Erwin Knippenberg

The Barefoot Economist

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