2019-02-01

Globalization Leads to Existential Systemic Fragility

A civilization has a trade-off between globalization, efficiency, and fragility on one hand, and localization, expense, and robustness on the other. Capitalism is very good at choosing the former. Efficiency requires specialization, and concentration. These lead to atrophying of local capabilities, lengthening and complexifying supply chains, and ultimately fragility.

Past civilizations have collapsed because disruptions on the order of 10% of total capacity, in trade for example, lead to much deeper disruptions of capability through cascading failure of economic systems. Hyper-optimized systems specialize for a given set of conditions. When those conditions change, they don’t work nearly as well, or become unprofitable. If things have become too fragile, the expertise and infrastructure for a more robust backup does not exist, so nonlinearities pile on nonlinearities and the whole thing breaks down. We see this in a more limited way in financial collapses. A good analogue is the breakdown of organ systems in a fatally injured or sick animal.

This mostly doesn’t happen, but it does happen and has happened. “Mostly” isn’t good enough. Especially when you include 50% or 90% disruptions of capability, which by one mechanism or another, do also happen. The Bronze Age Collapse and the fall of the Western Roman Empire come to mind.

When it does happen, the technology level reverts to the level of systems capable of local self replication. Animal husbandry, blacksmithing, basic agriculture, simple building, and human social groups, along with a handful of other technologies, usually aren’t lost in a systemic collapse. More complex technologies mostly are.

The problem gets worse as each of these systems become replaced by more efficient globalized versions with longer supply chains: see modern factory farming, industrial agriculture, modern manufacturing, and so on. If the power goes out, a lot more turns off than just the lights.

So efficiency chasing, especially in the limit, transforms a risk of systemic collapse and need to rebuild into a potential existential risk. One of my best candidates for the great filter is systemic collapse following full industrialization where all locally self-replicable life, including intelligence, is replaced by industry. Such a collapse would be total and unrecoverable, and has a good shot at being nearly inevitable.

A competent government would monitor the situation and provide incentives or develop technology that increased robustness in the the more fragile and interdependent parts of the necessary economy. Maybe even add a bit of hormetic entropy to the system to naturally stimulate robustness.