The "too big to fail" approaching means gambling on one and only one outcome. If an objective analysis of the chances for that outcome to happen (peak oil, limited resources, the environment, global competition...) shows that they equal zero, than we are not talking about something sudden and unexpected. As Taleb has noticed in his book "The Black Swan", it's like a well-fed turkey seeing humans as friends. So, where are these too big to fail structures?

There is peak oil. Peak oil is an event after which becomes increasingly complicated to dig out more oil. It is a point of no return. Oil is being used both as a fossil fuel and raw material. It's relatively easier for a limited number of people to earn money on fossil fuels. Also, fertilizers (food production) are made of oil. It's difficult to define priorities, especially because food production and water protection is very complicated profitability-wise. Food production and supply chains may especially be in trouble in big urban areas. It is like moving to the wall (increasingly fast because of global competition) even if it is very probable (if not 100% certain) that we are about to hit it soon. We don't know how soon will it happen (global competition and investments don't allow oil companies to make their limitations public), but we are talking here about a maximum of a decade or two.

Global economy is also too big to fail. It is not only about global competition, but also about covering every person and activity living in developed societies (settlers instead hunters and gatherers) under one big roof of free enterprise. Also, the rich tend to be richer because they have know-how, experience and tradition, experts, investments, connections and habits on their side. Their habits can be especially challenging because luxury and careless behaviour are driving forces of business as usual - they give it a purpose. Also, as long as natural and debt limits are not reached, diversified activities and investments (if they are the best in the world) are good for business because risks are spread across different areas (all eggs are not in one "basket"). If we presume that global corporations (an alternative name for globalization as usual) are indeed too big to fail, what would exactly happen if they failed? When they enter natural markets, they eliminate less competitive companies. Differences between more and less competitive companies are very subtle and sometimes marketing is the only difference. When global corporations (and their investments and the latest know-how) withdraw, there won't be local and national companies ready to replace them.

Competition, new technologies, innovations and interactions are forcing businesses to move increasingly fast. If your business doesn't move fast enough, someone else's will and your business will not be competitive anymore. The difference between innovation and invention is that innovation is accepted and bought by other people. As such, an innovation or a new product must be advertised. Customers need to be convinced that they will be happy only after they have bought the latest product or service. Global economy as usual feeds on consumerism, perpetual unhappiness and large numbers. In this kind of arrangement time intervals between the previous generation of a product and the new one should be increasingly short.

Modern economy relies more on services than on goods. Products are the root of every society, but "everyone" can make them, so global competition doesn't depend much on them. At least things used to work this way with business as usual on a supposedly unlimited planet.

Global population, if growing forever, can become too big to fail. It is probably already too big to fail. Population growth and challenges to control it make more visible the inertia existing in all systems that are too big to fail. Also, how will towns (or even worse large cities)  deal with the modern challenges?

Once the environment is devastated, it can be very complicated to regenerate it. We have forgotten that we are an animal species just like any other. Even worse, we are physically weaker and younger than some of them (crocodiles and mosquitoes have survived many different climate conditions).

So, it seems that climate change belongs to just one out of many too big to fail interconnected systems. Negative outcomes, because of our inertia, look highly improbable even when they aren't. They will look obvious and logical after the tipping point has been reached.

to big to fail, complexity, business

Last updated 462 days ago by Aleksandar Malečić