Tuesday, September 21, 2021

Predictable Surprises

The title of this post is oxymoronic. It is also the title of a book published by the Harvard Business School Press in 2004[1]. Predictable Surprises are dangers which many of us know all along but do little to prevent or stem. In the following paragraphs, we explain some Predictable Surprises that have hit us in the last 25-30 years.

The COVID19 Pandemic – and the Second Wave

The COVID19 pandemic was famously predicted as the greatest threat to humankind by Bill Gates in a TED-X talk in 2015[2]). Several epidemiologists the world over also predicted it, but none of these voices – not even Bill Gates’s – were sufficiently heeded to prevent the Predictable Surprise from causing untold damage.

Bill Gates said in 2015,

“If anything kills over 10 million people in the next few decades, it's most likely to be a highly infectious virus rather than a war. Not missiles, but microbes. …  We're not ready for the next epidemic … you can have a virus where people feel well enough while they're infectious that they get on a plane or they go to a market …  a virus spread through the air, like the Spanish Flu back in 1918 … would spread throughout the world very, very quickly.”

That led to a deadly global Predictable Surprise. Much of the world, including the richer countries, was caught unawares.

We did not sufficiently heed the dire prognostications of an exponentially larger ‘second wave’ – and many countries (among the worst being India) were caught unprepared for a second Predictable Surprise. The Third Wave has so far not had severe effect because we woke up partially – the spike in cases has been mitigated by better medical infrastructure, beefed-up vaccination drives and indications of possible ‘herd immunity’ by serological surveys, indicating that a rising proportion of countries’ populations have developed COVID19 antibodies.  

About two decades before this, in a single year – 2001 – the world saw two predictable surprises unfold.

Failure of Auditor Independence

The Enron-led financial meltdown which came about because of what we knew all along – conflict of interests of auditors leading to unreliable financial statements. After Enron, other large corporates like Worldcom and Global Crossing also bit the dust. This led (over the next year or two) to many countries introducing laws and rules mandating auditor rotation and prohibiting audit firms from taking up non-audit work for the same client or client-group (a good example is the Sarbanes-Oxley Act in the US). It is widely understood that these rules only reduce but do not eliminate the conflicts of interest.  

Terrorism and the Aftermath – More Autocratic Democracies, More War

The 9/11 Security Meltdown led to 3,000+deaths and 6,000+ injuries in the US alone. This was a Predictable Surprise because the US Intelligence Community had been hearing of enough chatter about impending terrorist attacks on the US mainland. They even heard that bin Laden might try to attack US targets using airplanes as weapons. Yet, nothing was done to elevate the perceived threat level of what the chatter indicated. This was a failure of prioritisation by the US Political Leadership.

In the years that followed, hitherto democratic Governments hid behind the fig leaf of the War on Terror to arm themselves with and regularly misuse excessive surveillance and spying powers, especially the PATRIOT Act in the US and the UAPA in India. The UAPA, though enacted first in 1967, has been significantly amended 5 times since 2004, each amendment curtailing the privacy and freedom of the country’s citizens. This includes spying on a large scale which Edward Snowden famously blew the whistle on. Since then, has surveillance been curtailed? Attempts have been made to curb this, like the USA Freedom Act in the US. (In India, the individual privacy situation has gotten worse in the last decade). 

War was declared and affected several other countries including Afghanistan, Iraq, Iran, Yemen, Israel, Palestine, Syria in the decades following the 9/11 Attacks. India too has suffered several terrorist attacks.

Choosing where to live: An Ongoing Predictable Surprise

California and Japan (Kyoto to Tokyo) are the Top Two Most Risky places to live in, ranked by proneness to natural and man-made disasters –

·    Japan with its Earthquakes – (there are 100s of tremors every month), Tsunamis (they have happened often enough to be one of the Japanese language words accepted into the English lexicon, Nuclear Plant Meltdowns, and

·    California in the US with its risks of Forest Fires and pollution (happens every year, and for upto 8 months every year), Earthquakes (there are 100s of tremors every month in some places) and Volcanoes (the entire Yellowstone National Park is one huge Caldera – it is the mouth of the largest on-land volcanic crater on Planet Earth). SF regularly has huge sinkholes appear suddenly into which cars can get swallowed.

·    Southern Gulf of Mexico bordering states face hurricanes and typhoons every year, even over extremely populous areas. Eastern border states (NY/NJ/Mass/Penn etc) face blizzards and snowstorms routinely almost every winter. Frequency of occurrence of such extreme weather events has increased to an extent that it can no longer be denied plausibly that this is in large part due to Climate Change which has been predicted and denied in equal measure.

Yet, people live here in ever-growing numbers in complete denial of these obvious risks – like frogs in the steadily heating up beaker. These places are among the most densely populated places on Earth, having the world’s costliest real estate. Choosing to live in these states ignoring Nature’s signals is inviting Predictable Surprises into your door.

Tragedies of the Commons

This is a class of Predictable Surprises caused by collapse of ecosystems because the incentives of an individual member of a Group with common interests and shared resources has incentives that are opposed to the Group’s well-being.

Excessive extraction of non-renewable resources, Drawing excessive electricity from the electrical grid leading to grid collapse, Clearing forests for agriculture, Freeloaders in Cooperative Societies who do not co-operate with the majority, Over-extraction of ground water, too much livestock grazing, over-fishing, and Burning of post-harvest sugarcane stumps before replanting leading to pollution in Delhi are all examples of Predictable Surprises in the form of collapse of the relevant ecosystem/ common resource.  

Can you think of any more such Predictable Surprises?


[1] This piece is based on ideas from this book, authored by Max Bazerman and Michael Watkins.

[2] https://www.ted.com/talks/bill_gates_the_next_outbreak_we_re_not_ready/transcript?language=en

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