Andrew Zolli and Ann Marie Healy introduce readers to Resilience: Why Things Bounce Back in an intriguing manner - by interlinking a natural calamity, Hurricane Katrina, that struck the US in 2005 with the food riot in Mexico in 2007, which had serious political and humanitarian consequences.
The two apparently separate events were connected, the writers argue, by two more apparently disconnected developments: Creation of North American Free Trade Agreement (NAFTA), in 1994, which converted Mexico into a net importer of its staple diet corn, and a flurry of investments in corn-based ‘green-fuel’ production in the US in the days after Katrina.
As US farmers moved to meet domestic demand for auto-fuel, edible corn prices became interlinked with volatility in crude oil prices. And on January 31, 2007, corn price in Mexico City hit an all-time high of 35 cents a pound. “Corn was suddenly 400 times more expensive than it had been just three months earlier.”
Calamities may, and do occur. But the fragility and deeply interconnected nature of the very systems that appear robust have turned today’s world into a place where “volatility of all sorts has become the new normal”.
Zolli and Healy are convinced volatilities are here to stay. Katrina, Haiti, BP, Fukushima, the economic crash, the Great Recession, the London Mob, Arab Spring - the list keeps growing.
The so-called ‘safety measures’ may prove futile. Seat belt was introduced to protect drivers from the consequences of bad driving. It ended up encouraging bad driving, leaving other road users more vulnerable. Cabs fitted with an anti-lock braking device tend to take more risks and have a higher accident record. “The safer skydiving gear becomes, the more chances skydivers will take, in order to keep the fatality rate constant,” said Bill Booth, a famous skydiver.
Nosing out fragility
The culture of risk is well defined, whether in the series of accidents at BP’s installations “about every other year” in the run-up to the largest man-made disaster in April 2010, or in the making of the worst financial crisis ever in 2008.
In their pursuit to identify fragilities in systems, the writers found a common element behind the fall of Lehman Brothers — once a symbol of America’s supremacy over the financial world, triggering the financial crisis in September 2008 and the sudden devastation of Jamaica’s picture post-card coral reef in 1984.
In both cases the systems - otherwise declared robust - lacked diversity. If it was an erosion of marine biological diversity that suddenly stripped Jamaica of its natural resources, the US bankers paid a price for their “tunnel vision”, which focuses on risk management at the individual firm level, ignoring the ‘ecology of finance’. The bankers thought they dispensed risk. They ended up falling prey to that.
The futility of safety ratings became apparent as pension funds investing in best-rated assets met the same fate as investors in so-called risky assets. No one had a clue they were sitting on dynamite. So the bankers declined the last call from the regulator, barely hours before Lehman filed for bankruptcy, to pool the risk and clear the mess.
Many of those, such as Merrill Lynch, who declined the proposal assuming it might help the competition ended up being most affected in the resulting crisis.
In their search for a ‘resilient’ system - one that organises, reorganises, improvises to maintain its integrity in the face of changed circumstances - the writers went through vastly diversified records of calamities, disruptions, volatilities and so on in the fields of ecology, technology, IT, social psychology, animal rights, terrorism, virology, economics and many others.
The result is mind blowing. It is a book that elaborates how the US army is taking lessons from the highly-resilient swarming tactics of al-Qaeda - as was evident in the 26/11 Mumbai attack - in dividing troops into smaller groups, so as to scale up and down according to need.
The fragility of the US electricity grid — once described as the “supreme engineering achievement of the 20th century” — to an overgrown tree branch, and the evolution of a smart grid is highly influenced by swarming tactics.
The authors are not interested in preaching any particular law of success. They take lessons from successful interventions by a young fisheries officer at Palau — an archipelago in Micronesia — who has taken his community into confidence to prevent onslaught on the region’s rich biodiversity.
The reason behind Palau’s success is a relationship built on trust, and translational leadership qualities that kept away from institution-led bureaucratic approach — an element that was missing in World Bank-funded intervention by the Bangladeshi government in resolving arsenic contamination issues.
In a world where focused, species-based wildlife conservation projects (such as Save Tiger or Elephant or Rhino), the researchers are inspired by Willie Smits.
The Dutch scientist who established the Borneo Orangutan Survival Foundation took no time to realise that orangutans cannot survive in isolation from a bio-diversity that is fast vanishing in Indonesia to produce palm oil, touted as a ‘clean’ alternative to fuel power generators in the West.
In this evolving world, Ushahidi - a data crowd-sourcing portal - plays an important role in disaster management. A ‘Farmville’ addict on Facebook offers valuable information on disease outbreak. And, Switzerland beats liquidity crisis by leaning back on its time-tested mutual credit system - WIR - that works as an alternative currency in emergencies.