ConDems and the Black Swan

Many commentators, especially Labour politicians, are surprised, even shocked, by the speed and aggressiveness with which the ConDems are ‘dismantling’ the government and social support institutions/structures that have metastasised under the last government. Why are they doing this when on the face of it, it is in their (employment) interest to keep these structures in place and change at a slower more evolutionary pace?

Various public arguments and justifications are put forward by Cameron etal the main one being  the ostensibly urgent ‘reduction of the deficit’ to avoid the financial consequences of being thought of by ‘investors’ as a ‘Greek Economy’. Another (more private) is that they are taking these actions now at the start  of their period in office because it will be impossible to do when the coalition starts to fragment and Labour get their Opposition act together (as they might).

However, this is only the public rationale. My guess is that they are terrified of another highly improbable unpredictable  ‘unknown unknown’  event – known as a Black Swan . The actions they are taking, quite rightly in my view, are to mitigate the effects of a Black Swan financial (or health) outlier and raise the preparedness of society for when it hits – as it assuredly will (or may not). For once, this shows intelligence on the part of the leadership of the UK government  – it demonstrates that their strategic thinking may have moved beyond ‘Thatcherism’ into Nassim N Taleb‘s fractally (dis)organised econoscape of Extremistan.

This is important because past governments have been incapable of conceptualising and are ill equipped to deal with, financial crashes of 1989, 2008, bird flu, swine flu, bad weather , Iraq war, Afghanistan war and many of the other Black Swan events that have befallen us over the last century. Gordon Brown with his ‘no more boom and bust’ speech illustrates perfectly why past Labour economic theory and strategy has been wrong footed at every turn by reality and events. The ConDems are taking action to avoid being blamed for these things (in the future) by drastically reducing the role and scope of activities of government. They are ‘passing the buck’ back to  Nature, God or ‘people’ in their localities. On one level this seems sensible to me but it will be a very ‘rough ride’ especially for the disadvantaged and unprepared of our society and especially for us in Wales where there will be disproportionate effects. On a political level it is very likely that we will see a speed up in the rate and scope of Devolution. The ConDems want to ‘get rid’ asap so that in future it will be the WAG that will ‘take the blame’ for Black Swans.