Need, Speed, and Greed

6

Black Swan Kills Sitting Duck

Mankind is entering an age in which the danger posed by highly unlikely but devastating events can no longer be ignored. One sort of risk arises from catastrophes such as the BP oil spill in the Gulf of Mexico, the massive earthquakes in Japan and Haiti, and other recent deadly events. As society has advanced, the costs of such disasters have grown exponentially. But there is an even greater worry, as the subprime-mortgage-induced financial meltdown and Icelandic-volcano-induced global chaos demonstrate. The dramatic increase in the complexity of industrial, financial, and economic networks means that extremely rare localized crises can unexpectedly and rapidly cascade into systemic risks that expose the unknown ...