Saturday, November 12, 2016

COMPLEX SYSTEMS: Want to understand how Trump happened? Study quantum physics
Parag Khanna

U.S. Speaker of the House Ryan shows Melania Trump and U.S. President-elect Donald Trump the Mall in Washington.
How this happened. (Reuters/Joshua Roberts)

The past decade will be remembered as the period when the global underclass revolt snowballed into a movement with political bite. From Occupy Wall Street to Brexit to Donald Trump’s election, these post-financial crisis years have featured many unsynchronized awakenings that are forcing a renegotiation of the terms of governance and globalization. Our politics needs to adjust to these demands. The reverse is impossible.

Could we have seen it coming?

Donald Trump’s election victory is only a shock if you have been looking at the world through simple equations. Classical physics is rooted Newton’s three laws, where an action has an equal reaction, objects at rest tend to stay there, and force equals mass times acceleration. Newton describes the observable world in ways that are logical. But long ago, scientists showed the underlying physical world can’t be explained with algebra. To understand the universe, classical physics had to incorporate quantum mechanics, which describes a micro-world of uncertainty and ambiguity that is harder to measure but defines our true reality. Likewise, as recent geopolitical shocks have proven, outdated methods are no longer capable or sufficient to explain global society’s complex and interconnected systems.

Quantum mechanics’ principles are actually quite clear: Units are difficult to quantify, and they’re in perpetual motion; invisible objects can occupy space; there are no causal certainties, only correlations and probabilities; gravity matters more than location; and meaning is derived relationally rather than from absolutes. Relatively is the rule. Indeed, the principles of quantum mechanics are, when explained in art, quite clear. Take this example:

Michael Frayn’s award-winning play Copenhagen presents multiple versions of what might have transpired when German physicist Werner Heisenberg paid a visit to his Danish mentor Niels Bohr in late 1941. Against the backdrop of an intense arms race between the US and Germany to develop atomic weapons that could determine the outcome of World War II, the two Nobel laureates debated the scientific aspects of nuclear fission and the psychology of nuclear deterrence, seamlessly blending physics and geopolitics in their discourse.

Seventy years later, another Nobel Prize-winning physicist, Leon Cooper of Brown University, began using Frayn’s play as a medium to instruct his undergraduate students. He recruited an ensemble of faculty, including the respected international-relations theorist Thomas Biersteker and a European historian, to co-teach the course. Uniquely, each class featured a live performance of scenes from the play by members of the Trinity Repertory Company of Providence, Rhode Island. Cooper issued a challenge to his students from the outset: “Can you understand the play if you don’t understand the physics?”

Today, in the wake of the Trump win, there is no more important question that we can ask about the emerging world order than this: Can we understand geopolitics if we don’t understand its physics?

Our times are analogous to a century ago, when quantum mechanics shook up the neat rationalism of Newtonian physics. Some of the most profound discoveries in the fields of quantum mechanics and relativity revolutions were Einstein’s theory that photons of light energy can behave as waves and particles at the same time (wave-particle duality) and Heisenberg’s insight that we can only accurately know the position or velocity of a particle accurately, but not both at the same time (the uncertainty principle). Recent quantum experiments imply that time itself is the result of the entanglement of particles that temporally share the same existence, even though they are different units. Sound confusing? As theoretical physicist Freeman Dyson once put it, “The difference between classical and quantum physics is that quantum physics is weird.”

Geopolitical thinking, which is still governed by an antiquated, Newtonian logic, should be looked at through a quantum mechanics lens. Currently, it remains anchored in the writings of the 17th century philosopher Thomas Hobbes, who saw the world as functioning according to fairly simple mechanical laws. The control over territory trumps all else. When forces collide, one must give way. This is hardly the way to understand our increasingly complex world. It is time for geopolitics to evolve toward a framework capable of grappling simultaneously with accumulating forces beyond 17th-century sovereignty, such as 18th-century enlightenment, 19th-century imperialism, 20th-century capitalism, and 21st-century technology.

The century of complexity

Stephen Hawking recently remarked that, “The 21st century will be the century of complexity.” Indeed, the physics of classical geopolitics are being superseded by the physics of complexity. The combination of late-20th-century economic integration, the end of the Cold War, the entry of China, the former Soviet Union, and India into the global economy, increased labor and capital mobility, rapid population growth, the surging demand for African, Latin America, and Middle Eastern commodities, and technological explosion has propelled the world system towards unprecedented complexity. The ancient world of disjointed empires gave way to the disorderly medieval world, followed by the modern order of sovereign states, and now the transition to a global network civilization.

We have never lived in a multipolar, multi-civilizational order without a hegemon, and in which so much of what is “us” is made by “them” and vice-versa, and where powerful cities, companies and other autonomous and mobile groups pursue their own agendas. Indeed, the most fundamental attribute of today’s global system is not the shift from unipolarity to multipolarity (structural change), but rather the shift from a state-centric order to a multi-actor arena (systems change).

Structural change happens every few decades; systems change only every few centuries. Structural change makes the world complicated; systems change makes it complex. International relations among states are complicated, while today’s network global civilization is complex. There is an order of magnitude difference in complexity between hierarchy shifting from one superpower to multiple powers (such as the Cold War) versus today’s system that is constantly reconstructing itself with diverse authorities and networks, with feedback loops across micro and macro scales.

Recent headlines, like Brexit and Trump, have been dominated by stories that require us to trace intangible butterfly effects to fully understand. For example, one of the triggers of the Arab Spring that exploded in early 2011 was the spike in food prices in Egypt and Tunisia. The countries’ main source of wheat imports was Russia, where a drought six months earlier forced Moscow to ban exports for the first time ever. (America’s ethanol-subsidies and global-commodities market speculation also played key roles, not to mention the countries themselves crossing the tipping point of intolerable political and social stagnation.)

As Arab states (especially Syria) collapsed, the refugee surge into Europe deepened a political crisis over migration that tipped the UK’s Brexit vote by just enough percentage points to bring about the most unexpected outcome. And the isolationist populism shared by British midlanders and America’s nativist Trump supporters traces back to the stagnation of incomes resulting from the globalization of industry and finance. And America’s past three decades of trade deficits with China pushed trillions of dollars of capital offshore that effectively subsidized China’s new mercantilism worldwide. The individual acts of outsourcing manufacturing to China and buying more goods from China were not intended to finance African infrastructure and remap its geopolitical loyalties—but they have.

Connectivity is the main causes of this complexity. One of the most important quantum insights is that the nature of change itself changes. We are living through such a “change in change.” Worldwide connectivity in all its forms—transportation, energy, communications—is the change emerging from within the system that ultimately changes the system itself. Globalization rests on and exploits this connectivity, with flows of people, goods, money, data, and ideas reaching spectacular intensity. Globalization does not simply carry on within the existing order but forges a new one. We all understand that globalization has magnified interdependence (the intensity of relations), but we understand far less how it has made the world more complex (the natureof relations). Interdependence is not new in world history—complexity is. In interdependence, outcomes can be predicted; in complexity, they cannot.

Complexity makes a mockery of linear projections. It made a mockery of Hillary Clinton’s projected win. Forecasting the GDP growth of oil-dependent economies proved to be a big mistake as commodities prices suddenly collapsed in 2014. Similarly, valuing tech companies based on projected future earnings belies the reality of new rivals’ business models or disruptive technologies suddenly making them worthless. In a complex world, chaos is the new normal; we are all price takers.

A complexity approach to understanding the world captures the growing number of unpredictable chain reactions. When the US invaded Afghanistan in 2001 and Iraq in 2003, many foresaw a new global American imperium. A decade later, pundits worried more about isolationism than imperialism. Crude cell-phone-detonated IEDs caused more than half the casualties of US troops in both Iraq and Afghanistan, generating an estimated $1 trillion in unfolding medical costs for the rehabilitation of tens of thousands of maimed veterans—but also spawning what is sure to be a combined trillion-dollar industry in prosthetics, exoskeletons and psycho-pharmacology. Furthermore, even as president Obama intended to fully withdraw forces from Iraq and Afghanistan, the rise of ISIS stemming from the toppling of Saddam Hussein has provoked him to send troops back in. Indirect feedback loops produce unanticipated outcomes.

As a result, policymakers have lost the ability to sustain decisions. Consider how the Federal Reserve’s forward guidance is consistently vague about raising interest rates, weakening confidence in its ability to nudge markets. Investors are left to cope with what has been called “volatile volatility.” Furthermore, the Fed now clearly considers the impact of its decisions on foreign markets even though this is not part of its official mandate. After all, raising rates now and stunting growth abroad could have a boomerang effect. And contrary to the Fed’s goal to gradually raise rates, if China decides to sell off large portions of its Treasury holdings to meet domestic obligations, the US would be forced to return to monetary easing again.

No superpower is robust enough to stand outside the system. It is telling that in the National Intelligence Council’s Global Trends 2030report, the United States world role was modified from previous editions: No longer a predictable stabilizer, the US itself is flagged as an uncertain variable. How much power will America have in 2030? Will it have its domestic house in order? What will the legacy of president Trump be? Will America still be capable of projecting power worldwide? None of these issues can be taken for granted—for America does not fully control its own fate.

Not only does geography no longer guarantee security from terrorism, but cyber-attacks, financial volatility, climate change, and even Donald Trump’s populist politics are all now part of American geopolitical risk analysis. In 2012, then director of national intelligence James Clapper testified before the US Senate that the combination of traditional and newer threats makes it “virtually impossible to rank in order of importance the threats to US national security.” With his background blending history and physics, current secretary of defense Ashton Carter might be the right guy to evolve the heavy Newtonian bureaucracy of the Pentagon. But his term is almost up.

Free agent complexity

Small and large-scale phenomena are deeply connected in complex systems. Just as electrons can suddenly experience “quantum leaps” in their energy state, tiny animal mutations can rapidly morph into global pandemics such as the H5N1 Bird Flu, normal stock market trading activity can be tipped into a massive and instantaneous downward spiral such as the 2010 “Flash Crash,” and terrorist groups such as Al Qaeda or hacker collectives such as Wikileaks can appear dormant until the moment they launch a major attack. ISIS affiliates can strike in Paris and form alliances with Boko Haram in Nigeria while being bombarded by NATO on its home turf.

Reality is far too complex to lump such free agents into generic categories such as “non-state actors” as if they represent a cohesive set of interests. The fact that the Gates Foundation and ISIS are not sovereign nations doesn’t mean they have much else in common. Wikileaks can be both enemy and ally as it dumps sensitive government and corporate data in the public domain while also declaring war on ISIS. There are no rigid communities. These actors are better captured by the mathematical notion of “fuzzy sets” in which there are variable grades of memberships in different domains.

Complexity elides rigid distinctions between subject and object; ideas and matter are connected. As Niels Bohr wrote, “We are ourselves both actors and spectators in the drama of existence.” Nobody is a detached observer—not even media or academia. Great humanities scholars such as Harvard’s William James already thought in quantum terms over a century ago. His radical empiricism posited that we cannot objectively analyze the human condition outside of the diverse and meaningful connections that imbue it. John Dewey similarly argued against tidy divides between the mental and physical, even if those categories help us to explain things. Some degree of uncertainty is both acceptable and even crucial to progress.

If international relations has an equivalent to William James, it is Alexander Wendt of Ohio State University, who argues that we only treat states “as if” they are real, but in fact they are administrative spaces that lack agency of their own. Instead of the tautology of statist theory—if it does not have borders, then it does not count—it is precisely ‘the state’ that we do not see.

We can see manifestations of government such as armies, presidencies, policemen, and post offices, but we cannot ‘see’ states—hence Wendt describes them as ghosts. Columbia University professor Charles Tilly used to liken states to organized criminal syndicates that collect taxes to fund protective operations (sometimes legitimized by a veneer of democracy). States have no immutable essence. They are a contingent, negotiated spaces once designed to contain and demarcate, but now administratively redefined to manage connections with neighbors and beyond.

Geopolitics is about the relationship between power and space, plain and simple. It is equally concerned with the geography of power (its distribution across space) and the power of geography (the significance of place). Geopolitics is agnostic about who controls space—it does not care if it is a state, empire, city, nation, tribe, terrorist group, corporate supply supply chain or cyber army. Consider that more than one hundred countries in the world (more than half the total) together represent only 3% of world GDP. They are basically small and relatively poor cities surrounded by variously sized hinterlands. Most states thus resemble atoms: The nucleus (capital) represents a small fraction of the atom’s (state) size but almost all the mass (weight). A large number of transnational companies, whether Google or Glencore, can be more systemically relevant than most countries. While it is true that we live in a world of states, the far more profound fact is that states exist in a complex world.

The movement of people across borders represents the most profound challenge to traditional conceptions of what states are and mean. There are more migrants than ever in history: More than 300 million people are “expats” living outside their country of origin. For all the nativist uproar in Western countries today, the truth is that nationalism as an ethnic rallying cry simply won’t unwind these same countries’ expansive immigration policies of recent decades. In a world of mass migrations and racial dilution, nationalism is not an unshakeable force but one competitor in the marketplace of identity. Just watch as the number of American expats surges in the coming years: When Trump was elected, Canada’s immigration website crashed.

Citizens may rightly be proud of their country, but that does not mean it is their sole form of belonging. People can be more loyal to cities and supply chains than nations, value credit cards and digital currencies over citizenship, and seek community in cyberspace as much or more than country. (And for billions of poor people lacking formal identity, a mobile phone number becomes their first legal contract—and yet it is a quantum identity as individuals regularly change phone numbers to arbitrage telecom providers for the best rates.)

As John Arquilla, an expert on emerging patterns of warfare at the Naval Postgraduate School has observed, such network groups are now taking on nations the way nations took on empires. They draw their strength from compelling narratives and use technologies to build cohesion. A micro-blog is not just a communications medium, but the seed of a virtual community of belonging that challenges government writ and state identity. Wikileaks founder Julian Assange argues that the internet enables connected groups to anneal into empowered collectives than can act on their principles and define themselves by what they do rather than where they are.

Flow and friction

When investigating the growing number of stateless corporations, where the company is becomes a quantum question. Try asking a consultant from Accenture or delivery agent from DHL where the company “is” and see what answer you get. Usually a blank stare. Congressional proposals such as taxing companies based on the location of their “headquarters” or attempting to apportion revenues according to jurisdiction seem stuck in the quaint 20th century of territorially rooted multinationals rather than 21st century “metanationals” (the term coined by INSEAD professor Yves Doz to describe such companies).

Stateless superpowers view the world not in terms of nations and borders but supply and demand. The most powerful law of economics—supply and demand—itself corresponds to a conceptual dynamic from physics: Flow and friction. Solids, liquids, and gases experience flow and friction when moving in the open or in contained spaces. In fluid mechanics, friction takes the form of viscosity, meaning a material’s resistance to changing its form. Flow and friction govern the ability of supply to meet demand.

There are many kinds of flows in our connected global system: resources, goods, capital, technology, people, data, and ideas. And there are many kinds of friction: borders, conflict, sanctions, distance, and regulation. Flows are how we distribute the great energy of our ecosystem and civilization—whether raw materials, technologies, manpower, or knowledge—and put them to work across the planet. Frictions are the barriers, obstacles, and breakdowns that get in the way such as wars, plagues, de- pressions and protectionism. In the long run, as Duke University mathematician Adrian Bejan argues in his beautiful study Design in Nature, flow wins out over friction. Supply connects to demand. Momentum triumphs over inertia.

We live in such a flow-friction world in which global supply chains that are reorganizing our geography away from simple political states and borders towards functional connective infrastructures. But supply chains are not things in themselves; they are transactions that confer weight on those that participate in them. Amassing and facilitating transactions is how power is built, whether by countries or companies. China in the 1970s was an over-populated peasant society. Within one generation it became the epicenter of the world’s manufacturing supply chains. Attracting these commercial flows is what made China a superpower, not nuclear weapons.

Searching for patterns

Quantum physics is hardly a perfect analogy of world politics, but it is superior to the overly simplistic theories that have dominated international relations for decades. Mathematicians and biologists are far more comfortable with the reality of indeterminate complexity than social scientists; they have accepted that we live in a system of complex systems—politics, economic, geophysical—that constantly intersect, modify, disrupt, and amplify each other. For example, the earthquake and subsequent tsunami that struck Japan’s Fukushima reactor in 2011 led the country to abandon its plans to generate half its power supply from nuclear sources by 2030. Germany followed suit, vowing to dismantle its entire nuclear power industry. But energy, like economics, is no longer national: Germany now imports electricity from French nuclear reactors.

The virtue of complexity theory is that it is the one approach that doesn’t attempt to predict itself, but instead looks for patterns. Our world has become a stochastic, fractal system in which there are patterns but not repetition. British mathematician Stephen Wolfram has explained how in complex systems things follow orders even if they do not result in order. Such systems are polycentric and lack central authority: The system cannot be forced to act a certain way. Equilibrium is impossible—any attempt to unwind complexity wouldn’t work; it would simply reinforce the feedback-loop nature of the system and take it in new directions. Without appreciating this capacity for mutation, we would never have deep change in our social structures at all; the past would always dictate the present. It is better to appreciate the complexity of complexity than to create false simplifications.

Rather than treating complexity as an exception to rigid rules, we now have an approach in which everything sensibly fits. States and supply chains can be seen as invisible matter than occupy space—the difference being that states are divided from each other while supply chains connect diverse agents (including states). Data packets are like particles in perpetual motion, appearing in multiple places at the same time. Financial crises are a quantum leap in the energy state of market volatility. Capital, knowledge and identity coalesce in stateless terrorist or hacker groups. Good theory provides a home for all such divergent facts to comfortably rest.
“Predictions can be very difficult, especially about the future,” said Niels Bohr. And yet complexity should not lead us to postmodern despair but to alert pragmatism. In a complex system, leaders have little choice but to be open-ended in their decision-making, perpetually adapting to changing circumstances. In the new global physics, complexity rules.

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