The Age Of No Compromise
Complexity drives conflicts
In a world of rising complexity, there is little room for compromise. Complexity primarily increases due to using advanced technologies, such as smart phones and artificial intelligence, but also developing new weapons, such as drones and supersonic missiles. Human behavioral adaptation tends to lag behind technological progress in some major and disturbing ways. The overwhelming majority of humans are users of technology and have little or no understanding, save for a possible misunderstanding, of the risks humanity faces from its irresponsible use. Everyone is trying to maximize their utility function without considering the possibility that this may also maximize collective risks. Is the world progressing toward a state of chaos?
In December 2018, I was invited to speak at the M4 conference in New York City. My presentation was on reflexivity and financial market forecasting. I have the link to the presentation slides at the end of the article. I presented a basic mathematical model of complexity and discussed how the curse of dimensionality leads to no compromise and extreme solutions (slides 27–32). The conclusion was that, under high complexity, ruin becomes certain. But you do not need to be a rocket scientist to figure that out: high complexity increases the fragility of the system and the probability that a single point of failure could cause a domino effect. We already experienced that during the Great Financial Crisis. The solution was to “flood the system with money.”
“Flooding the system with money” was an irresponsible short-term remedy that did not deal with the root of the problem, which was rising complexity, and in this particular case, that of financial products such as MBS and CDS, as well as the rampant and uncontrollable globalization that solved some problems but created many more, even worse. Specifically, globalization solved the US problem of exporting inflation but at the severe cost of turning China into a superpower. Now, we have reached the unthinkable point of talking about a direct military confrontation with China. In hindsight, the cost of not exporting inflation and maintaining the manufacturing base in the USA would have been significantly lower than the current situation we are faced with. At the same time, the drive to cause a brain drain from Russia that benefited mostly the financial services industry, with physicists and mathematicians flooding Wall Street, might have also opened the door to the transfer of key military technology to Russia and enabled them to develop advanced nuclear weapons. The fast transition of Russia from a low-grade weapons power to a high-tech arsenal can only be justified in the context of some transfer of technology. We now face the consequences of the drive to maximize short-term gains by increasing complexity while inevitably maximizing the long-term risk of ruin.
The age of no compromise is a direct consequence of technological complexity in every aspect of human life. Young people now wonder how people lived 20 years ago without smart phones, but thousands of years ago, people created wonders without even electricity. Isaac Newton wrote the Principia with a quill under candlelight. There has been no fundamental progress in this century other than an uncontrollable drive to pack more transistors into chips and increase processing power. This creates higher complexity, which leads to more extremes and no compromise. Technology offers a sense of superiority but has also been the driving force behind large-scale industrial wars.
In a nutshell, no compromise states arise due to the disturbing result in mathematics of the hyper-surface area tending to zero as the number of dimensions increases. At about 20 dimensions, nearly all the volume of the hypersphere is concentrated at the edges of an inscribed hypercube. There are no solutions except for extreme values. Two extreme solutions are no immigration (far right) or open borders (far left). Another example of extreme solutions is no nuclear energy for power or 100% nuclear energy for power. When it comes to social policies, we see in some countries no compromise positions, for example, free health care versus no free health care or free education versus private education. Or, as a very extreme no-compromise position, no sentencing for burglars (far left) or heavy sentences for burglars (far right). As complexity increases, the few voices remaining that suggest a compromise tend to select extremes. The ultimate extremes are no war versus an all-out war. All disputing parties have recently adopted this position of no compromise. Due to complexity, there is no room for compromise. Of course, there have been similar decisions in the past in a lower-complexity world, but there were no risks of total annihilation and it is this that makes higher complexity an ominous development. Everyone thinks they have the technology to prevail, so why compromise at all? The Chinese think they have the technology to prevail in a war with Taiwan, the Russians think they can prevail in a war with Ukraine, and the USA thinks it can dominate in a war with them. Why compromising?
In the past, when battles ended with 80% or 90% of the army dead, opponents compromised because there was no way to continue fighting. Nowadays, with drones and ballistic missiles, few see reasons for a compromise. As the technology gets more advanced, with autonomous robots joining the armies, the situation will get worse. When “no compromise” becomes the doctrine, ruin becomes more certain. Is this dynamic reversible?
We need a miracle that will force a compromise.