A very interesting draft of an article by Sornette and Cauweis looks at examples of how incremental changes can lead to dramatic shifts as systemic collapse is precipitated by seemingly small events.  The literature on punctuated equilibria is long while the popular argument in Gladwell’s tipping point and the butterfly effect in chaos theory hypothesise on what happens to systems at a critical juncture.

I liked their examples from literature, history and finance.  Peripety (περιπετεια in Greek) is a sudden reversal of fortune in Greek drama that works side by side with discovery.  Chernobyl, according to Gorbachev, undermined the authority of the Soviet elites and brought about the unexpected collapse of state legitimacy. Food price spikes precipitated the Arab Spring revolts and could better predict the propensity for unrest than sophisticated models of democratic demand for change.  Small events that might seem unrelated can transform a system.

All possible future scenarios offered by the two authors are stark.  Our socioeconomic system will collapse under the endogenous pressures of inequality, mismanagement and scarce resources. Or collapse will follow the exogenous pressures from the macro-economic fundamentals (i.e. unsustainable debt) or the inherent contradictions of unbridled growth in Asia.

My first naive observation is that claiming an understanding of the dynamics of inherently complex systems is precarious when based on assumptions of linear causality that patently does not apply.  Prediction lies beyond our current capacity of understanding and analysing complexity.  My second naive observation is that nature (and human ecologies) tend to equilibrium.  Catastrophic disequilibrium is not the norm.  System resilience reflects the ability of systems to sustain regeneration from failure.  I therefore infer that systemic level adjustment shocks do not necessarily precipitate systemic level failure.  Although I do accept the authors conclusion that it is highly likely that a new equilibrium can be determined by a path dependent new state, from which previous equilibria are beyond reach.  For instance, beyond a level of deforestation the forest ecosystem cannot regenerate.

The “creep” thesis is not as clearly demonstrated, while there is lack of the coherence one expects in academic papers.  An interesting and thought provoking paper nevertheless, with a number of original research projects backing-up many of the authors claims.