written by Karl Wagner, Director of External Relations at the International Centre of the Club of Rome
The term resilience has popped up increasingly over the last year or so. Its modern use originates from the climate debate, where it characterises the ability of a system to adapt to the changes brought about by global warming.
In a more general sense resilience is the ability of a system to remain within certain boundaries, despite fluctuations caused by external forces. It is a synonym for the capacity to buffer against outside attack, and a necessary characteristic of any kind of system. Carbonate-buffered lakes, for example, could in the 80s withstand the acidification caused by acid rain, while the soft-water lakes of Southern Sweden turned acidic and devoid of higher life forms.
Our world consists of many different interconnected systems: natural systems, social systems, financial systems, economic systems, industrial systems and many others.
When the financial system nearly collapsed we witnessed what it means when a global system does not have an inbuilt resilience to act as a buffer against fluctuations. The financial system had to be rescued at the expense of the resilience of the economic system and of the individuals concerned (losing savings means losing resilience against sickness and injury) and of (mostly small) companies.
The effect of the crash of the financial system sent a tidal wave through the entire world, which also affected larger companies: in 2008, the CEOs of two of the three big US carmakers, General Motors and Chrysler, went to Washington to ask for financial help as their companies nearly went bankrupt. And, oh wonder, the CEO of Ford, the third large US carmaker accompanied them and pleaded with the President on behalf of a bail-out of his competitors, nicely documented in Barry C. Lynn’s wonderful book “Cornered- The New Monopoly Capitalism and the Economics of Destruction“.
Lynn was baffled: he had been brought up believing that Ford would be delighted when its competitors went broke. But what had happened was, that the car industry had become horizontally integrated, so all car makers are buying their parts from the same suppliers and if two large carmakers go out of business, so will the supply industry and with it the third carmaker.
Lynn searched further and found that this “monopolisation” has taken place in most of industry over the last 10-15 years, mainly through mergers and acquisitions, and largely unnoticed by those not familiar with a specific industrial sector. This has resulted in industrial playing fields dominated on each level by a very small group of companies. This trend, which industry and the financial sector are so proud of, has reduced diversity on all levels of production and trade, and with it the resilience of the effected industrial systems. This has created a situation, whereby all increasingly stand and fall as one, as we have seen in the world of finance.
The same probably takes place in social systems. Once community life has been hollowed out through an onslaught of essentially egoistic values, it is prone to crash and when it crashes, crime rates, distrust and human misery grow. Monopolisation and centralisation have the same effect: If we all heat using Russian gas, then what happens in Russia can lead to cold homes in Europe. On the other hand, a decentralised energy system would act as a buffer against any kind of event. It would make our energy system resilient.
We are probably looking at a potentially very dangerous, and up to now, largely unrecognised, phenomenon: humanity’s “modern” way of dealing with systems in general results in a continuous reduction in the ability to buffer against even odd and unusual combinations of events, raising the probability of global crashes, which affect entire systems worldwide.
Earth was a wonderfully complex world before humans became the master species. It seems that this master species is in the process of shooting itself in the foot by replacing complexity, which guarantees stability, with simplicity and complication, which result in instability.
