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What is really important? Three things without which we can expect the collapse of the system –


Two thoughts will help us understand the rest of this tumultuous mess. The first is the core-periphery relationship and the second is a reassessment of what is really important: systemic adaptability, transparency, responsibility, risk, capital and resources. Failures reveal which is the core and which is the periphery, because the core controls the fate of the periphery. In system terminology, the calculated conditions determine the parameters of options and the effectiveness of various choices. The considered conditions of the core are significantly more constructive than the considered conditions of the periphery. From the point of view of the network, critical connections between nodes run through the core. Dependency chains are asymmetric, each node appears stable and independent until it is pushed. Everyone is addicted, but some are less addicted than others. For example, vast tracts of fertile land and freshwater aquifer systems are key assets for growing and transporting food and supplying fresh water. Long borders with potential enemies are a geopolitical liability. These considered conditions set the parameters that must be overcome. There are also parameters set by cultural, social, economic and political systems. Those that support adaptability and transparency are irreplaceable assets, those that hinder adaptability and transparency are liabilities. Another point of the core-periphery model is that there are many dependencies in the global system, but when pressure comes, the core has the means to to overcome the disintegration of global supply chains, but not the periphery. The global shortage reminds us that the means for growing and distributing food, energy and fresh water among huge human populations are really important. Growing/raising food and distributing it on an industrial scale requires huge energy inputs. Even somewhat self-sufficient regions depend on fertilizers derived from hydrocarbon inputs. Water is the most energy-intensive, because it generally requires massive investments in infrastructure, which will cover not only the daily needs of the people, but also the economy and industry. Civilizations that fail to provide their inhabitants with enough food and fresh water collapse. The collapse may be followed by political unrest, but it will soon disintegrate the entire socio-economic system. When we reevaluate what is really important, it turns out that the known percentage of evil will not only be insignificant, but also a huge brake on the system that tries to ensure the essential. Systemic weaknesses in evil, centralized, indisputable hierarchies are revealed. Because of complex systems, they collapse faster
The decision-making methods of successful social systems operate as a network in which all decision-makers in a given sector are also stakeholders in that sector, and decisions are always made on the basis of negotiated agreements. In other words, rigid military-style hierarchies in which decision-makers do not suffer the consequences of their decisions are particularly prone to collapse. Ancient Chinese philosopher Lao Tzu wrote in the Tao Te Ching, “rigidity leads to death, flexibility leads to transition.” In short, a lack of transparency and accountability dooms complex top-down systems to collapse. Black Swan’s Nassim Taleb recently highlighted the critical role of transparency in systemic resilience. He noticed that the more transparent the system seems, the more dysfunctional it is. In other words, when we see all the petty squabbling, the clash of competing interests and the conflicts arising from the representation of interests, we begin to feel that the system is dysfunctional and doomed. But it is a healthy system, because what is at stake is visible for all, as well as a process of all stakeholders negotiating some agreement on how to proceed. Corruption requires dishonesty, behind-the-scenes deals, confidential deals, bribery, etc. None of this can happen in the clear light of transparency, when all important information is available to all interested parties. Clear hierarchical systems appear calm and well-managed because conflicts, vested interests and corruption are hidden. But indisputability and rigid hierarchy are systemic flaws. These systems cannot compete with more transparent, decentralized and adaptable systems in times of crisis. The core of the system’s transition is transparency, responsibility and flexibility. And resources from the real world. This is immutable in scope: it applies equally to households, cities and countries. How many times have we asked: “what happened, they broke up? But they were such a perfect couple.” Really. It’s much easier to hide problems and dysfunctions behind the cheerful facade of being happy. A couple that is open about their situations has a healthy relationship. A couple that hides their dysfunctional lack of communication and inability to find solutions that work for both is creating an unhealthy relationship. This is as true of nations as it is of couples. Systems that are transparent, accountable, and customizable have unmatched selective advantages over indisputable centralized hierarchies. One important aspect of transparency is determining value, which is reflected in cost/price determination. If supply, demand, inputs, friction, insider trading and risk are indisputable – hidden, misrepresented, manipulated – then it cannot even be properly valued. Decisions made on the basis of inaccurate valuations cannot be good decisions. The global reassessment of system adaptability, transparency, risk and resources is accelerating. Those who have the basics of systemic adaptability (decentralized, accountable, antifragile, transparent) thrive and those who lack these essentials collapse. Those who have the means to supply their own food, energy and water (a few essentials) thrive. the ivories on the long strings of dependencies that weave through global rivals do not. A nation that reduces its consumption to an affordable level will survive, and those that try to exceed the limits through financialization will collapse. When there is enough of everything, it is easy to confuse the essential with the unessential. Although it is not essential, it is perceived as valuable. When there is little of what is truly essential, then the essential becomes clear and is valued accordingly. That which is unimportant is valued accordingly. Gold was abundant in the early boom years of the California Gold Rush. oh it wasn’t enough, there were eggs. Will you exchange a cocoa gold for a couple of eggs? It depends on how hungry you are. By Charles Hugh Smith, author of nine books on economics and society. His works are published on many popular financial websites.


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