As I watched the news from Egypt, I searched the media for a pronouncement from some self-absorbed pundit asserting that he/she told us so. "Dr. Doom" (Nouriel Roubini) made this strategy famous when in 2006 he correctly predicted the Great Recession. It made him the darling of the media despite repeated subsequent misses.
This current political shocker demonstrates a cultural prediction problem. Although it has always been impossible to accurately and consistently predict, our global interconnectedness now multiplies both the range of possibilities and number of random factors.
Unfortunately, we are hardwired to believe in foreknowledge, even to the point of self-deception. What might be more useful is to contemplate a handful of fundamentally disruptive events—regardless of the probability—and envision the consequences.
Here are a few things that would have an enormous impact on my life. I assign no odds of their occurring; I simply note what might happen.
Cancer Vaccines. Following the breakthrough in cervical cancer, suppose we discover vaccine therapies for other cancers. Greatly decreasing cancer mortality would shine more light on remaining health threats, especially heart disease. This would shift public anxiety more toward obesity and dietary choices and away from tenuous links between the environment and cancer. In turn, the protein sector would have to react, along with grain farmers.
A Really, Really Good Battery. (Not my idea—I stole this one.) The huge problem with alternate energy sources, such as solar and wind, is the difficulty in synchronizing supply and demand. If we could bury a hyper-efficient battery at the base of every turbine and solar farm, we could diminish the need for backup capacity and explode the utilization of such energy sources. Wind turbines would be more conspicuous when missing in rural America. Interestingly, this goal could be partially achieved with millions of electric cars.
Point Source Determination. Imagine that an Environmental Protection Agency inspector arrives at my door to announce that my farm is being audited for runoff/pollution. A solution containing an isotopic or genetic marker unique to my farm is sprayed on 10 acres. Later, water samples taken on the Wabash River indicate a higher marker presence than average for my farm parameters. Like red-light cameras, the technology pinpoints culpability.
Investment in conservation would skyrocket and cultural practices would realign overnight as accountability arrives. Competent operators could enjoy a commanding competitive advantage. The returns to labor and capital would be rebalanced as landowners who want their land to be farmed are suddenly in need of a scarce skill and bid for talent.
A Short 2011 Corn Crop. I’ve been asking market experts and economists what would happen if there was a 12 billion bushel corn crop this year. This would be a poor but not catastrophic yield. It is clear from their answers that it doesn’t have to be a 1988 event to cause enormous collateral damage. The consensus is that ethanol production would be halted, or at least face more realistic market forces. More detrimental from my perspective is a loss of consumer confidence in the farm sector. More Americans would question the abundance of our food supply, regardless of advocacy campaigns. Foreign buyers would intensify their scramble for alternative supply chains.
This sort of exercise may be worthwhile, given the bevy of Black Swans we’re encountering. More game-changers might be linked to surprising human actions, such as the Egyptian uprising. Time "wasted" imagining new possibilities can enable us to react slightly faster than others. In today’s global economy, the rewards for first movers are often disproportionately large. Perhaps even our fusty old profession has a future for dreamers.
- March 2011