The point about yesterday’s piece was not so much about radiation and bombs, but the fragility of our society.
In the interconnectedness of our world, people and places have become specialized. Transportation and manufacturing and finance have their centers and are concentrated at places like Rotterdam and Shanghai and New York. Even more, the world has developed a ‘hand to mouth’ strategy for success.
Instead of building slowly and developing clients and products over the course of years, companies compete with each other in how fast they can dominate new markets and new client populations. They buy companies and spend heavily on advertising. Subsequently, they take on massive amounts of debt to financeÂ business strategies that are marginal, at best.
Unfortunately, lenders tend to be nervous people. When things go bad, they stop lending to companies that are going bad. They call in loans. They raise interest rates. They stop returning phone calls.
So, when a marginal business strategyÂ doesn’t meet itsÂ profit target,Â an otherwiseÂ successful company suddenly needs more money to fundÂ operations so that it can climb out ofÂ the hole that it dug for itself.Â But, that is precisely the time when a company is least able taoÂ obtain the extra money that it needs. And if the company is successful in obtaining another loan… well, the more debt a company takes on, the moreÂ a company depends on the world operating smoothly, so that it can reachÂ profit targets, meetÂ loan payments,Â and satisfy creditors.
And my friends, there isÂ lots of debt out there, lots and lots.
Now, think about what happens when you disrupt a key area that mustÂ run smoothly. Disrupt transportationÂ for a week and products aren’t delivered and deals are lost and companies go under. Disrupt communications for a week and customers can’t talk to suppliers, whichÂ means that deals are lost and companies go under. Disrupt manufacturing for a week and products aren’t assembled on time, which means that deals are lost and companies go under.
Then, add to this the interdependence of companies. When one company disappears, often a host of companies disappear with it.
It’s all one big ripple effect, and there are some pretty ripple possibilities out there.
AsÂ our societies become more and more specialized and centralized, we like toÂ concentrate aspects of our society. London, New York,Â Hong Kong, and Tokyo are our banking centers. Singapore, Shanghai, South Louisiana, and RotterdamÂ are ourÂ shipping centers. Shenzhen,Â Seoul,Â Taipei and Kuala Lumpur are high tech manufacturing centers. The worlds busiest airports areÂ in Atlanta, Chicago, London, Tokyo, and Los Angeles, and you know how easy it is to shut down an airport.
Shut down these centers all at once and the ripple effect becomes a tsunami.
Our vulnerability to a worldwide economic tsunami increases every day, and highly educated terroristsÂ like Osama bin Laden understand this.