Monday, 14 July 2014

Preparing for the Zombie Apocalypse

Recently I've been thinking about what to do if things went very, very wrong in the world. We're talking Zombie Apocalypse levels of havoc here. A mentor of mine questioned me on that this morning, asking whether it was healthy for me to have such dark thoughts. After reflecting on it, I stand firm in my belief that preparing for a doomsday scenario is a healthy thing.

Essentially it comes down to an attitude I have towards life that developed during my Environmental Science degree. At uni, we were taught about the Precautionary Principle. The essence of the principle is that if there is some evidence, even if incomplete, that a catastrophic event will occur, it is a moral imperative to act to avert the worst case scenario from occurring. In the uni setting, the argument was generally applied to climate change. The rationale was that even though scientists are not 100% certain that anthropogenic greenhouse gas emissions will cause dangerous climate change, there is sufficient evidence to suggest that if it did happen, the effects would be catastrophic and irreversible. Therefore we should act to lower carbon emissions rather than having faith that some benevolent higher power (e.g. solar roadways) will rescue us. I now try to apply the Precautionary Principle to everything. 

Fast Collapse vs Slow Collapse
What I'm concerned about right now is two things: fast collapse and slow collapse. In a fast collapse scenario, the world goes to shit in a matter of days. This is a Hurricane Catrina/Zombie Apocalypse scenario where law and order self-destructs, supermarkets get looted and power and water go out. The probable cause in Australia would be a natural disaster, e.g. bushfire/solar flare/cyclone.

A slow collapse takes longer to happen but the impacts are no less profound for those who have not prepared. The picture here is of Greece and Spain in recent years: massive unemployment and an economy that just won't restart no matter how many times the government zaps the economy with a defibrillator. As the most debt laden become unable to pay their bills, this flows on to the rest of the economy until no-one is able to continue in the status quo. Interest rates spike and purchasing power falls because few people have access to cash. Affording basic necessities like groceries and petrol becomes extremely difficult. Even highly educated people are unable to keep their jobs. Banks set withdrawal limits and people default on their loans and lose their homes. Right now it's occurring in isolated countries and bail outs are still a possibility but what would happen if the US went down? For people with cash reserves who are relatively self sufficient in terms of food and water, it's not tremendously painful but people who are up to their eyeballs in debt, who don't have close ties with their neighbours (because driving will be difficult with the lack of cheap fuel) and who aren't psychologically ready will be in a world of pain.

How likely is a collapse?
In terms of the likelihood of societal collapse, I'll draw out a few statistics:

1. Solar mass ejections (solar flares that pump out as much as energy as billions of hydrogen bombs exploding simultaneously) happen relatively regularly and could potentially knock out the entire power grid (reference). A recent flare in 1989 blacked out the grid in Quebec (albeit only for 9 hrs). In 1859, a massive coronal mass ejection melted telegraph lines, disrupting communication for months and even 'switched on' devices that were turned off at the wall. Were we to have a similar event today in a world that is far more heavily reliant on electronics, it would potentially cause trillions of dollars and a global blackout that lasted weeks (reference).

2. Peak oil could lead to a global market crash as early as 2015 once oil prices spike and cause rapid inflation. (The Guardian)

3. The US debt pyramid will likely collapse by 2017 (The Guardian) leading to a global economic slowdown and widespread unemployment.

4. Uncontrolled climate change would slowly strangle the economy due to property loss from coastal inundation, damage from more storms, more droughts and more bushfires, higher healthcare costs due to heat injury and frequent brown outs (insatiable demand for air con on hot days) - (source: Australian Government Department of the Environment)

Sure it's not 100% certain that peak oil/the US debt pyramid/climate change/solar flares will cause a global financial collapse. I would love it if in twenty years time, China was still buying US bonds fresh off the printing press, every road was covered in solar panels powering affordable electric vehicles and the grid was made impervious to even the strongest solar flare.

However, just as one buys insurance and takes countermeasures against a house fire, so too do I want to prepare for both the best case scenario (the status quo of economic growth continues) and the worst case scenario (peak oil spikes inflation and shuts down the economy over the course of 24 months or a solar flare knocks out the electricity networks and paralyses society).

Preparing for a collapse
The measures I'm taking are:
Slow collapse measures
- earning more money so I can build up savings and pay off debt
- building connections with my neighbours and local community so that we can help each other out if a collapse occurs
- learning to garden so that I could grow my own food if the supply chain collapses/food gets hyper expensive

Fast collapse measures
- preparing a Go-Bag with the necessary provisions and staying fit to get the hell out of a dangerous urban environment in the event of a collapse
- stockpiling food and water in case the supply chain collapses
- learning self defense skills in case there is a breakdown of law and order in a fast collapse

Can negative thinking create a collapse?
One thing that does dissuade me slightly is the idea that my negative thoughts could create the very situation I am worried about. I was just speaking to someone about my fear and she was telling me about a friend who was obsessed with cancer and ended up developing cancer herself. In medical terms, this is the 'nocebo effect'. Think about the side effects of a drug and you'll develop them, even if you actually swallowed a sugar pill.

Outside the medical scene, negative thinking could potentially create a collapse by eroding consumer confidence. If enough people got worried about a collapse, there might be a run on the banks and a firesale on the stock market that would indeed manifest a collapse. However, given the cult of optimism around, I don't think this is very likely.

What is perhaps more likely is that all this thinking about bad shit going down might make me depressed. When I talk about my concerns with most people, they get worried. But the thing is, I don't feel depressed as long as I'm taking action and thus feel like I have some control over the situation.

Is thinking negatively a bad thing?
Research on defensive pessimism shows that it is an effective motivational strategy that generates results that are just as good as coming up with positive expectations (here's a paper from an Education research journal). Defensive pessimism works well in business too. One of the hallmarks of the '10x' companies (companies that outperformed the market 10x) in Jim Collin's book "Great by choice" was that the 10x companies demonstrated 'productive paranoia' whereas the underperformers had a 'she'll be right' mentality and ended up blindsided by predictable but un-forecastable negative events (e.g. the GFC). CEOs like Bill Gates and Andy Grove (Intel) were and are nightmarishly paranoid. Gates refused to take on extra staff during a hectic growth phase because he was adamant that Microsoft needed to have at least one year of cash reserves in the bank to ride out any financial storms that might eventuate. Intel had the same philosophy and was able to weather a recession without layoffs or cutting R&D spending whilst competitor AMD dismissed key staff and slashed its R&D budget and consequently fell behind in the semiconductor arms race.

Enjoying the process
What I think is a valid critique of negative thinking is when it turns into paralysing anxiety. The motto "be alert but not alarmed" applies here. I am concerned about the possibility of societal collapse, but so long as that concern does not lead me to shrink from life, I don't see a problem with it. All the actions I plan to take have benefits outside a collapse scenario. It is a good thing to be out of debt. It is a good thing to have savings. It's generally positive to know one's neighbours. Gardening is an intrinsically enjoyable activity. It is prudent to be able to defend oneself against an assailant and self defense classes help one stay fit. There is no real downside to stockpiling food and water. If nothing happens, I can simply consume these stores when they come close to their use by date.

What do you think?
Am I completely nuts? Is the economy running stronger than ever? I confess to not being much of an expert on the nuances of global economic policy and am very open to being told I'm delusional (but I probably won't change my behaviour:P).

1 comment:

Blogger said...

There's a chance you qualify for a new solar rebate program.
Find out if you are qualified now!