In complex systems crises rarely begin with the shock itself. They begin when the equilibrium quietly starts to move.
Jacques Chirac, the former French president, once quipped: « Les emmerdes, ça vole toujours en escadrille », troubles, as he liked to say, always fly in squadrons.
At first glance the remark sounds like a politician’s joke about the accumulation of problems. Yet it captures something deeper about how complex systems behave.
Today the global economy appears to be flying through such a formation. A brutal war continues in Europe. The aftershocks of the pandemic still ripple through supply chains and labour markets. Inflation only recently retreated from levels approaching 10 per cent in several advanced economies, the highest seen in four decades. Geopolitical tensions are rising again in the Middle East.
When my previous column on global debt went to print earlier this week, the ink had barely dried before the geopolitical temperature rose once more.
History, it seems, is accelerating.
In a world carrying roughly 300 trillion dollars of debt, more than three times global GDP, disturbances rarely remain local. Energy markets react. Shipping routes become uncertain. Insurance costs rise. Financial markets begin to reprice risk.
Understanding these developments requires looking beneath the visible events.
Because in complex systems the visible crisis is rarely the real story. The real story lies in the structure underneath.
The hidden logic of complex systems
Scientists studying complex systems have long observed a recurring pattern.
Many systems appear stable for long periods. They fluctuate within a narrow range and give the impression of equilibrium. Yet once pushed far enough away from that balance, they do not necessarily return smoothly. Instead, they reorganise around a different equilibrium.
Physicists studying complexity, including Per Bak, described this behaviour as self-organised criticality. Systems gradually move toward a critical state where even a small disturbance can trigger a cascade of much larger consequences.
Geology offers an intuitive illustration. Tectonic plates move only a few centimetres per year. For decades nothing appears to happen. Stress accumulates silently along fault lines until suddenly the accumulated tension is released in the form of an earthquake.
The shock itself feels sudden but the forces behind it may have been building for years.
Volcanoes behave in much the same way. Pressure builds slowly beneath the surface until the system can no longer contain it.
Financial systems are not so different.
Leverage increases, asset prices rise and connections between institutions multiply. The system absorbs disturbances until eventually a threshold is crossed and adjustment arrives far more quickly than anyone expected.
History offers a striking example. In June 1914 the assassination of Archduke Franz Ferdinand in Sarajevo was, in isolation, a relatively small political event. Yet Europe at the time was a tightly connected system of alliances, mobilisation plans and geopolitical tensions. Once the chain reaction began, it unfolded almost automatically. Within weeks the continent had descended into the First World War, a conflict that ultimately caused more than 16 million deaths.
The assassination was the trigger. The structure of the system made the catastrophe possible.
Stability can create fragility
Paradoxically, long periods of calm often increase systemic risk. When volatility appears low and shocks seem manageable, participants gradually assume greater risk. Leverage rises. Financial structures become more complex. Safety margins shrink.
The economist Hyman Minsky described this dynamic decades ago. Stability, he argued, encourages behaviour that eventually makes the system unstable. The longer nothing breaks, the more people assume nothing will break. Until something does.
Some economists have tried to describe these shifts through long economic waves. The Russian economist Nikolai Kondratyev, writing in the 1920s, observed long cycles of expansion and contraction lasting several decades. The precise timing of such cycles remains debated, but the intuition remains powerful: long periods of stability rarely persist indefinitely.
History repeatedly confirms this pattern. The years preceding the financial crisis of 2007 and 2008 were marked by strong profits, low volatility and widespread confidence in the resilience of financial markets.
Today parts of the financial sector again report record profitability. Banks appear well capitalised. Insurers emphasise strong results and comfortable solvency ratios.
None of this is necessarily misleading, but financial history occasionally shows a peculiar pattern. Systems often appear strongest just before they are forced to prove it.
The reassuring mathematics of solvency
Modern financial regulation attempts to guard against these dynamics through modelling.
Banks operate under Basel capital rules. Insurers operate under Solvency II. Both frameworks require institutions to hold capital buffers designed to absorb severe shocks.
For insurers the benchmark is striking. Solvency II requires firms to hold enough capital to survive what regulators define as a one-in-two-hundred-year event, corresponding to a probability of roughly 0.5 per cent in any given year.
On paper that sounds reassuring. But this reassurance rests on a crucial assumption. It assumes the world behaves like the statistical models used to design those buffers.
When the tail arrives
Risk models typically rely on probability distributions resembling the familiar bell curve. Most outcomes cluster near the centre. Extreme events occur in the tail. Yet history has a habit of producing precisely those tail events.
Nassim Taleb famously described them as Black Swans.
When they arrive, systems designed around the bell curve suddenly confront reality beyond the model. The lesson extends far beyond finance.
Consider the Fukushima nuclear disaster of 2011. Engineers had built sea defences designed to withstand tsunamis of several metres. When the earthquake triggered a wave estimated at roughly 14 to 15 metres, it overtopped those defences, flooded emergency generators and disabled cooling systems.
More than 150,000 residents were evacuated, and the economic cost is estimated at over 200 billion dollars, making it the most expensive natural disaster in history.
The plant had not ignored risk. It had simply prepared for a smaller one.
The human factor
Human behaviour can amplify systemic fragility.
When confronted with uncertainty people instinctively search for explanations that simplify the situation. Once such a narrative takes hold, information that contradicts it is often ignored.
Psychologists call this confirmation bias.
A tragic illustration occurred with Air France Flight 447 in 2009, when a Paris-bound Airbus A330 crashed into the Atlantic after its speed sensors malfunctioned during a storm. The technical failure itself was manageable. Yet confusion in the cockpit led the pilots to misinterpret the situation and inadvertently place the aircraft into a stall. All 228 people on board lost their lives.
The failure was not only technical, it was cognitive.
Signals from the margins
Financial history provides its own reminders of how quickly stability can vanish.
In September 2008 the collapse of Lehman Brothers, with roughly 600 billion dollars of assets, triggered the most severe financial crisis since the Great Depression. The rescue of AIG (an insurer), whose derivatives exposures threatened the global banking system, required more than 180 billion dollars in government support.
At the time those numbers appeared extraordinary. In today’s financial system, where global debt exceeds 300 trillion dollars, the scale of future interventions could easily reach the trillions.
There are already small tremors at the edges of the system. The rapidly expanding private credit market, now estimated at roughly 1.6 to 2 trillion dollars, has begun to show signs of strain. Blue Owl Capital recently restricted withdrawals from one of its funds while selling roughly 1.4 billion dollars of loans to generate liquidity. Such developments do not constitute a systemic crisis, but financial history suggests that stress rarely appears first at the centre of the system. It begins at the margins.
Eric Lefebvre
Read also: The 300 trillion dollar question
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