Newman, Jay - Undermoney by Newman Jay

Author:Newman, Jay [Newman, Jay]
Language: eng
Format: epub
Publisher: Scribner
Published: 2022-01-25T05:00:00+00:00

29 Limassol, Cyprus

After the ballet, Volk whisked them back to the Better Place. Vicker and Gonzaga watched as the Butler ladled his own variation of bouillabaisse into warm bowls. Ivanov poured ice-cold vodka.

“Mr. Vicker, I am interested to know your reaction to what we discussed at lunch. How can we work together?” Volk asked.

“Lorenzo and I have been talking about nothing else. You got me thinking about how Perrow includes ‘tightly coupled’ systems in his definition of ‘normal accidents.’ So I spent the afternoon reading up on some related ideas. One is ‘network effect’ and the other is ‘disaster creep.’ The ‘normal accident’ idea is neat, but we may as well work on accidents that ripple, causing potentially catastrophic effects. Let’s call them normal, networked catastrophes.”

Volk nodded: his pupil was catching on. Network effect and disaster creep were the logical extrapolations of Perrow’s insights. In the decades since 1984, when he first published his research, every man-made system on earth had become infinitely more complex and ever more tightly coupled to other systems. Back then, for instance, local electric utilities were still controlled by human beings who looked at dials and gauges, turned knobs and flipped breakers and switches. Thirty-five years later, human operators were pretty much along for the ride. In the name of efficiency, utilities relied more and more on “smart”—tightly coupled—computer programs that talked to one another and taught themselves by employing artificial intelligence algorithms. But that was just the system effect. The network effect arose from the fact that each utility’s “smart” software talked—or tried to talk—directly to the software of other utilities, educating and learning from one another. American utilities might be legally separate, but, as a practical matter, they operate as one huge network. Every country had organized the same way, and, in Europe, transnationally. Those interconnections mean that, when accidents happen and disasters occur, they tend to be bigger. In academic lingo: disaster creep.

“For the sake of conversation, in the U.S., most electric and gas utilities are public companies,” said Vicker, fairly vibrating with excitement, his left eye twitching involuntarily, cracking his knuckles unconsciously. “People can buy and sell their stocks and bonds. What if it’s a hot summer and a transformer explodes? Maybe it is no big deal. Happens all the time. What if three explode? Or five? What if major transmission lines are damaged? What if, at the same time, one of the power lines overheats and fuses and an LNG tanker on ‘shore’ power loses the juice it needs to keep the gas cool? What if it explodes and takes out a nearby generating station? What if all that prevents the utility from supplying power to major industrial companies—so that factories have to shut down?”

Vicker, on a roll, stopped for a breath. In thirty seconds, he had drawn a roadmap for the guys who could make all those things happen. A series of improbable, fat-tail events occurring in quick succession—all “normal accidents”—equipment failures, human errors, one thing building on the next, rippling through the electrical grid and the economy.

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