Wednesday, October 1, 2014

On Independence and Secessionist Movements

There was a vote on September 18, 2014 for Scottish independence from the UK. The vote was relatively close and required a simple majority (>50%) of the voters to grant Scotland independence, but the vote was a (close) no with around 53% of the population voting no. Similarly, the Chinese central government seems hellbent on controlling everything going on and we're starting to see peaceful protests in Hong Kong as the central government tried to place certain restrictions on candidates that run in the Hong Kong elections.

As I've spoken about in previous posts, the world is currently in the midst of a depression wherein the world is filled with excess capacity and little demand. To add fuel to the fire, China has been driving the world's economy since 2008 when the American consumer proved unable to fill the void after a massive (and unsustainable) debt bubble. As I've discussed in my post about China's economic system, China has done this by creating a massive investment, infrastructure, and commercial real estate boom and has driven commodity prices skyward during this entire process (as I discussed here). In other words, countries that're heavy commodity exporters could find themselves facing major internal struggles, particularly in regions where oppressed minorities are being oppressed by authoritarian governments.

Why do I bring up these economic issues? These economic issues create political and social unrest down the line as these booms and bubbles start to unwind and eventually burst. We're not even halfway through this depression, which means we're likely to see an increase in social and political unrest coming up. I've also spoken about the possibility of fragmentation in large countries like Russia and China while we're seeing the countries in the Middle East fragment into smaller tribal states. Both Russia and China are (and will continue to) experience difficult economic circumstances. In other words, we're likely to see an intensification of separatist movements in China and Russia. It's not just China and Russia either. As I stated earlier, China is driving many parts of the world economy. If we see economic troubles in China, we're likely to see more secessionist and independence movements across the world.

Does it make sense for a Chinese central government to control every aspect of regions that don't want to be under their control, have a completely different view of society, and don't need anything that the central government actually provides? Of course not. Similarly, Russia is having lots of issues of controlling its population in places like Dagestan and Chechnya with highly Muslim populations. In response to the oppressive nature of governance in these areas, you're seeing a rise in radical Islam. It's a similar situation in places like Xinjiang and Tibet, which are currently under Chinese control, where the population is mostly Muslim or Buddhist under the oppressive rule of an atheist leadership/government. It makes little sense for these areas to be under Chinese control for any purpose other than buffer regions. Even if they are buffer regions, is it okay for the populace of these countries to be oppressed by governments just because a few people in those governments want to hold those areas as buffer regions? Does it make any sense and can the current situation hold for an extended period of time? I find the answer to all of those questions to be a simple and obvious no.

We're also seeing secessionist movements come to power in places like Balochistan (from Pakistan), there have been secessionist movements in Eastern (heavily Shiite regions) Saudi Arabia away from the rule of the House of Saud for a while, the Kurds want to separate away from Turkey and Iran (where there have been standoffs with the Iranian government and the Peshmerga--the Kurdish military), and in many other areas. In regions like Tibet, the younger population particularly favors independence much more so than the older population.

What should the role of foreign governments and, in particular, the US be?
It makes sense from almost every single perspective for other foreign governments and the US to support these movements, especially if these movements are peaceful.

Why should these secessionist movements be supported?
The most obvious argument is a risk argument. Decentralized systems are more robust because the costs remain localized. In decentralized systems, failure is small and localized which means that the error of a state or group of people don't have the same systemic impacts as would otherwise be the case.

If you have one centralized state with a 10% chance of failure/unit time (we'll use one year in this example), the expected time of survival is 1/10%=1/.1=10 years (or whatever units of time). If you have n decentralized states where the probability of failure is 10% and the failure of each state is independent, the failure rate for the collective system is .1^10=10^(-10) while the expected time of survival for the unit as a whole goes to 1/(.1^10)=10^10.

If we generalize the case to n different states each with an independent probability of survival p (p<1), the chance of failure for the system as a whole is p^n. The expected time of survival for the system becomes 1/(p^n)=p^(-n)>1. In other words, the more decentralized the system the more robust the system becomes at an exponential rate with respect to the number of states as long as the states are run independently.

Secondly, there are certain events that we want to completely eliminate (like the risk of world war). Any time we have large centralized units in control over large areas, we create risks of conflict between two or more large, powerful regions at once. The consequences for not just these regions, but for the planet as a whole, can be disastrous. If there's irreversible damage, we (as the human race) could potentially end up being screwed. Trying to eliminate events like war is stupid because you can't control every part of the world all at once. Rather than trying to prevent events that're obviously out of our control and understanding, we need to work to limit their impact. So having individual states fight small wars with one another doesn't create the same level of tail risk as having large states fight in large scale wars. It's important to note that we may see more small scale wars this way, but that's okay. We cannot (and should not) try to control everything and try to prevent it with naive interventionism as we do not know the costs of such policies. What we should do is to prevent the costs of any possibility to be much larger than anything we can handle. In other words, we shouldn't focus on the probability of being wrong and instead focus on the maximum costs IF wrong. Encouraging large-scale decentralization is the first step to realizing this goal.

Thirdly, authoritarian regimes that oppress peoples and other societies shouldn't be tolerated. Why shouldn't they be tolerated?
1. They don't share our views of a proper society
2. It's common to see authoritarian regimes not have any sort of fluctuations in their political systems. What ends up happening is that the oppressive nature of these regimes leads to pushing all small fluctuations underneath the surface while hidden risks are allowed to accumulate.
3. These regimes often have less changes, but when the changes do happen, they happen suddenly, unpredictably, and the changes are often very costly (both monetarily and in terms of human casualties).

Nassim Taleb has an excellent paper called The Black Swan of Cairo where he discusses the issue of volatility suppression with regards to matters of oppressive authoritarian regimes and foreign policy.


  1. There's one minor mistake in this post: Hong Kong's protests aren't arguing for secession from the People's Republic of China. They perceive Beijing as failing to honour the spirit of the Basic Law framework set out by the Joint Sino-British Declaration.

    1. I know they're not asking for secession and I never said they were. I am saying that the US and foreign governments should support Hong Kong.