The quake that shook the world

To hear it from correspondents in Japan, the anxiety was more contained there than it was in the rest of the world, where panic and anxiety gripped everyone. As tragic as the Japanese earthquake has been for hundreds of thousands of people there, and as fumbled as the government's response has been, Japanese themselves seemed to manage the process with a studied calm.

Well, that is, outside the financial markets. The virtual crash of Tokyo's stock exchange and the surge in the yen revealed just how spooked investors could be by any sentence that contained the words 'nuclear' and 'catastrophe'. Late in the week, coordinated intervention by the G-7 countries brought the value of the yen down somewhat, causing the stock market to recover some of its lost ground.

Nonetheless, the economic shock waves from Japan were felt around the world. It's not just investors engaged in the usual bit of panic selling these occasions set off: caffeine-wired stock traders seem to jump at any opportunity to get excited, and probably yell "buy!" when there's a two-for-one deal on pizza.

But the Japanese earthquake was sobering for other reasons. First, it's a reminder that even in the most developed and well-ordered societies, nature can be a fickle and humbling thing. In this age in which visionaries enthuse about a hyperproductive world in which technology can solve any problem, we sometimes get harsh reminders that, in the end, life is not so easily mapped out.

Whirlwind change

And this, in turn, reminds us of how volatile the world in which we live can be. Two years ago, we were crawling out of the global economic crisis that had come near to destroying the world economy. Then, the future began to look bright again, and economic pundits said growth would return to the world economy, and happy days would be back soon.

Then, some Tunisian vendor sets himself on fire, the Middle East rises up in revolt, and oil prices shoot through the roof. And no sooner has that happened than an earthquake hits one of the world's major economies. The dent to economic growth will itself not be insurmountable. However, to stem the panic that resulted, the Japanese central bank pumped more money into the economy.

That happened in a world economy already awash with the liquidity that was injected to stem the last financial crisis. If the optimists are right, and economic growth does continue, they will quickly turn pessimistic. That's because inflation will rocket, and oil will be costing us a lot more than US$100 a barrel.

And that's not even to mention what might yet happen in Yemen, Bahrain, Libya or even, God forbid - because it doesn't look like the Saudi royal family can - what happens in Riyadh. No sooner do the economic pundits catch their breath, kick up their heels and settle in for a whisky sour at the end of a rough day than some other unforeseen event comes along.

Balancing risk

These have been described by the Lebanese statistician Nassim Nicholas Taleb as 'black swan' events - occurrences so rare and unpredictable that they do not factor into the sort of mathematical models which are supposed to have ordered our contemporary world. But as Taleb has pointed out, just because something has not happened, does not mean it will not happen. And when it does, its impact can be far out of proportion to the frequency of its occurrence.

Japan will get over this earthquake. The world economy will adjust to high oil prices. However, simply because we cannot foresee any more risks on the horizon does not mean they will not occur. Catastrophes will befall us. The question is not whether they will but, rather, whether we have built societies sufficiently resilient to withstand them when they do.

Japan probably has the capacity to come quickly through this tragedy, though the long-term costs will be high. But for those of us who live closer to the edge, the anxiety of these times will hardly diminish.

John Rapley is the Bradlow fellow at the South African Institute of International Affairs. Email feedback to columns@gleanerjm.com and rapley.john@gmail.com.