Black Swans and the Messenger Equilibrium
From Ancient Dynasties to Modern Crises: The enduring interplay of personality traits that foretells unforeseen change.
The recent federal court's overruling of Trump's tariffs served as a powerful reminder of a fascinating question:
Why do some individuals effortlessly command a room, while others, equally brilliant, seem to fade into the background?
This complex dynamic is explored in Stephen Martin and Joseph Marks' book, "Messengers," through the concept of what they call "Hard" and "Soft Messengers."
In essence, it's a forensic study analysing the differences between personalities that produce loud, 'hard' personas and those that are more introverted, shy, or elusive. The core question they pose is:
Why can some people effortlessly command the attention of everyone in the room, while others can seem inherently untrustworthy?
The book delves into the merit of focusing on one style over the other, both personally and professionally. It frequently references figures like Donald Trump, who leveraged an undeniably 'hard' message to become POTUS. But it also explores the impact of billionaire entrepreneurs who remain largely unseen, almost "ghosts" to the public.
I took the findings from this writing a step further, aligning the hard/soft messenger dichotomy with Nassim Nicholas Taleb's Black Swan theory. I propose that the interplay between these messenger types can lead to an inevitable "Black Swan" event – an unpredictable event with extreme impact, which only in hindsight appears obvious.
I've simplified this idea into a conceptual model I call the Messenger Equilibrium:
It's an infinite loop of realities we can predict with confidence:
Hard Messenger Action (Initiates) » Soft Messenger Reaction (Counters) » New State of Equilibrium (Temporary) » Unforeseen Outcome (Black Swan Potential) » (Loop back to new Hard Messenger Action)
This model isn't about predicting the specific Black Swan event, but rather highlighting the inherent tension and cyclical nature between these two messenger types. The constant push and pull, the counter-reactions from powerful hard messengers to equally powerful soft messengers (or vice versa), creates a dynamic system where an unpredictable, high-impact outcome is almost guaranteed.
This dynamic, while starkly illustrated in recent political events, is far from new. Throughout history, we've witnessed countless instances where the powerful, often unyielding "hard messages" of individuals or regimes have met their counter in the form of a "softer" power.
Consider the ebb and flow of Chinese Dynasties: periods of autocratic rule and forceful expansion (hard messenger) often gave way to internal rebellions, the rise of philosophical movements, or the quiet erosion of authority from within (softer messengers), ultimately leading to their collapse and the rise of a new order – an unforeseen, high-impact "Black Swan" event for the existing power structure.
Similarly, during World War II, the aggressive, 'hard messenger' ideology and military might of the Axis powers faced the collective, often more deliberative yet equally powerful, 'soft messenger' response from the Allied nations, leading to a global reordering that few could have precisely predicted at the war's outset.
Even in the evolution of global economic systems, we see cycles where unchecked corporate power or speculative booms (hard messages) are eventually reined in by regulatory bodies, consumer advocacy, or market corrections (softer powers), creating significant, often disruptive, shifts.
These historical echoes reinforce the core premise of my model: that the equilibrium between powerful hard and soft forces inherently leads to transformative, albeit unpredictable, outcomes.
The significant global economic tremors caused by the sweeping tariffs imposed by the Trump administration were undoubtedly the actions of a 'hard messenger,' designed to exert immense pressure and reshape international trade. However, as my model predicts, such powerful actions provoked a counter-response. Within a relatively short 57-day window, the US Federal Courts ultimately banned these illegal tariffs as of writing.
This political tug-of-war clearly demonstrates the "Soft Messenger" (in this case, the established legal and judicial system with its inherent checks and balances) acting with an "equal level of power" to counter the 'hard' agenda.
The overruling, while perhaps not a "Black Swan" in the grandest sense, certainly represents an unpredictable, high-impact counter-movement that fundamentally altered the expected trajectory of global trade relations. It's compelling evidence that the dynamic expressed in our equation plays out in real-time, often in unexpected ways.
So, what does this mean for us, practically, from a risk tolerance perspective?
For those of us not living and breathing the intricacies of global politics and trade every single day, this understanding offers a profound lesson: don't panic when a significant, potentially world-altering event appears on the horizon.
Whether it's a new government policy, a disruptive technological shift, or a sudden market downturn, the initial "hard message" can be disruptive and influence poor strategic decision making. It's crucial to acknowledge the potential impact and prepare accordingly, safeguarding your business and personal interests.
However, equally vital is to prepare for the counter-outcome, the 'soft messenger' response, which can often present unforeseen opportunities. This perspective is similar to the theory of long-tail (or generational) investing.
In long-tail investing, the idea is that while individual short-term market fluctuations can be volatile and unpredictable, the overarching trend of broad market indexes over long periods of time is positive. Essentially, despite numerous "hard messenger" shocks (market crashes, economic downturns), the "soft messenger" of sustained innovation, economic growth, and human ingenuity quietly chips away at bringing positive returns in the long run.
Just as market history suggests that patience and a belief in underlying economic resilience lead to long-term gains despite short-term shocks, our "Messenger Equilibrium" model reminds us that powerful 'hard' actions often invite equally powerful 'soft' counter-actions.
This doesn't mean complacency, but rather an informed optimism and a strategic approach that anticipates both the immediate threat and the inevitable, often beneficial, rebalancing that follows.