How can one know whether China will or will not democratize? In general, as Karl Popper showed in The Poverty of Historicism, political futures in even the middle distance are unknowable because of the inherently uncertain and contingent dynamics of politics. Therefore, an analyst should focus on the multiple factors that make different futures more or less likely.

In The Black Swan, Nassim Haleb shows that in the post–Bretton Woods age of unregulated financial globalization, an extraordinary volatility is ever more likely. Thus, practical wisdom suggests a need to hedge against the unknowable and gargantuan risks of sudden booms and busts. Not even the hedge funds know how much to hedge. Unless one can create new international institutions to regulate the new monies created since the dollar floated in 1971 and since new instruments (non-bank banks) were invented in the middle 1980s, the global forces at work will produce unimaginable futures.

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