This blog was on hiatus till the Brexit event. It was impossible to compete with what everybody wants to know, but nobody can figure out.

The most unanswerable questions of intelligence revolve around public opinion. The tools of the pollster register binary choices, but not ardency of belief. “Stay” campers were not inspired to violence. One “Leaver” was inspired to murder politician Jo Cox. The electorate reacted to the event, the polls ringing like a planet struck by a meteor, when all the apparent solidity of the crust is belied by the liquidity of the molten core. There was cognitive dissonance to the last moment, vitiating the 60% “stay” vote predicted by the majority of polls.

The Brexit vote is a secession from the quasi-government of the EU, with more than passing analogy to revolution. In this manner, it joins a long list of predictive failures by intelligence organizations, pollsters, and everybody else with a finger in the pie. The inspiration for the genesis of the IARPA program FWE (Forecasting World Events) was the intelligence failure of the 2011 Egyptian revolution. To call this a failure is not really fair to the intelligence community, because no one has ever established a track record of similar predictions to rise above random chance. Those who tried occupy a reputational graveyard shared with financial mavens.

The mathematical reason is that these are systems of chaos. With few exceptions, conventional tools of prediction  are entirely based on trend extrapolation. Chaotic systems contain points called “attractors.” A system orbits around a particular attractor for a while, lulling its observers into somnolence, until it makes a switch to another attractor. This event motivates the popular press to exhibit banner headlines with generic rubrics like “game over.” But it is never a game for those who understand the problem. It remains a perplexity.

But as “new game”, or similar, will become a staple in the popular press, does accumulation of analysis offer any benefit in understanding the bounds of the new attractor Brexit has created? This in itself is a question. Pundits are now offering diverse opinions, well aware that if they score, they become famous. If wrong, rapid public amnesia will offer the option of another shot a few years hence.

An example from the stock market illuminates. In this example, imagine that every big money investor is a pundit. On the day of an interest rate change, the market reacts. But typically, the direction of reaction reverses on the second or third day, and becomes the semi-durable trend. The analogy with Brexit consequences is immediate. The mental framework of pundits of today is neoteric. As the event recedes, the neoteric framework will be replaced by a contemporary framework. The framework will eventually become historical, until sudden rupture when the international system jumps to yet another strange attractor.

What will the “second day” of Brexit look like? The vote split is suggestive, because the young wanted to stay. Over the coming years, the trade relations of the EU economic umbrella may be substantially replaced by piecemeal agreements recapitulating the original evolution of the EU. The EU did not spring into existence. Its distant ancestor, the European Coal and Steel Community, dates to 1951. In 1957, it was joined, in tandem, by the European Common Market. These institutions, and several others, were gradually subsumed to form the EU. Supported by the firm pronouncements of nervous EU authorities, the pundits concentrate their thoughts around an immutable EU structure, with less or more members. This may not be predictive, because those authorities are themselves groping for certainty.

But stress points for subsequent fractures, as well as healing glues, can be enumerated. It’s a good time to do this, because it will help us identify emerging trends more quickly. Four kinds of interests contribute to the generic _exit debate, in play in multiple EU countries:

• Populist. Including immigration, job export, and social inequality, populism is pro-exit.
• Macroeconomic. Multinational economic interests, which have evolved for 41 years in a large market, have adapted to specific business conditions, so they are against exit. If the historical environment had been a small, protectionist market, this would not have to be the case.
• Geopolitical, represented by thinkers whose mental spaces inhabit a hostile international system. Since World War I exploded the idea that economic interdependence made warfare impossible, geopolitics and macro economics have moved in a wary, partially decoupled embrace. NATO, the world’s most powerful military alliance, is the expression of the European geopolitical imperative.
• National interest, pro exit, to be distinguished from populist by rationalism. Greece is the in-play example. In July 2015, in Oracles of Greece, I wrote that Greece will exit the euro, which has equivalence to the current question. Greece will leave because it is mathematically unaffordable to stay.

Next: The interaction of the four categories.