The Other Iceberg Effect
In this episode, we explore a subtle trap with seemingly ‘self-renewing’ resources…
Everyone knows about the Iceberg Effect – that what we see on the surface is only a small part of the iceberg, and that there’s a lot more of it hidden beneath the waves.
But what about its corollary, the Other Iceberg Effect? Because if only one-tenth of the iceberg is visible, and the rest of it is floating beneath the surface, the whole thing will rise upward to rebalance itself when some of the top is cut away.
The trap is that the Other Iceberg Effect can give the dangerous delusion that a resource is sustainable, self-renewing. As we cut away some portion of the top, look! – there’s still plenty more! The level has risen again – it’s almost the same as before!
But it’s that ‘almost’ that should give us the clue that something’s not right here…
And the trap is even worse than it might seem at first, because it can trick us into consuming the resource far faster than we think we are. For example, imagine a one-hundred-foot iceberg. One tenth of that - ten feet - would be visible above the surface, whilst the other nine-tenths would be below. If we were to slice off the whole ten-foot-high top of the iceberg, we’ll have reduced its overall size by a tenth: it’ll now be ninety feet high rather than its previous one hundred. But the iceberg will float upward until it balances again: still one-tenth above, nine-tenths below. Which means that the visible part would now be nine feet high - only one foot less than before. So we’re actually using up the iceberg ten times more than than it would seem from what we can see on the surface.
What’s happened is that each time we’ve removed that top layer, yes, the level has almost returned back to where it was – but to do that, the whole iceberg has risen in the water. And eventually there’s no more iceberg left. If we don’t realise what’s actually going on in the Other Iceberg Effect, we’re likely to keep on going, keep on extracting this ‘self-renewing’ resource – until suddenly, and seemingly without warning, the resource vanishes, and we’re left floundering in deep water instead…
So watch for that warning-sign: a resource that seems to almost replenish itself as we use it.
There are many, many resources that are like this: a company’s reputation, for example, or the nutrients in a farmer’s field. And in each of those cases, if we don’t watch out for the warning-signs, don’t be surprised if we suddenly find ourselves in deep water, or worse…
(This episode was adapted from my 2011 post on the Sidewise weblog, ‘The Other Iceberg Effect’.)