The Roman Philosopher Lucius Anneaus Seneca (4 BCE-65 CE) was perhaps the first to note the universal trend that growth is slow but ruin is rapid. I call this tendency the "Seneca Effect."

Friday, January 7, 2022

Collapse by Doubling Down: How Leaders Create Their Own Ruin


Napoleon won all the battles he engaged in, up to Borodino (1812), which was a non-victory, equivalent to a loss. From then, on it was all downhill from him. Napoleon had engaged in a task too big even for him: invading Russia. It is typical of successful leaders to use the doubling down strategy that leads them to a rapid collapse in their career -- another manifestation of the Seneca Cliff. 

Gnaeus Pompeius (Pompey) was a very successful leader during the final years of the ancient Roman republic. Isaac Asimov told his story in 1971, noting a curious detail. Pompey was successful in everything he did up to a fateful day, in 61 BCE. From then on, everything he did was a failure until he was assassinated in Egypt, in 48 B.C. Half-jokingly, Asimov suggested that Pompey's reversal of fortunes coincided with having desecrated the temple of Jerusalem, that he had just conquered. 

Even without desecrating anything, it is a constant of history that "invincible" leaders tend to end their days in the dust after a stellar career. Another case, centuries after Pompey, is that of Napoleon Bonaparte. He won every battle he was involved in until, in 1812, his army faced the Russians at Borodino. Maybe it was a victory, but it weakened Napoleon so much that he didn't win any more battles again. 

There are many more examples. Think of Adolf Hitler: successful in everything he did, but he failed to bomb Britain to submission. Then, he doubled down by attacking the Soviet Union in 1941 (same mistake as Napoleon). Disaster ensued. Or of Benito Mussolini. Everything he did was a success until he decided to join Germany in WWII. Some of the early Italian moves in the war, as the attack on France in 1940, could be defined as successes. But they were just a prelude to disaster. Later on, a completely clueless Mussolini bungled from a defeat to another, so much that one wonders how was it possible for a single man to do so much damage. And let's finish with an honorable mention for Saddam Hussein, who must have believed he was the reincarnation of the ancient Islamic warriors when he ordered the Iraqi army to attack Iran in 1980. It was a victory for Iraq, but at an enormous human and economic cost. Then, Hussein doubled down by invading Kuwait, and you know what happened. 

I think there is a certain logic in these stories. It is a basic rule that goes as "success doesn't teach you anything." The human mind is easily deceived by overinterpreting favorable events and successful people become convinced that what was just a stroke of luck was instead due to their superior intuition or intelligence. The result is that they kept doing whatever they found that was successful in the past. And not just that. If they found something that worked, then people tend to repeat it on a larger scale. It is the "doubling down strategy."

In the roulette game, the doubling down strategy is known as the "martingale." You choose a color, red or black, and you double your bet on it until you win. The idea is that you may suffer a series of losses but, eventually, you'll recoup them and make a profit when your color comes out.

It is unbelievable how many people think that the martingale is a good idea. The problem is that it looks easy and it seems to work. Unfortunately, as I discuss in my book "The Seneca Effect," it is a fast lane toward collapse. Eventually, you'll face a string of losses long enough to ruin you and, at that point, you'll be torn to pieces by the claws of the black swan. 

Pompey in Jerusalem, Napoleon at Borodino, Hitler and Mussolini in Russia, Saddam Hussein in Kuwait, they suddenly found themselves facing something that was much larger than they had expected and that led to their rapid ruin: the Seneca Cliff:

Above: the Seneca Curve. For Napoleon, the peak was at Borodino in 1812. 

Now, I think you understand the point I wanted to make, even though I will not explicitly say what I mean (I have already lost a blog to censorship). During the past two years, we have seen our leaders doubling down several times and, so far, they have been successful. So much that they keep doing that, raising the stakes and the threats at every step. 

Will they overextend themselves and create their own ruin? It may well be. If this is the case, we can detect the transition moment when they arrive to a doubling that they can barely afford. Like Napoleon at Borodino, they suddenly see the cost of one more of those victories that, earlier on had seemed to them cheap and easy. 

Are we starting to see that? Maybe not yet, but some signs of fatigue are starting to appear. If we are approaching the peak of the Seneca Curve, their downfall could be rapid. And also very noisy. 


(*) Tolstoy describes the battle of Borodino in his "War and Peace" novel. It does not pretend to be a historical study, but it does make the point that, once the battle was started, Napoleon had no more control over it. He gave orders that were not executed on the basis of information that was already obsolete when he received it. 

[Napoleon's] troops were the same, his generals the same, the same preparations had been made, the same dispositions, and the same proclamation courte et energique, he himself was still the same: he knew that and knew that he was now even more experienced and skillful than before. Even the enemy was the same as at Austerlitz and Friedland- yet the terrible stroke of his arm had supernaturally become impotent.  

All the old methods that had been unfailingly crowned with success: the concentration of batteries on one point, an attack by reserves to break the enemy's line, and a cavalry attack by "the men of iron," all these methods had already been employed, yet not only was there no victory, but from all sides came the same news of generals killed and wounded, of reinforcements needed, of the impossibility of driving back the Russians, and of disorganization among his own troops.

Formerly, after he had given two or three orders and uttered a few phrases, marshals and adjutants had come galloping up with congratulations and happy faces, announcing the trophies taken, the corps of prisoners, bundles of enemy eagles and standards, cannon and stores, and Murat had only begged leave to loose the cavalry to gather in the baggage wagons. So it had been at Lodi, Marengo, Arcola, Jena, Austerlitz, Wagram, and so on. But now something strange was happening to his troops.


  1. Obviously we can see the signs of fatigue. This is because "our leaders" had to move quickly, and their time is running out. Tic Tac.
    Yet, can we find counter examples in History? Gengis Khan is a good one, any other?
    But this is not my point here. I rather think that they are not trying to conquer or build something, they are destroying first. A creative destruction similar to what Marx and Schumpeter had described, and many other thinkers probably influenced by Hinduism and the God Shiva. (see the wikipedia page about creative destruction).
    The Empire as we know it today has been built over the last century and the matter is no longer to maintain it but to reduce it and keep a grasp on what will remain.

  2. Totally understand your point. Let's hope doubling down results in ruin. This post reminds of Solon's story in Taleb's book, Fooled by Randomness, which makes exactly the same point. Bravo!

  3. Let's see, but they seem to prefer to take on more risk and put more people at risk than to admit failure. I just hope that an opportunist like Trump does not pick up the pieces and we end up looking down into an even bigger dystopian cliff

  4. It pays to remember that nothing ever stays the same. Circumstances are in constant flux and power shifts from one place to another. When leaders double down under changed circumstances, collapse is the result. Right now the world is marinated in debt and the global economy is teetering on the brink. We live in, ahem, interesting times. Let's just hope that cooler heads prevail and nuclear weapons are not used.

  5. "During the past two years, we have seen our leaders doubling down several times and, so far, they have been successful. So much that they keep doing that [quicker and quicker], raising the stakes and the threats at every step" - until they force the masses into demolishing and burning the running feel-good Social Contract - by the masses' own hand - to the ground

    No system of Economics can self-price the Energy supply animating it - or the process becomes circular.

    A system of Economics that self-prices the Energy supply animating it - is a system of looting.

    Our leaders know, since Javons in the 1860s, that selling fossil fuels on the basis of what's called 'supply and demand' - is just a feel-good system, a social system at core, a very humane system to start with, but an extremely brutal at the end.

    Karl Marx, acting alone or inspired and financed by our leaders - is who has actually sealed the definition of our primitive Social Contract - Capitalism.

    To prove him right, the experiment of what's called the Soviet Union has been executed - Communism (from that point on, there was always a "Sir Eddington" to come along an "Einstein").

    So we had "Capitalism" vs Communism.

    Huxley's billions of syringes BNW (1932) vs [non-]informed drugging for the masses (2020) - 88 years.

    Orwell's never-out-of-fuel perpetual terror BB (1948) vs Patrick Wood's perpetual Technocracy and Pandemic (2020) - 72 years.

    Moon Landing (1969) vs Moon Landing Lies (1969 - actually, a Perth, Australia Newspaper published next day that a viewer has spotted a Coca-Cola bottle laying on the ground of the moon, watching the landing live. Professional UK photographers on youtube saying the photos released by NASA is very easy to recognise as fake, as if NASA has deliberately telling the world the landing is fake) - overnight.

    911 2001 vs Inside Job (well-put Final Cut documentary has been released just few months after 911) - few months.

    Until today, when the media is hammering the masses' consciousness with jabs vs VERAS (the US db listing adverse effects and confirming Jabs are deadly for thousands and thousands) - have become a real-time dual-reality - "So much that they keep doing that [quicker and quicker], raising the stakes and the threats at every step"

    Thermodynamically, there is no such thing called Capitalism - the rest is choreography.

    Our leaders seem desperate to push the masses today to shred the current social contract to pieces, in their own hands, as humans have exhausted all fossil fuel reserves to scarcity.

    Our Western Civilisation is so ashamed of burning all fossil fuels in a mere 300 years - this far, our leaders want the masses to demolish the Social Contract, along the shame.

    The tragedy is if the masses will be willing to get a jab every day, only to have the power grid, fuels and shelf foods kept running - rather than becoming another Iraq, Syria, Libya or Yemen.

    What our leaders to do then - calling terrorism to lend a hand of help?


  6. Ugo, would you tell us newbies how does one lose a blog to censorship? Were you kicked off the web entirely by some higher power? and for what?

    1. I tell the story at All attempts to link to it on FB were blocked. About the site itself, it was not blocked. But several people told them that they found it impossible to locate it using the search engines. I interpreted this as a case of "soft blocking." Then, I decided to switch to another site where I tend to be much more careful in what I say. Hinting, not stating. Maybe they are smart enough to understand what I mean, we'll see.

    2. They will apply censorship only if your message is explicit. There is no point in censorship if most people don't easily understand the message. They will not censorship "hinting". They prefer to mask the hinting messages by producing a lot of their own mainstream information noise.

  7. As terrible as things are, thank you Ugo for making it possible to turn to Florence and find reason and culture still alive there, even if irrationality has for a time overwhelmed the university.

    This is a virtual loggia and garden, in which to walk and discuss in the Medicean Humanist spirit.

  8. You know, currently whenever a certain Xi Jinping makes another move that proves disastrous for China, Chinese bloggers on Youtube will very often comment (in Chinese): "Go, Xi, go! Double up!" The whole idea is precisely that by messing more things up and doing so faster he'll hasten the demise of the CCP -- something many Chinese can't wait to see (including me). ;)

  9. I'm not sure if this post speaks of the future or past, but in the USA, the doubling-down happened in the past. In 2008, the financial crisis brought the economy to its knees. The central bank took on debt to alleviate the problem. They dropped interest rates to near zero to keep the money flowing too. The economy, unlike the stock market that has skyrocketed since, never really recovered before COVID hit. The pandemic has been ongoing for 2 years, but unemployment is supposedly much lower (only because many dropped out of the labor force). The central bank wants to unload debt and raise interest rates. Doing so means the economy will likely enter a painful recession, if not a depression. The President would love for them to keep pumping money into the economy, as this is an election year for some Representatives, but printing more money makes inflation get bigger and bigger. Banks also want to avoid that because that would lead to a recession. There is no way out now. All the old tools for fighting the economic woes won't work anymore.

  10. Hello Ugo,

    What a wonderful series of disasters you have conjured up from the times past. I would like to venture another perspective: "It is hard to learn when you are winning!" -or with a more scietistic sounding name "memetic evolution".

    A behaviour is useful, until it isn't. Children cry and get milk, until one day it doesn't work and they have to figure out another way to get food. As long as a certain behaviour "works", we usually don't think and just go on repeating our patterns.

    The most dangerous situations are when your behaviour is getting dysfunctional, but people around you block the facts and tell you what you want to hear. In those situations (think Xi, Bonaparte, Bush, world leader of your choice), it is extremely difficult to learn, even when you start losing.

    When there is no correctional feedback signal, the behaviour continues far longer than it should have, leading right to the Seneca Cliff.

    I see a similar example as the commentor dirty_birdy, here in Europe. The Newspapers (owned by oligarchs) all say that it is fine to print more money, that there will be only "temporary" inflation. The decision makers don't get the right feedback and disaster is approaching quickly.

    I also read about the "Bay of Pigs"-disaster, that pres. Kennedy was actively silencing the press in the preparations of the invasion. Afterwards, however, he said "You should have printed that it was stupid - we would not have invaded!". Aftersight is always 20/20, and Kennedy was brave to admit it while serving as a president.

    And, I would suggest that Martingale tactics is the other way around: Don't change behaviour as long as you are *losing*. It is not the same mechanism, I think. There is not much to learn here...

    Which dysfunctional behaviours do I have that I ignore to my own demise?? That is what I need to ponder on, and seek feedback...


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  13. One reason for Napoleons defeat in Russia was the tactics originally invented by the Prussian officer Ludwig von Wolzogen who was an advisor to the tsar. He held the view that it was impossible to beat Napoleon in a battle. However by precise calculations he predicted that by letting Napoleons army enter into Russia and not attacking him he would run into such logistical problems that his army would finally starve. Borodino was fought (and lost) against Wolzogens advice in a desperate attempt to save Moscow, but otherwise his tactics were mostly followed and his predictions were validated by history. His prewar Memorandum from 1810 (in German) is an impressive strategic document and is to be found as an appendix to his reminiscences. Here is the Link: It takes you to page 297 of the book, scroll down page 311 and then somewhat further to Appendix I: id=pEA6AAAAcAAJ&pg=PP11&hl=de&source=gbs_selected_pages&cad=2#v=onepage&q&f=false

    I permit myself this remark because Wolzogens way of thinking and calculating was mainly based on resources and shows some striking parallels to the thinking of Prof. Bardi. Its the way of reasoning that is otherwise largely absent in mainstream thinking.

    1. Thank you, Lukas. It is a little difficult for me to read this story in German, but I trust your remarks about it!