Tag Archives: worst case scenario

The Parable of the Great Fire of London

This is from the book Aftershock:  Protect Yourself and Profit in the Next Global Financial Meltdown by David Wiedemer, Robert Wiedemer, and Cindy Spitzer.

It was fairly obvious, even in the seventeenth century, how major urban fires could be prevented and how a city should be built to be more fireproof and less vulnerable to extremely large fires.  However, the political reforms that would have been required to make London safer from large fires were so great that the changes needed to prevent a fire were never implemented before the Great Fire.

But, as is often the case, ignoring a potential problem was not enough to prevent it from happening.

Eventually, a serious fire broke out and destroyed all of London.  Once London was destroyed, people became far less resistant to making the big political reforms needed to keep it from recurring.  Previously resisted reforms were rapidly implemented and London never had a fire of that magnitude again.

Detail of painting from 1666 of the Great Fire of London by an unknown painter, depicting the fire as it would have appeared on the evening of Tuesday, 4 September from a boat in the vicinity of Tower Wharf. The Tower of London is on the right and London Bridge on the left, with St. Paul's Cathedral in the distance, surrounded by the tallest flames.

How bad was this fire?  From Wikipedia:

The Great Fire of London was a major conflagration that swept through the central parts of the English city of London, from Sunday, 2 September to Wednesday, 5 September 1666.  The fire gutted the medieval City of London inside the old Roman City Wall…  It consumed 13,200 houses, 87 parish churches, St. Paul’s Cathedral, and most of the buildings of the City authorities. It is estimated that it destroyed the homes of 70,000 of the City’s 80,000 inhabitants.

There was no shortage of warnings about the danger. Voices spoke loudly and clearly against the danger.  But no one was willing to do the hard work, the quite “unpopular” work, of making decisions that could have lessened the consequences — until after the worst case scenario finally happened.  No one took the worst case scenario seriously enough to act.  And I would say that 70,000 homes destroyed in a city of 80,000 inhabitants qualifies as the worst case scenario.

So, here is the lesson of this parable.  It would be a wise move indeed to pay attention to worst case scenarios, and act before these scenarios become reality.

But to take such action requires massive courage in the face of opposition.

Just think…  If only Exxon had learned this lesson before the Valdez.  Or, if only BP had learned this lesson before the great oil spill.  A lot of money spent early (admittedly, a hefty amount) would have saved a much greater amount of money, and significant destruction — to the environment; to the economy; and, in the BP case, to the very real lives of the families of those who died in the explosion.

I think that companies, and cities, and governments need to heed the parable of the Great Fire of London.  Because, the real lesson is this (quoting again from the book):

But, as is often the case, ignoring a potential problem was not enough to prevent it from happening.

And here is the obvious next question that we really need to answer:  what warnings are we not giving enough attention to today?