Some uncertainties are resolvable. The insurance industry's actuarial
tables and the gambler's roulette wheel both yield to the tools of
probability theory. Most situations in life, however, involve a deeper
kind of uncertainty, a radical uncertainty for which historical data
provide no useful guidance to future outcomes. Radical uncertainty
concerns events whose determinants are insufficiently understood for
probabilities to be known or forecasting possible. Before President
Barack Obama made the fateful decision to send in the Navy Seals, his
advisers offered him wildly divergent estimates of the odds that Osama
bin Laden would be in the Abbottabad compound. In 2000, no one--not
least Steve Jobs--knew what a smartphone was; how could anyone have
predicted how many would be sold in 2020? And financial advisers who
confidently provide the information required in the standard retirement
planning package--what will interest rates, the cost of living, and your
state of health be in 2050?--demonstrate only that their advice is
worthless.
The limits of certainty demonstrate the power of human judgment over
artificial intelligence. In most critical decisions there can be no
forecasts or probability distributions on which we might sensibly rely.
Instead of inventing numbers to fill the gaps in our knowledge, we
should adopt business, political, and personal strategies that will be
robust to alternative futures and resilient to unpredictable events.
Within the security of such a robust and resilient reference narrative,
uncertainty can be embraced, because it is the source of creativity,
excitement, and profit.
