Radical Uncertainty Lib/E: Decision-Making Beyond the Numbers

Much economic advice is bogus quantification, warn two leading experts in this essential book. Invented numbers offer false security; we need instead robust narratives that yield the confidence to manage uncertainty. Some uncertainties are resolvable. The insurance industrys actuarial tables and the gamblers 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 onenot least Steve Jobsknew 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.

About the Author :
Sir John Kay, fellow of St John's College, Oxford, has a distinguished career in academia, business, and finance. His writing, which includes the bestseller Other People's Money and a regular column for the Financial Times, has been recognized by numerous awards. Roger Davis has worked for over twenty years in the audio industry as an actor, narrator, director, producer, and editor. With a background in both performance and professional studio recording, he is able to operate successfully on both sides of the mixing desk, and has made over 500 audiobooks for HarperCollins, Hachette, Disney, Penguin, Routledge, Macmillan, Grub Street, Audible and BBC Worldwide, among others. His corporate voice-over work includes clients such as BP, Halifax plc, and Coca-Cola. He cofounded the weekly production of the audio edition of the Economist newspaper, and also narrated 50 editions. He is able to pronounce the name of Icelandic volcano Eyjafjallajokull.