New City Agenda Webinar: Radical Uncertainty – Decision-making for an unknowable future
John Kay and Mervyn King
Uncertainty surrounds the big decisions we make in our lives. How much should we pay into our pensions each month? Expand the business? Change our strategy? Enter a trade agreement?
We do not know what the future will hold. But we must make decisions anyway. We crave certainties which cannot exist and invent knowledge we cannot have. Humans are successful because they have adapted to an environment that they understand only imperfectly. Throughout history we have developed ways of coping with the radical uncertainty that defines our lives.
Mervyn King and John Kay draw on biography, history, mathematics, economics and philosophy to highlight the most successful - and most short-sighted - methods of dealing with an unknowable future.
The book emphasises the vast range of possibilities that lie in between the world of unlikely events which can nevertheless be described with the aid of probability distributions, and the world of the unimaginable.
This is a world of uncertain futures and unpredictable consequences, about which there is necessary speculation and inevitable disagreement – disagreement which often will never be resolved. The ramifications of radical uncertainty go well beyond financial markets; they extend to individual & collective decisions, as well as economic and political ones; and from decisions of global significance taken by statesmen to decisions taken by everyone.
They will discuss how contemporary approaches to dealing with uncertainty rely on a false understanding of our power to make predictions, leading to many of the problems we experience today. Instead of evidence-based policy it is leading to the production of policy-based evidence. They explain how instead of inventing numbers to fill gaps in our knowledge, we should adopt strategies that will be robust to alternative futures and resilient to unpredictable events.