The good thing about the global virus lockdown has been more time to read. The bad thing has been all the uncertainty about pretty much everything, from one’s health to the economy and world peace. All of which has made it a perfect time to pick up the new, 528-page Radical Uncertainty: Decision-making for an unknowable future, by Professor John Kay and Lord Mervyn King.
Many will know King as the former governor of the Bank of England. These days he is a professor at New York University and emeritus professor at the London School of Economics. John Kay is professor of economics at Oxford University and a widely published commentator on the subject.
I’m only half-way through Radical Uncertainty (Bridge Street Press, 2020). But I think the Financial Times has nailed it from what I’ve read so far in describing the book as “an eloquent rant against the faux-precision of mathematical models”.
The basic gist is that most of us move through life believing that the future is reasonably predictable because we’re surrounded by so-called experts who tell us that the workings of the world have been captured in models. Even better, those models allow us to predict the future with some statistical certainty. For instance, that it’s 60 percent likely to rain tomorrow and there is a 20 percent chance that a central bank with cut interest rates.
As two people with a deep understanding of the economic models that the world relies on, King and Kay suggest we’re deluded. And that such delusion is dangerous. The world is way too fuzzy and unknowable – too radically uncertain – to be able to be captured in even the most sophisticated computer model. So, while we all need to form some sort of view about the future to make decisions, we’re better to start from the premise that it’s all a guess and then do our best.
This world view has some upsides. It reestablishes the primacy of human intuition, gives you permission to make a good decision not the best-possible decision, suggests artificial intelligence will never take over completely and may make you feel better about any past decisions that now look stupid with 20/20 hindsight. How were you to know?
I’m continuing to read with interest and have got enough from the first half of the book to recommend it. It rambles here and there and is occasionally quite smug. But it’s an easy read, makes some profound points then gives practical tips on how to apply them in everyday life. It is also packed with fascinating bits of history and explanations of where many of the ideas that currently rule the world came from – and the bloody intellectual battles that led to that being the case.
By Grant Butler