FT Dec 31, 2007 – Some people have no tolerance of uncertainty

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LETTERS TO THE EDITOR: Some people have no tolerance of uncertaintyFinancial Times
Published: Dec 31, 2007

From Mr Norman Strauss.

Sir, Paul Mortimer-Lee (Letters, December 24) has perhaps responded to Sir Samuel Brittan from his area of expertise and, no doubt, the practical need to service his clients with forecasts. But in doing so he seems to have missed what to me is Sir Samuel’s critical hinge in his argument; namely, the contrast between the forecasters’ predictions, and the policy decisions flowing from their analysis, with the sense of uneasy foreboding that occurs when those studying the conclusions of this analysis are worried because they feel changes in the air have not been identified, or weak signals signifying their emergence identified and taken into account.

There is no point having a forecast that induces false confidence and delays awareness and understanding of barely emergent elements whose disruptive effects will call for an urgent reversal of policy and lead to a different forecast, analytical paradigm and options set. In such circumstances, surely Alan Greenspan’s desire to find out what is really going on from other indicators closer to the real world and keep his options open – rather than closing them down with a rigidly scoped forecast, whether containing probabilities or not – makes more sense and is closer to the newly evolving position than is an older forecast from a different viewpoint.

Being further up the analysis chain, so as to identify leading edge indicators sooner, must make more sense at any time, but especially at turning points and times of turbulence. This enables imaginative thinkers to be nearer to where the measurements are made, that inform the statistics, that are then analysed, to form hypotheses, to make further forecasts. This is of course not possible with “unknown unknowns” and “black swans” (well discussed by your columnists in previous months), which are not forecast and completely disrupt the old analytical paradigm and require new domains of expertise to emerge in order to embrace their newly formed reality.

Underlying this debate are, I suspect, the psychological variables of human nature, temperament, character, will, commitment, motivation and personality. Some people have no tolerance of ambiguity and uncertainty and try to draw their analysis to premature conclusions in the name of practicality. Others can handle the impractical holding of mutually contradictory viewpoints, strategies, scenarios, theories and intelligence for much longer, and do not need to close down their thinking prematurely in order to try to exert control today on what is going to prove to be uncontrollable tomorrow and will require a completely different competence, mental set, analysis and approach.

Norman Strauss,

Twickenham TW1 4QJ

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