I have been thinking about the relationship between action - actually doing things - and uncertainty. I think the key is the cultivation of phronesis - practical wisdom if we want to achieve better outcomes and not just be better in forecasting/making more accurate predictions as I try to illustrate below.
How to Get Better in Filtering Information and Reducing Noise?
I find that exposing oneself to a large amount of information from diverse sources initially and for some period of time is necessary to develop an intuitive filter for reducing noise and identifying meaningful signals. This sort of approach is not new of course. It is similar to Klein’s pattern matching in naturalistic decision-making approach or even to Aristotle’s notion of phronesis, commonly translated as practical wisdom, an intellectual virtue that can only be cultivated through experience and practice, so that you know the right thing to do in a particular context while keeping the “greater good” in mind.
For this to work, you’d need to open the gates and let the information wash over you. In time, you will develop a sense, an intuition of sorts, about what sources are accurate and valuable, what type of information is useful, what could be a signal, and what you should just ignore. You will not going to be perfectly accurate all the time naturally. But by paying close attention, keeping records, and being intentional in your actions , you can develop a filter that could work reasonably well in a domain or in a few inter-related domains. In other words, you will know what to look for, where to look for, and how to look for. All that requires practice and takes time. There are no shortcuts in cultivating practical wisdom.
The Importance of Taking Action
Having good judgment is not enough if you are not taking action as a result of that judgment. I can hear you saying “duh!” but I think that bridge between making an accurate judgment about an action/event/situation or accurately forecasting a particular outcome and acting upon that forecast/judgment is not that easy to cross as we tend to think.
In most cases, knowing what will happen or accurately assessing the situation won’t mean much if you do not take action since the consequences we would be facing are about actions, of ours and others, and not about our not-acted-upon judgments. Fundamentally, life is about pay-offs and consequences, both good and bad. As Nassim Taleb keeps pointing out, in the final analysis, it doesn’t matter how many times you are right or wrong. What matters is the pay-off or the consequence of you being right or wrong.
Most work on forecasting or decision-making under uncertainty is actually about judgments and have little to say about actions. We talk and write about cognitive biases, improving accuracy in terms predictions, being more proficient in identifying signals among noisy data, and more broadly making better judgments about future events.
This is to be expected since mental models and tools are generalizable while actions by nature and necessity are about particulars and contexts. What actions we can take would depend a lot on our particular circumstances (and even our risk taking propensity would change from domain to domain, from one time period to another etc.), resources available to us, our time-horizons, other actions we are contemplating, tradeoffs we’d need to make etc. It is not always clear what the proper action should be or what we should do with that information.
Taking action, especially if it is low-cost or can be reversed if you are wrong beats having a perfectly accurate judgment without action all the time. The point is to avoid irreversible decisions and keeping the optionality on things that matter. Agility in the face of deep uncertainty is a skill, much like phronesis - the practical wisdom - that needs to be cultivated and can only learned through practice.
Updates
Two quick updates on the previous forecasts:
1. On the coming crisis in the US: I am still fairly confident in my assessment that baring an overwhelming landslide victory for Biden and the defection of the Republicans en-mass after the election a political-legal crisis in the US is highly likely (85-90%). If anything I am more sure about it (95% confident) than before.
2. On Belarus: Lukashenko survived so far and as I said in my original post, having survived the first 4 weeks or so of protests I think his chances of riding this out increased dramatically compared to before. I still think a negotiated exit/exile option is the most likely but now I revise that down to 60-65%. Timing is hard as I mentioned before but I’d think that if he is not gone by Christmas, his likelihood of survival in power in the following 12 to 24 months would increase dramatically. At this stage the probability of Lukashenko riding this out is 25-30%, while things turning much more violent/quasi-civil war is perhaps 5-10%. As usual following Mark Galeotti on Russia (and more broadly FSU) is a time well-spent if you want to understand the underlying dynamics.
Feedback Wanted
This post is different from the previous 2 substantive ones in that it focuses on tools/ways of thinking rather than some geopolitical topic. As I said in the very first newsletter this is an ongoing experiment and partially a way of putting down my own process of dealing with uncertainty on paper so i can reflect and hopefully improve on it. But I also want to know whether this or similar topics about the ways in which we can make sense of uncertainty and make better decisions is something you want to read. Or would you rather just read my analyses/forecasts on international affairs and geopolitics? Please let me know either in the comments below or shoot me an email at balkan@devlen.com. Alternatively you can always reach out to me on Twitter.
Thanks for reading! Let me know what you think and share this post on social media or forward it to those who might be interested!
Until next time!
Balkan
P.S. I now have a logo for the newsletter.