Risk versus Uncertainty

I have read the book Radical Uncertainty: Decision Making Beyond the Numbers by Mervyn King & John Kay. As the title suggests, it talks about radical uncertainty. What is uncertainty? Its definition is simple: any uncertain knowledge. But there are two types of uncertainty:

·         Risk: Measurable or resolvable uncertainty. Probability calculations can be applied. Example: the outcome of a roulette or lottery game. Problems of this type can be called puzzles. Phenomena of this type are stationary (their properties do not change over time).

·         Radical uncertainty: Uncertainty that is not measurable. It arises when there is obscurity, ignorance, vagueness, ambiguity, ill-defined problems, lack of information. It cannot be described by probability calculations. Problems of this type can be called mysteries. Phenomena of this type are usually not stationary.

We can predict the movements of the planets using Newton's or Einstein's equations. We can send a capsule to Mercury, which arrives exactly at the planned location after six and a half years and a complex trajectory. There is a risk, but it is measurable. Tomorrow's weather can be a puzzle, although sometimes (as in the Valencia cold drop in October 2024) it can also be a mystery.

We cannot predict whether there will be a nuclear war in the near future, just as H.G. Wells in 1913 predicted World War I for 1956. (I have always been a bit of a slow prophet, he said later.) The weather in a month from now is often a mystery.

Goodhart's Law: Any business or government policy which assumes stationarity of social or economic relationships are likely to fail, because its implementation would alter the behavior of those affected and therefore destroy that stationarity.

Bayesian Reasoning: Prior probabilities are assigned to uncertain events. Probability is continually adjusted based on new information obtained. Probability jumps. Example: The Monty Hall problem or the three boxes, two empty and one with a prize. You choose a box. The presenter, who knows where the prize is, opens another box and shows it empty. Should you change your choice, or not?

When you know nothing, Bayesian reasoning is not useful. I take as an example the book The Probability of God by Stephen Unwin. It is a strange book, which purports to calculate the probability of God existing by applying Bayesian theory. Since it is a mystery, that theory should not be applicable. Of course, the result (67%) depends on the assumptions the author has made, and the author knows this and says so.

Chapter 3 is the biggest flaw in the book. Unwin uses it to discredit arguments based on physics and biology (i.e. arguments based on fine-tuning). His reasoning can be summarized as follows: Being amazed that the universe seems fine-tuned to make life possible is equivalent to being amazed that when you stand in front of a map of a shopping mall that says “You are here,” you are indeed here. But this reasoning is wrong. If you stand in front of the map and everything matches, the amazing thing is that the map shows the structure of the mall, and that it is placed in the right place so that the “You are here” arrow is correct. This indicates that someone has designed the map to be faithful to the mall, and someone has placed it in the right place for the arrow. Therefore, the existence of the map with its correct arrow is an argument for design. Not only has Unwin not understood the argument based on fine-tuning, but he has also not understood his own parallel.

There is an interesting discussion in chapters 9 and 10. I liked this quote: –There are many bright, accomplished people who are people of faith. I think that it’s in their nature to be analytical and to seek to uncover rational justification for their beliefs... They entered their analysis with faith in the existence of God. The conclusions of their analysis were thus hardwired from the outset, and they merely sought an articulate, credible route to the predetermined end point... So the process of justifying faith is in my opinion a very artificial one... –Wouldn’t you accuse atheists of the same thing? They’ll enter into an assessment of the evidence for God having pre-decided their conclusions. –I agree. They’re equally disingenuous.

I have said many times that the difference between an atheist and a believer is that the believer starts from the axiom God exists while the atheist starts from the axiom God does not exist. From these starting points, reason begins to act. Therefore, in principle I agree with the analysis of the book on this point, but I would not call atheists and believers disingenuous. Those who do this, being aware of what they do and why they do it, are not disingenuous.

What about the existence of extraterrestrial intelligence? Is it a puzzle or a mystery? For Frank Drake it is a puzzle, and he proposed a formula to calculate the number of civilizations in our galaxy based on various probabilities (frequencies), in which the value of most terms is unknown. Perhaps it does not make sense to calculate these frequencies. The uselessness of the formula was clearly expressed by the XVII General Assembly of the International Astronomical Union when they declared that its result is between one (us) and one billion.

Drake Formula

It is clear that the existence of extraterrestrial intelligence is not a puzzle, but a mystery. In one of my popular science books, La vida en otros mundos (Life in Other Worlds, 1993) I expressed our ignorance in another way: The probability of the existence of extraterrestrial intelligence is 50%. Since we do not know anything, we could just toss a coin and, if it comes up heads, say that we are alone, and if it comes up tails, that we have company. So I applied the principle of indifference.

King and Kay's book has informed me that there is a debate among economists for more than a century as to whether what I did (I applied the principle of indifference) is correct. Whether one can say (or not) that the probability of an event is 50% if one has no reason to suppose that it has happened.

The same post in Spanish

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Manuel Alfonseca