The Covid19 pandemic has unquestionably increased the degree of uncertainty that we are all facing. Uncertainty about one’s job security, future income, ability to feed and educate one’s children, access to family support and other social activities all add to our stress levels. I didn’t even mention the uncertainty of whether or not one may contract the coronavirus and become severely ill—or die.
Given the stress that so many people are enduring due to heightened uncertainty, it may come as a surprise that a key theme in a lecture I watched this week was: We should welcome uncertainty; uncertainty is the spice of life!
The talk, Rebuilding the Global Economy Amidst Radical Uncertainty, was given by, Mervyn King, professor of economics and law at NYU – and a Knight of the Garter, which makes him Lord King.
Why should we welcome uncertainty? For starters, the world is full of uncertainty, so no one can avoid living in an uncertain world. It is better to learn how to navigate in an uncertain environment than to convince oneself that new policies or regulations—or more data— can reduce or eliminate uncertainty.
Okay, you may be thinking that if the current state of uncertainty is the spice of life, then I’ll forgo flavor and stick to a bland diet and lifestyle! King’s point is that to thrive in our uncertain world, we should focus on managing risk, where risk is defined as the downside outcome of a plan or strategy.
Risk tolerances vary and what type of risks individuals are comfortable managing differ greatly. Some people enjoy taking physical risks and have fun bungee jumping off of bridges. I’m not one of them. Other people enjoy exploring opportunities amidst chaos. King describes welcoming uncertainty as the ‘essence of entrepreneurship’. Successful entrepreneurs thrive on finding innovative ways to achieve desired outcomes. I enthusiastically place myself in this segment.
I highly recommend the lecture referenced above, which includes a discussion between Mervyn King and Randall Krozner, professor of economics at the University of Chicago Booth School of Business. It was the first in a series produced by the Booth School of Business. For more information, see: https://www.chicagobooth.edu/road-to-economic-recovery/upcoming-events/global-economy.
Janice McCallum
The previous post for the Chicago Booth lecture in the Road to Recovery series didn’t include the link to the actual lecture. Here it is: https://www.youtube.com/watch?v=op2QbNNqMEw.