Most of my professional life has been spent navigating through a world of uncertainty while advising investors whose primary goal is to acquire certainty. The paradoxical nature of that combination keeps me young and grays my hair at the same time. It’s exhausting but exhilarating, frustrating but fascinating.
Our desire for certainty is fundamental and instinctive. But even as we spare no effort in our search for it, the 800 pound gorilla in the room, the question that will not go away is: Does certainty even exist? Is it achievable, or is it simply wishful thinking?
The most logical and obvious place to look for answers is the 2,500 years of recorded thinking that philosophers have given to the subject. But that is simply impossible in a column of this size. More importantly, given the fringe status of philosophy in modern society, most of us would not even relate to the arguments. So we have to look elsewhere. Fortunately there is an alternative where we can find a tangible and understandable treatment of the subject—one that relates much more to our current thinking and cultural sensibilities: science.
One plus one equals two. If certainty exists, the most logical place to find it would be in science. Four years ago I was listening to a retired academic named William Byers being interviewed on one of my favorite podcasts: economist Russ Roberts’ EconTalk. Byers was discussing his new book “The Blind Spot,” an essay on the general misperception of science in the world. I was intrigued by the discussion and bought and read the book. In looking for some fresh ideas for this month’s column I pulled Byers’ book from the shelf and after leafing through a few pages I knew that his observations about uncertainty in science would be relevant to our interactions with uncertainty in the investment world.
The incredible success of science—the process of using a systematic form of observation and reasoning to understand, control and create things—has led many of us today to view it as the ultimate repository of truth and certainty. Byers very quickly challenges this kind of thinking. He asks: “What happens then when science and mathematics discover uncertainty and incompleteness as an intrinsic and unavoidable feature of the world?”
Byers introduces us to the idea of uncertainty in science with a paradox of the simplest kind: the difference between language and reality. He writes: “Take the concept of infinity. Infinity (in-finity) means non-finite, the essence of infinity is that it cannot be captured by the finite. Yet that is precisely what defining does—it reduces infinity to something that is finite and manageable.” The very fact of conceptualizing the world in either words or numbers is nothing more than a useful abstraction—and while enormously valuable, it isn’t the same as the reality it describes.
As systematic and as rational as it is, science, Byers reminds us, “is a creative art form.” All the great scientific advances were the result of individuals who looked out at the world and saw it in a fresh new way. This means there is no absolute, no objective body of definitive knowledge that will remain unchanged. It is all up for grabs—all the time.
In the early years of quantum mechanics there was a famous argument between Albert Einstein and Niels Bohr. Bohr held that the uncertainty surrounding the behavior of subatomic particles was both inevitable and inescapable; and Einstein held that the uncertainty scientists observed was due only to the current lack of understanding. He proposed that one day there would be a more complete theory that would eliminate the uncertainty. As brilliant and famous as he was, Einstein was wrong. Uncertainty is an important feature of quantum mechanics and a legitimate description of the real world; we just had to get comfortable with the idea.