A plea for uncertainty: everybody complains about uncertainty, but it might be a good thing to have.

Not a day goes by without a new remark about uncertainty. Here is a quote from a well-known business journal:

 
   It is one of the most melancholy reflections of the present day, 
   that while wealth and capital have been rapidly increasing, while 
   science and art have been working the most surprising miracles in 
   aid of the human family, and while morality, intelligence, and 
   civilization have been rapidly extending on all hands;--that at 
   this time, the great material interests of the higher and middle 
   classes and the physical condition of the labouring and industrial 
   classes, are more and more marked by characters of uncertainty and 
   insecurity. 

The quote is from The Economist, June 1843.

There is no life without uncertainty. And maybe life today is as uncertain as it always has been: Yes, there has been a tech hype and counter hype, but the rest of the economy? Volatility in the S&P 500 is no higher today than in the past. Uncertainty is simply a key characteristic of any economic activity! Then again, business has to reduce uncertainty, otherwise we cannot do any reasonable planning or make investments, and we cannot commit to our customers that we are in business for the long haul.

In the summer of 2001, the editors of Business Week asked in a cover article entitled "The boom and the bust" why, in spite of all the information we had about the new economy, we made such fools of ourselves. The authors reached the conclusion that there is no lack of information, just a dearth of good judgment for interpreting that information. We could "see" what happened, but we failed to understand the …