Reports that something has not happened are always interesting to me, because as we know, there are “knowns”; there are things that we know that we know. We also know that there are “known unknowns”; which means that we know that there are things that we do not know. But there are also “unknown unknowns” — unknown unknowns.
– Donald Rumsfeld, US Secretary of Defense,
Department of Defense Report February 12, 2002
I have drawn a diagram of this star below. I like to draw pictures because they often point out things we miss. The things we remember can cause all kinds of problems. This time what was missing from Rumsfeld’s statement (and thinking?) was the “known unknown”. These are things that we don’t know but we didn’t know, because other people know. The “known unknown” is also called ignorance and is often the result of conviction or faith.
The entire quad looks like this
The vertical axis is about your knowledge (or your organization’s knowledge) compared to other people’s knowledge. This axis should be easy to get a handle on except for those situations where someone thinks they know more or less than they do which can cause some confusion as to where the true zero is. At the top, we have things you know. Below, we have things you don’t know but other people (maybe) know. Horizontal relates to the world or reality. Some things are literally known like the current weather, the past history of stock prices, the law of gravity, etc. Some realities are unknown such as future interest rates, future government policies, future technology, etc. personal drawing. For example, your knowledge may be my ignorance; What would surprise me might be a prediction for you because of your greater understanding of personal knowledge or knowledge about reality. The greater your personal knowledge, the less ignorant you will be but more importantly, the more predictable you will be and the fewer surprises you will face.
Another deep source of personal ignorance and wonder is sanctification. Technology brings a person back to the upper right corner where he knows everything and knows nothing. People may be surprised when they read this, but even though they are often asked their opinion on current events, actors usually know nothing about politics and know a lot about acting. 
. The same is true for other jobs. A more serious example would be that of a scholar. Scholars or researchers are rewarded for their productive work as measured by the number of publications in prestigious journals. While there is a lot of focus on work-life balance and other fun hobbies, those who focus 100% of their energy on their specialty jobs eventually get promoted. This has resulted in many intellectuals focusing on each other with a specialized understanding of a small part of the world but few who bring it all together. The result is experts who find it difficult to communicate with the wider community and even with each other. No single person can learn everything there is to know. For example, there were philosophers. Philosophers would think about the world. Philosophers then split into natural and “other” philosophers. Natural philosophers later became mathematicians, physicists, chemists, astronomers, geologists, biologists, … and not long after that they also split up. So today it is very difficult to put information in context.
So setting things up is not done by individuals. Instead it is done through processes or system delegation. Now the problem is that technology has caused an attitude where it is thought that there is always “they” who can solve any problem. Global warming? “They” will think of something! Flu symptoms? “They” will think of something! Running out of oil? “They” will think of something!
The problem is that there is no “they” in charge of the world. “They” may be able to fix discrete problems like gas chromatographic analysis of ear wax, but “they” can’t fix a systemic problem. Systems with inertia. A lot of inertia. Have you ever wondered why English as taught in schools focuses on analyzing texts that are often done by crazy people, you know, writers, rather than grammar or copywriting or journalistic articles or just books? Students actually imitate English professors, who imitate ancient monks, who imitate ancient Greek philosophers (read more here). Architecture is another example. Why do large centers have Doric columns that mimic the stone facades of Greek temples and the wooden columns of simple huts? Why do universities still have conferences from a time when communication was so slow and expensive that students could not afford to buy their own textbooks? It is systemic inertia and the reason for systemic inertia is that there are no “they” in charge of the tasks.
This becomes a big problem when it comes to planning for the future. For example, financial planning is largely based on historical returns even though everyone warns us that past results are no guarantee of future returns. The question we should ask ourselves is not what unknowns are known eg whether the future return of the stock market indices is 4%, 8% or 12%, but rather what are the unknowns? Will democracy still exist in 30 years? Will the dollar be worth something? Will trade rather than currency be the focus? Will everyone become entrepreneurs rather than workers? Will world war III happen? Are people expected to grow their own food or will they be piped in rich green food? There are few retirement plans in the form of 401(k)s, IRAs, SEPs, etc. make arrangements for this, because financial planners, unfortunately, are experts in financial planning.
There are two strategies to follow here. What is free is to follow the crowd and do what everyone else is doing. This is psychologically safe. Note for example, that as many people were stupid and speculated on the eternal rise of real estate prices they got bailed out. Individuals do not do this well because democracy does not care about individuals. However, people are faster and faster than mobs, so this makes another strategy that I prefer. But this strategy is not just about raising a million dollars. It’s about a situation where money doesn’t buy you anything.
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First posted 2008-03-17 07:12:24.
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