Uncertainty: Why We Can’t Predict Everything and Why That’s Okay

Uncertainty is what happens when we’re forced to make important decisions without knowing how things will turn out. It’s not just a nuisance - it’s a fundamental part of how the world works.

Imagine driving through thick fog with sunglasses on. That’s what decision-making often feels like: limited visibility, high stakes, and no guarantees.

This isn’t just a problem for the uninformed. Scientists, economists, and policymakers deal with uncertainty every day - even if they pretend to have things under control. It cuts across every major discipline: science, economics, psychology, finance, and more.

Uncertainty comes in two flavors. Sometimes it’s subjective - the result of our limited knowledge. Other times, it’s objective - built into the very nature of reality, no matter how much we know.

Scientific Uncertainty: Knowledge Has Limits

Let’s face it - in science, we don’t have all the answers. Even the best experiments come with margins of error. Models are simplifications. Instruments have limits.

This kind of uncertainty is usually subjective. It’s tied to how much we can observe, measure, or understand at a given moment.

Example. Picture a scientist tracking an asteroid’s orbit. Even with solid math and powerful telescopes, small errors in measurement make it hard to say whether it’ll come close to Earth - or not. All we can do is estimate the probability... and hope it misses by a few kilometers.

Objective Uncertainty: When Reality Plays Hardball

But sometimes, uncertainty isn’t about what we don’t know - it’s about how the world works.

Some systems are so sensitive that tiny differences in starting conditions can lead to wildly different outcomes. These are chaotic systems.

This isn’t science fiction. It’s a defining insight of 20th-century science: complexity and unpredictability are often built into the fabric of reality.

Example. The Earth’s climate is chaotic. Even with today’s best models, no one can forecast the weather in your city a year - or even a few weeks - in advance. Small changes can ripple into major shifts. That’s why meteorologists sometimes say, “Sunny, with a chance of... something.”

Another example? Electrons. According to quantum mechanics, we can’t know exactly where an electron is and how fast it’s moving at the same time (Heisenberg’s uncertainty principle). All we can do is estimate where it’s most likely to be - hence the term “electron cloud.” Just observing it changes its behavior. Talk about elusive.

How Uncertainty Shapes Our Choices

Uncertainty isn’t just a theoretical issue. It directly affects how people - and businesses - make decisions.

This is especially true in economics, where choices are often based on incomplete, evolving, or missing information. That’s where decision theory comes in.

Economists routinely make predictions about future events - demand, prices, markets - that haven’t happened yet. It’s a bit like planning a party without knowing who’ll show up, what they’ll eat, or whether the party is even happening.

There are two main types of economic uncertainty:

• Risk (or weak uncertainty): when the odds are known. For example, rolling a six-sided die gives you a 1-in-6 chance of getting a four.
• True uncertainty: when you don’t even know the probabilities. Like launching a brand-new product into an unknown market with no past data to guide you.

What counts as “uncertainty” also varies by field:

In physics, it often means measurement error. In statistics, it’s about confidence intervals and sample variability. In finance, it’s the volatility of returns. In psychology, it’s the anxiety of not knowing what to do.

Risk vs. Uncertainty: Not the Same Thing

People often confuse the two. But risk and uncertainty aren’t interchangeable.

• Risk is measurable - you can assign a probability and plan for it.
• Uncertainty means you have no clear idea of the odds. It’s uncharted territory.

Uncertainty is like walking into the fog with no map. Risk is walking into it with a compass and a weather report. One can be managed. The other... tolerated.

Example. Say your car has a 1% chance of being stolen this year. That’s risk - and you can buy insurance for it. But the long-term impact of a new housing law on real estate prices? That’s pure uncertainty - and insurers won’t touch it. For that, you’re on your own... or left with a lucky charm.

Why Uncertainty Isn’t Always Bad

Here’s the twist: uncertainty isn’t just a problem - it’s also an engine for progress.

It forces us to think critically, explore alternatives, test ideas, and build systems that can adapt. It’s what drives research, innovation, and creativity.

In real life, we rarely get all the facts. But uncertainty doesn’t have to paralyze us - it just means we have to work smarter, weigh our options, and prepare for different scenarios.

We can’t eliminate it, but we can learn to live with it - and make better decisions along the way.

Example. A smart investor doesn’t try to predict the future - they diversify. A doctor can’t guarantee a cure but chooses the most effective treatment available. An engineer builds safety margins into the design. Uncertainty is always lurking - it’s that one thing nobody saw coming.

In the End, It’s the Only Certainty We Have

Uncertainty isn’t a bug in the system - it’s a feature. It’s the rule, not the exception.

And ironically, it might be the one thing we can absolutely count on.