Unknown unknowns in a post-Covid world

There is deep uncertainty as we look into a post-Covid world. Decision-making will need to respond.

‘… as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tends to be the difficult ones’, Donald Rumsfeld, 12 February 2002.

For someone that acknowledged the widespread existence of uncertainty and ignorance about the world, former US Defence Secretary Donald Rumsfeld – who died last week – possessed a remarkably confident, hubristic approach to decision-making.  This led to the disaster that was the Iraq War.

But for all of the flaws of the messenger, Mr Rumsfeld’s observation on uncertainty contains insight. There are many situations in which we cannot describe the relevant states of the world or the associated probabilities. Or to extend economist Frank Knight’s framing, there is a di…