A century ago, the economist Frank Knight argued in a book entitled Risk, Uncertainty and Profit that while some historical eras are shaped by measurable risks, others are plagued with unfathomable uncertainty.
It is a distinction that has haunted the World Economic Forum this week. The Davos elites are generally skilled at measuring economic and financial risks. Some model environmental ones too, such as extreme weather. But few feel ready for the current domestic and geopolitical uncertainty, which is being exacerbated by unprecedented technological change.
Just ponder what has happened in the past few days: US President Donald Trump started by threatening to invade Greenland, and slapping on tariffs; then he seemed to back down; and now he has unveiled a rather baffling “Board of Peace”.