Love hearing about open-minded people in positions of power.
I guess my other response to this would be that what you can assess probabilistically is almost by definition not strategic. Unless you are probabilistically assessing something that is a one-off, potentially fatal choice, which is the wrong approach. Decisions under fundamental Knightian uncertainty require that leaders abandon probabilities in favor of impact, and step back and use their imaginations to understand the full range of the plausible future environments they might be up against. This can be scary as hell, because once you start doing it, you come to a realization of just how wide the range of the plausible really is. But it's the only way to even have a chance of anticipating what actually will be. The next problem, and it is a huge one, is that in imagining the "right" scenario, you will have imagined a bunch of scenarios that do NOT take place. Yet you need to be prepared for all of those plausible outcomes. On top of that, in many cases, you will have imagined plausible catastrophes that will require long-term, sustained preparedness. In 2003 I wrote a scenario for the U.S. Coast Guard in which a coronavirus comes out of China, spreads worldwide, kills hundreds of thousands of Americans, massively disrupts world supply chains, finally makes videoconferencing a big business, and causes anti-Asian sentiment and general xenophobia. It was just one of five scenarios in that project, but the admiral heading up our workshop group was made Principal Federal Official for pandemic flu response. Great policies were enacted by 2005, PPE stockpiled, coordination established between local-state-federal-tribal etc. public health officials... and then nothing really happened for 15 years, and the regular seasonal effects of budget freeze-thaw eroded our accomplishments. Even the Obama administration at first defunded the pandemic response capability, before a swine flu near-miss caused them to restore it. Eternal vigilance is the price of catastrophe avoidance, but man, is it hard to maintain. No one gets credit for a catastrophe avoided, as The Obstreperous Taleb wrote in 2007.
I shall purchase the Rubin book forthwith. It is a spur to getting off the schneid and getting my own book, based on 30 years of doing this scenario stuff for big government and private sector clients, published. Your torrents of insight and erudition continue to be an inspiration...
I would just generalize your point about impact. It is just probabilistic reasoning interacting with marginal value. I think it should apply in every case, not just the extreme ones. But I agree with you that it matters most in the extreme ones, so this is mostly a quibble over method, which is fun.
If I had one criticism of Rubin method, it would be that his points are sort of obvious and that he should not pretend to be some great sage. Much of this is just Taleb which is in turn just Hume. On the other hand, he actually applied it when he had power. And as the great philosopher said, 95% of life is just showing up.
Speaking of the role of bad luck, Rubin had the bad luck of getting very wrong the value of fiscal austerity. That his wrong view there was convincing probably ended up costing us millions of person years of unnecessary unemployment, even if we ignore the global scope of the Washington Consensus. I mention this not on MMT grounds, but on Blancherian, if I may. Has he ever taken responsibility for that? Did it get onto his yellow pad?
"If I had one criticism of Rubin method, it would be that his points are sort of obvious and that he should not pretend to be some great sage. Much of this is just Taleb which is in turn just Hume". Also: there is a big difference between having the idea that the thing would be a good thing, and actually doing the thing regularly—having a procedure, and sticking to it...
I cannot tell you how important Rubin's views on this issue are. I have known leaders who start a discussion at a table by announcing what they think, essentially forcing others, especially underlings, to shut up or agree. I have also know Rubin-like leaders. They listen (and question) while allowing others to opine. The quality of decisions is far superior because everybody brings their A game to the discussion. If you were watching a silent movie of those two groups in discussion, you can identify the latter group because it also laughs a lot!
My understanding is that it is a fairly common technique in military organzations for senior officers who want a true open discussion to call for comments in order from lowest ranked person in the room to highest, to reduced the chances of everyone saying "I agree with my CO (or CO's CO)"
Love hearing about open-minded people in positions of power.
I guess my other response to this would be that what you can assess probabilistically is almost by definition not strategic. Unless you are probabilistically assessing something that is a one-off, potentially fatal choice, which is the wrong approach. Decisions under fundamental Knightian uncertainty require that leaders abandon probabilities in favor of impact, and step back and use their imaginations to understand the full range of the plausible future environments they might be up against. This can be scary as hell, because once you start doing it, you come to a realization of just how wide the range of the plausible really is. But it's the only way to even have a chance of anticipating what actually will be. The next problem, and it is a huge one, is that in imagining the "right" scenario, you will have imagined a bunch of scenarios that do NOT take place. Yet you need to be prepared for all of those plausible outcomes. On top of that, in many cases, you will have imagined plausible catastrophes that will require long-term, sustained preparedness. In 2003 I wrote a scenario for the U.S. Coast Guard in which a coronavirus comes out of China, spreads worldwide, kills hundreds of thousands of Americans, massively disrupts world supply chains, finally makes videoconferencing a big business, and causes anti-Asian sentiment and general xenophobia. It was just one of five scenarios in that project, but the admiral heading up our workshop group was made Principal Federal Official for pandemic flu response. Great policies were enacted by 2005, PPE stockpiled, coordination established between local-state-federal-tribal etc. public health officials... and then nothing really happened for 15 years, and the regular seasonal effects of budget freeze-thaw eroded our accomplishments. Even the Obama administration at first defunded the pandemic response capability, before a swine flu near-miss caused them to restore it. Eternal vigilance is the price of catastrophe avoidance, but man, is it hard to maintain. No one gets credit for a catastrophe avoided, as The Obstreperous Taleb wrote in 2007.
Details on my 2003 Coast Guard coronavirus pandemic scenario here... https://patrickmarren.com/2023/08/a-premonition
(Original link, which clearly illustrates how a great premonition can be - indeed, MUST be, in my opinion - far off the mark in many particulars, is https://www.uscg.mil/Portals/0/Strategy/Scenario%20Code%20Quebec.pdf )
I shall purchase the Rubin book forthwith. It is a spur to getting off the schneid and getting my own book, based on 30 years of doing this scenario stuff for big government and private sector clients, published. Your torrents of insight and erudition continue to be an inspiration...
+1
I would just generalize your point about impact. It is just probabilistic reasoning interacting with marginal value. I think it should apply in every case, not just the extreme ones. But I agree with you that it matters most in the extreme ones, so this is mostly a quibble over method, which is fun.
If I had one criticism of Rubin method, it would be that his points are sort of obvious and that he should not pretend to be some great sage. Much of this is just Taleb which is in turn just Hume. On the other hand, he actually applied it when he had power. And as the great philosopher said, 95% of life is just showing up.
Speaking of the role of bad luck, Rubin had the bad luck of getting very wrong the value of fiscal austerity. That his wrong view there was convincing probably ended up costing us millions of person years of unnecessary unemployment, even if we ignore the global scope of the Washington Consensus. I mention this not on MMT grounds, but on Blancherian, if I may. Has he ever taken responsibility for that? Did it get onto his yellow pad?
"If I had one criticism of Rubin method, it would be that his points are sort of obvious and that he should not pretend to be some great sage. Much of this is just Taleb which is in turn just Hume". Also: there is a big difference between having the idea that the thing would be a good thing, and actually doing the thing regularly—having a procedure, and sticking to it...
In The Vor Game the "all paths" character, Comander Cavilo, lost the game by constantly changing paths.
The Clinton Administration was really the top!
This should not be a paid-subscriber-only post. Brad, how much do you charge for opening a post to all readers who could benefit?
On second thought, maybe this is fine.
I cannot tell you how important Rubin's views on this issue are. I have known leaders who start a discussion at a table by announcing what they think, essentially forcing others, especially underlings, to shut up or agree. I have also know Rubin-like leaders. They listen (and question) while allowing others to opine. The quality of decisions is far superior because everybody brings their A game to the discussion. If you were watching a silent movie of those two groups in discussion, you can identify the latter group because it also laughs a lot!
My understanding is that it is a fairly common technique in military organzations for senior officers who want a true open discussion to call for comments in order from lowest ranked person in the room to highest, to reduced the chances of everyone saying "I agree with my CO (or CO's CO)"
Indeed...
Rubin's book is a gold mine. I wish I had had it years ago. I'm very grateful that he wrote it and that you've added your own Rubin-derived wisdom .