So far Uncertainty Wednesday has been, ahem, somewhat abstract and dry. A challenge for me in writing anything, including World After Capital, is that I like to proceed methodically, which means putting foundations first (note to self: this makes for boring reading and I need to fix that). But now that we have the foundations in place, we can actually start to look at an example and will hopefully see it in a new light.

We are on the grounds of a fair or carnival when we come upon a machine that looks like Zoltar from the movie Big. This particular Zoltar machine is very simplistic in that it only prints out two different fortunes: it either prints “You will have a Good day tomorrow” or “You will have a Bad day tomorrow.” For brevity we will refer to these as G and B respectively.

The simplistic view of uncertainty here is that we don’t know if the next fortune told will be G or B. We might then, based on remembering something from a probability or statistics class that we have taken, jump to a next step such as counting how many times the machine has shown G versus B. But this is a shallow view of uncertainty and one that is obsessed with methods at the expense of understanding.

Instead I want everyone who has been following along with the series to think about encountering this machine using the framework I laid out. The machine is the reality and we need to think about both our observations of the machine and our explanation for the machine’s behavior. Let’s say we have a series of Gs and Bs, what are the limitations on that set of observations? What are possible explanations of the machine? And how do those two combine to give us uncertainty? What is it that we are really uncertain about?

I encourage everyone to think hard about these questions by yourself before I start writing about them after Thanksgiving. This example may seem trivial at first but as we will see it is quite rich.