COVID-19 is once again on the rise in Europe. In Germany, the economic outlook is increasingly unclear, as demonstrated by the 10 percent plunge in Lufthansa’s stock over the course of a single day. Some areas have reverted to full lockdown to suppress the spread of the virus. The death rate for Europe as a whole, however, is not as high as it was in the spring.
There are still far too many things we don’t know about this virus. What we do know is that the virus targets and widens economic disparities, creates political and societal divisions, strains relations between countries, and creates fissures in the international system. Although it is truly frightening how the virus cuts into the weakest aspects of human society, its offensive is not systematic—mutations lead to variations. The virus does not have a will of its own. It has no plan. In most countries, people have grown tired of the fight against the virus—a certain “war weariness” has set in. When I spoke with a young Indonesian entrepreneur over Zoom, he said it would be difficult for Indonesia to adopt additional measures to prevent the spread of the virus.
“Only rich, developed countries can [afford to] lockdown. Only the most fortunate people can stay home when they are told to. In short, a lockdown creates disparities. Teleworking is the same. Large companies are the only ones that can do this—it’s not possible for small- or medium-sized companies. So this ends up creating disparities as well.
“To get through the coronavirus crisis, we have to take the digital revolution further. But further digital transformation will also widen disparities. For the poor, the only choice is to get infected with the virus or starve. It’s a desperate choice. There will surely be a societal backlash at some point. There will be a rebellion. I can’t predict what will happen in the future at all. It’s scary.”
Our already unpredictable world appears to be entering a new age of “radical uncertainty.”
At a news conference not long after the 9/11 terrorist attacks, then-U.S. Defense Secretary Donald Rumsfeld famously said that the world contained “known knowns,” “known unknowns,” and “unknown unknowns.” The terrorist attacks of 9/11 were an example of an “unknown unknown.” It was not the result of “something we knew we didn’t know.” Rumsfeld was talking about the radical uncertainty of “not knowing what we don’t know.”
COVID-19 poses a far greater threat to the entire world than the 9/11 attacks or the 2008 Lehman shock. Geopolitical and geoeconomic conditions, including the U.S.-China conflict, are increasingly fluid, while globalization and the fourth industrial revolution have polarized politics and societies everywhere. Order and rules—both domestic and international—are under threat. It is hard to predict anything. This overwhelms rational judgement and the fear that stems from this can lead to dangerous overreaction. Uncertainty is fundamentally radical.
What can we do? Our only choice is to learn to coexist with uncertainty.
When it comes to the pandemic, or climate change, we may have to accept a certain amount of coexistence, even as we develop countermeasures. We will have to adopt two approaches simultaneously: mitigation and adaptation. As is often said, the only way to prepare for the future is to create it. This is not as outlandish as it sounds—in fact, we do this on a daily basis. Educating our children is the perfect example. One could also say that the best way to prepare for the future is to invest in it. If you really want to prepare for the future, the best way is to invest in brainpower.
It was in 1869 that the American railroad baron Leland Stanford joined the Central Pacific Railroad and the Union Pacific Railroad to establish the first transcontinental railroad. Stanford could never have dreamed that the agricultural college he founded and gave his name to would, a century later, become the seedbed of Silicon Valley.
To survive radical uncertainty we also need to develop our “animal spirits.” Radical uncertainty cannot be coped with through computerized models or AI-driven forecasting. John Maynard Keynes wrote, “Thus if the animal spirits are dimmed and the spontaneous optimism falters, leaving us to depend on nothing but a mathematical expectation, enterprise will fade and die.” Keynes was discussing the affinity between animal spirits and uncertainty. Uncertainty inspires entrepreneurship, which has an animal spirit at heart.
Such animal spirits are distilled and refined by trial and error. NASA has experienced two disasters: Both the Challenger and Columbia space shuttle explosions resulted in the death of their seven-person crews. Normally some type of political accountability would be pursued—indeed, one could even imagine the NASA program coming to an end. But the U.S. allowed it to continue. This can be attributed to a hegemon’s belief in space as the domain that would decide America’s future. It was because of NASA that Elon Musk’s Space X came into being. This age of radical uncertainty demands spontaneous optimism to face the many challenges that come our way.
Yoichi Funabashi is chairman of the Asia Pacific Initiative and a former editor-in-chief of the Asahi Shimbun. This is a translation of his column in the monthly Bungei Shunju.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.