There is a difference between risk and uncertainty .
Resolvable uncertainty is uncertainty which can be removed by looking something up (I am uncertain which city is the capital of Pennsylvania) or which can be represented by a known probability distribution of outcomes (the spin of a roulette wheel). With radical uncertainty, however, there is no similar means of resolving this.
This is because the world business and finance is ‘non-stationary’ – it is not governed by unchanging scientific laws. Most important challenges in these worlds are unique events, so intelligent responses are inevitably judgments which reflect an interpretation of a particular situation. Different individuals and groups will make different assessments and arrive at different decisions, and often there will be no objectively right answer, either before or after the event. And because what we observe is not the outcome of a stationary process, conventional statistical inference rarely applies and forecasts are often based on shifting sands.
That’s why we need to learn humility and curiosity to be able to survive !
Notes from the book, Radical Uncertainty by Mervyn King