Fenster writes:

The problem with the future is that it hasn’t happened yet.  I had a hard time explaining this to my finance students in a discussion of accounting and budgeting.  Accounting is replete with risks and uncertainties, but for the most part they are risks and uncertainties associated with whether you put things that already happened into the proper and most useful buckets.  Budgeting has all those risks, combined with the much more significant risk that things have not happened yet, and that your tool for managing the future my not only be off as a result of internal factors but external factors not under your control.

Figuring out what to do about the virus is a future-oriented task and as such it benefits by, but is also constrained by, projections about the future.  It is wise to take both benefits and limitations into account explicitly in fashioning policy but there is, if you will, a limit to this.  It is hard to make allowances for known unknowns.  Harder still to make allowances for unknown unknowns.  Harder yet again if the object of high uncertainty is of grave consequence, for it is here that the “fat tails” that Taleb discusses reside.  Sometimes the hardest things to make subject to probabilities are the ones that will kill you if you are wrong.

It is for this reason that the heart of leadership will always be characterized by hard to quantify words like “prudence” rather than fake precise words like “efficiency”.  One of the reasons we bend to the need for leaders is that from time to time we need someone to deal with fat tails.

The data are there.  Some high quality, some low quality, some missing, some faked.  The projections can be cranked out.  But the uncertainties create options and paths that do not answer themselves.

The cost-benefit can be done, though it is near impossible given the moral, technical and political difficulties associated with fixing the value of a human life.  And which life? Maybe that budding nuclear scientist that efficiency says to spare.  Maybe aging, ailing, failing grandpa living up the stairs, who can only rely on the charity and care that is part of our tradition.

So what about that virus?  The answer is hardly a given, and in the end will express something of the character of the people and the leaders they have in place to handle these kinds of problems.

This is all to say the best path is inextricably bound up with questions of values, habits and culture.  Public health, like the politics embedded in it, is downstream from culture, and culture will act both as a judge of appropriateness and risk and as a constraint on actual behavior.

A doctoral candidate who is in Shanghai has written about his optimism over the ability of cultures to rapidly adapt, and that crushing the virus by flattening the curve is possible as long as people adapt.

I’m sitting in Shanghai and life is perfectly pleasant. Without imports from abroad there would be no cases at all. But freedom of travel and assembly is *selectively* curtailed. Society has got its act together for this purpose. 

It’s actually a simple formula. The better organized society is towards this purpose, the less freedom needs to be curtailed to achieve effective control of the virus. What is happening effectively in China is this is being done dynamically in response to local conditions. . . 

Painfully and messily, behavior change is happening in Europe and America. It will bring the virus replication under control. And then it will be possible to rebuild freedoms step by step. That is the correct answer.

That’s a nice thought but might it not be possible that different cultures will not adapt, or adapt as quickly as Chinese culture has done?  There are benefits and drawbacks to living in a culture that puts the individual first.  One of the drawbacks is that it may be slower to respond to challenges that put a premium on the ability to adapt rapidly in ways that align with collective, not individual, aims.

Cultures change when faced with challenges to their underlying values but such change is typically slow, and happens only when there has been some Darwinian thinning of ideas or even the people that hold them.  So count me a skeptic on whether Americans will lurch effectively toward Chinese ways.

Lenin (b. 1870) posed the question “what is to be done?” My initial answer comes from the American management theorist Mary Parker Follett (b. 1868).  Look for the Law of the Situation.  Often (though not always) the path forward is made clear through a deep understanding of the current situation.

That’s a bit Pollyannish to be sure, and Follett herself came to the notion in trying to find ways to make the giving of orders more palatable.  But in the process of making for healthier interaction between superiors and subordinates she brushed up against an important truth: managers should spend more time and attention understanding the situation.  Not only will it make the order go down better if it is seen as neutral thing.  There is also the possible benefit that the situation may actually yield secrets about the future.

Of course people do this every day, including with respect to the virus.  But it is wise to constantly check and recheck assumptions.

We are approaching the world of Daniel Kahneman here.  Most of our thinking is less thoughtful than it should be.  We rely on useful generalizations, rules of thumb and heuristics and most of the time they work.  But nature provided a fallback in what Kahneman calls System 2: from time to time you need to do a counter-intuitive reality check on the heuristics you rely on most of the time.

Note that in Kahneman’s view this is just part of the human dilemma.  We need to simplify.  Sometimes our rules of thumb won’t work.  We don’t know exactly when to proceed and when to reflect.  That may require good intuition.  How do I feel about things?  Are my models working or do they need a good roughing up?

When as an amateur you are pitched headfirst into a crisis, one in which by its nature you have an interest and play a part, you cannot help but rely heavily on heuristics, many of which may end up thin reeds for action.  This problem is compounded when the phenomenon in play is fast moving and poorly understood by the experts, with the result that you get the pronounced impression that they, too, are improvising and building models on sand.

Take the concept of “flattening the curve.”

We see a bell curve indicating the life cycle of the virus without mitigation.  The we see a wider but shorter bell curve of the same volume, this one cresting just under a line indicating hospital ICU capacity.  Brilliant!  It went viral and now “flattening the curve” is a rallying cry.

But whether flattening the curve is useful in practice is almost wholly dependent on Follett’s “situation”.  We are drawn to the chart like moths to a flame.  But perhaps this is one of those times we should say to ourselves “wait a minute.  That sounds good but is it?”

Joscha Bach has written an article for Medium in which he says no.  Perhaps it is time to take a Kahneman pause and rigorously vet our heuristics.  And to ask the Follett question: what is the situation?  And can we derive a Law of the Situation from an understanding of it.   It does not have to be an Iron Law–just a better law, one that takes account of counter-intuitive self-directed reflection and analysis?

Bach argues that if you employ the conventional wisdom assumptions on rate of contagion and mortality the growth in infections and, in turn, in ICU stays, will be several orders of magnitude greater than out system can handle.

The curve without mitigation overwhelms the hospital capacity line so greatly that it makes no sense to even try to flatten it with our current mitigation approach.  Don’t preach flatten the curve without putting the actual numbers in.  To do so only wastes precious time as the exponential growth continues.  Bach argues for an immediate switch to Chinese-style hard measures on the grounds that since they worked there they have a fighting chance of working here, and we delude ourselves with all the talk of flattening the curve.

But two can plan the game of What is the Situation?  Does Bach get the situation right?

Damned if I know.