Surprise, Shock, and Uncertainty

Mar 3, 2022 by Morgan Housel

A couple things I’ve been thinking about in the last week:

The world breaks every decade or so. There are so few exceptions to this it’s astounding.

What Covid-19 and the Ukrainian invasion have in common is that both have happened many times before but westerners considered them relics of history that wouldn’t resurface in their own modern lives. Maybe the common lesson is that there are difficult parts of humanity that can’t be outgrown.

However crazy the world looks, it can get crazier. History is just a long story of the unthinkable happening, precedents being broken, and people reading the news with bewilderment and denial. 

“History doesn’t crawl; it leaps,” says Nassim Taleb. The most important events tend to be abrupt, out of the blue, changing the world before people have time to rub their eyes and understand what’s happening.

There is a “shock cycle” for all big news events. It goes like this:

Assume good news is permanent.

Oblivious to bad news.

Ignore bad news.

Deny bad news.

Panic at bad news.

Accept bad news.

Assume bad news is permanent.

Ignore good news.

Deny good news.

Accept good news.

Assume good news is permanent.

In general people have no idea where they are in this cycle until after the fact.

Uncertainty amid danger feels awful. So it’s comforting to have strong opinions even if you have no idea what you’re talking about, because shrugging your shoulders feels reckless when the stakes are high. Complex things are always uncertain, uncertainty feels dangerous, and having an answer makes danger feel reduced. We want firm answers when things are the most uncertain, which is when firm answers don’t exist.

Historian B. H. Liddell Hart wrote:

We learn from history that complete victory has never been completed by the result that the victors always anticipate—a good and lasting peace. For victory has always sown the seeds of a fresh war, because victory breeds among the vanquished a desire for vindication and vengeance and because victory raises fresh rivals.

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https://www.collaborativefund.com/blog/surprise-shock-and-uncertainty/