The Principle of Ignorance

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The Principle of Ignorance is a ‘corollary’ of the Principle of Fragility, which states:

 

Complexity  X  Uncertainty  =  Fragility

 

This principle states that highly complex actions (or business models) lead to situations of fragility in uncertain environments (e.g. markets). For example, a highly articulated portfolio may result to be fragile in a turbulent market. In effect, the more an environment gets uncertain and volatile, the better it is to be simple and pragmatic. This is quite intuitive. By the way, the uncertainty, which characterizes the markets and the economy, is increasing (and the central banks can do nothing about it). In effect, as the economy becomes increasingly complex, it is also becoming more fragile. Moreover, this increase in volatility of the economy is a manifestation of the Second Law of Thermodynamics, which states that the amount of ‘chaos’ is either constant or it increases. The ancient Greeks would say that each generation leaves behind more chaos than it inherits. Things will not get simpler. Nothing new under the Sun.

The Principle of Ignorance states that:

 

Complexity  X  Ignorance  =  Fragility

 

To put it simply, a highly complex product, or tool, in the hands of a fool leads to fragility (danger). Place a child at the wheel of a sports car, an incompetent CEO at the helm of a multi-national firm, or a sophisticated derivative in the hands of an inexperienced investor. The results are easy to imagine.

Observing our society one comes to the inescapable conclusion that on average, the level of ignorance increases, much like the volatility of the global economy. True, we do have more technology, but people have traded books for tablets and this is generally not good. One trend that we witness is that in many countries the middle class is shrinking as the poor get poorer and the rich get richer. When it comes to education and intellectual endowment a similar pattern may be observed: the scientific elite on the one hand, a generation which ‘lives’ in the inappropriately called ‘social networks’, which are instruments of propagation of decadence, emptiness and mediocrity, on the other. Where will this take us? As the complexity of our lives increases – think of the volatile economy, terrorism, migrations, climate change, pollution, epidemics, cyber attacks, oil crisis, corruption, etc. – so does the overall level of ignorance of the society. Both factors on the left hand side of the equation are increasing: a spiral of complexity, ignorance, an increasingly fragile world.

 

 

www.ontonix.com

 

 

 

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2 thoughts on “The Principle of Ignorance

  1. Hi Jacek,

    Thought you might find this link interesting.

    http://www.slideshare.net/a16z/network-effects-59206938?qid=f21a9d93-bff5-43f0-8bca-12b8065e02bc &v=&b=&from_search=1

    Best Regards,

    Nicolas Vass

    Business Manager

    Ontonix Singapore

    Lev 24 | The JTC Summit | 8 Jurong Town Hall Road | Singapore 609434

    T : 65 6818 0931 F : 6818 0801 | M : 65 9191 4228 | E : nicolasvass@ontonix.com

    The information transmitted is intended only for the person to which it is addressed and may contain confidential and/or privileged information. If you received this in error, please contact the sender and delete the material from any computer. Receiving this message does not entitle you to reverse-engineer any of Ontonix’s proprietary concepts or ideas this message may contain.

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