From my perspective, the dominant religion of the last forty years has been the Cult of the MBA. And not just here in the United States. From China to India to Africa to Europe, it’s all about the numbers.

The Cult of the MBA’s golden rule is, “If you can’t measure it, you can’t manage it.” So the world has become obsessed with metrics. This is true even in the non-profit sector. When the state cuts the University of California’s budget, does UC argue it should receive full funding because education is a public good? Dream on, democratic socialist! What UC argues is that it’s a good investment. Even before the Crash of 2008, the Berkeley campus boasted about its contributions to the Bay Area and California economies, noting, among other things, that its expenditure of over $1 billion locally generated more than 9,000 off-campus jobs.

But there’s a line often attributed to Albert Einstein —and actually by sociologist William Bruce Cameron — that goes, “Not everything that counts can be counted, and not everything that can be counted counts.” More recently, and less confusingly, computer scientist and social media critic Jaron Lanier observed that “Information underrepresents reality.” Collecting and analyzing data can be useful, particularly when evaluating mechanized or digitized processes. But the more humanity is involved, the higher the element of uncertainty — and the more Cameron and Lanier must be heeded.

This is especially true as the entire world attempts to mitigate the COVID-19 pandemic, an event known in the risk management business as a Black Swan.

Wall Street trader-turned-philosopher Nassim Nicholas Taleb published The Black Swan: The Impact of the Highly Improbable in 2007. The title comes from the long-held European assumption that all swans were white. Then Europeans sailed to Australia and found black swans. Taleb uses the term as a metaphor for events that are:

  1. Unexpected and usually unimagined
  2. Sweeping in their impact, and
  3. Explainable after the fact, which deludes us into thinking they weren’t so unexpected or unimaginable at the time

Black Swans can be good or bad. Over the last century they have included the Great Depression, the rise of Hitler, the collapse of the Soviet Union, the blossoming of the Internet, and the attack of September 11, 2001.

What Black Swans share, in addition to the characteristics above, is that they defy managing. COVID-19 didn’t exist in humans a few months ago. Now the world is scrambling to contain it. That’s a classic Black Swan.

How do experts limit the impact of a Black Swan? In keeping with the Cult of the MBA’s golden rule, they first try to measure it: for COVID-19, how many cases are there, how fast is the number of cases increasing, what’s the mortality rate? And so forth. Once they’ve gathered their data (which especially underrepresent reality in the US due to a lack of testing), they make recommendations about human interaction.

Which can’t be controlled like machines.

Can the experts guarantee their disruptive strategies will work? Not when they’re dependent on millions of individuals cooperating. Even if the curve flattens, i.e. the pandemic peaks below the health care system’s breaking point, there’s no way to prove the cause was social distancing. To do that we’d need an alternate universe where we don’t implement social distancing and compare the result. Since we don’t have an alternate universe handy, the most we can assert is that successful suppression of COVID-19 correlates with the experts’ recommendations, as it remains possible, albeit unlikely, that success stems from other causes — or none.

I know this from personal experience. At a UC conference several years ago, the Berkeley campus received an award for the biggest reduction of automobile liability costs. As I stepped onstage to accept the tiny trophy, I whispered to the University’s CFO, “It’s not that we did anything. It’s that last year we hit a pedestrian and this year we didn’t.” He got it, but didn’t break his smile. “Well, congratulations on your expenses going down 77%,” he said.

That’s not to say I’m skeptical of the new rules we must follow; I strongly support them. But I understand the risk universe is infinite and full of surprises, and we must be humble before it. The best the experts can do is urge people to take prudent steps to reduce risk to themselves and others. And the best the true believers in the Cult of the MBA can do, after crunching what data they have, is cross their fingers and hope the Black Swan lands someplace else.

Former Risk Manager at UC Berkeley, author of four books, ectomorphic introvert.

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