Doubt: Difference between revisions

At the heart of the commerce is ''[[trust]]'' and ''[[credit]]'': the expectation that one will ''[[be a good egg]]''. This is the ravishing beauty of [[laissez-faire]]: alone among polities it gets the alignment of [[Conflict of interest|interests]] right. It need not hope that actors are saints, or even that they will act out of public-spiritedness; indeed, it presumes they will not. The operating assumption of a market system is, “everyone for oneself.” ''There are no [[ally|allies]]''.  

Yet, through the magic of the [[iterated prisoner’s dilemma]], we are nonetheless incentivised to ''do the right thing'': the long-term payoff of repeated co-operation grossly outweighs the short-term bump of a single defection. We build not transactions, but relationships. Not ''goals of reward'', but ''systems of trust''. As they develop, relationships grow: the dinks and scuffs we sustain along the way toughen us. If we manage them well, our relationships grow stronger. Relationships are, in this way, [[anti-fragile]]. We must be vulnerable. We have to put ourselves at risk to earn a greater reward.

Relationships develop as ''markets'' develop, as ''technology'' develops, as ''competitors'' develop and as ''threats'' develop. Markets, technology, competitors and threats ''interact''. The landscape shifts. This is [[complex]], [[non-linear]] and [[unpredictable]]. We do not know where we are going. We cannot be [[certainty|certain]] about our future. A contract which tries, with infinite detail, to anticipate and codify the future ossified: it commits us to obsolescence. It entrenches ways of working which will become impractical. It ''blinds'' us to new ones which are resolutely better.  

This is exactly opposite to the optimal outcome. If there is a problem, ''get on the phone''. ''Talk''. Flex that relationship. ''Reinforce'' the relationship capital you have so painstakingly built. In a positive-sum relationship, each party’s best outcome is the other’s wellbeing. The longer they live, and the longer the relationship can last, the better for everyone. The value of the relationship to each side is a function of ''time''. This is ''logically true'': if a relationship has a positive value — any value greater than nil — then prolonging it is the best outcome. If the relationship has a ''negative'' value for either side, that side should end it now, regardless of its prognosis. Why wait?

Here, doubt is the best motivating factor; a lurch towards [[certainty]] the worst impulse. An unforeseen scenario presents you with a dilemma. How you react to it might affect your client. What to do? Do you ask your client, or just check the [[verbiage]] and, if the coast is clear, carry on?  

The correct answer, which will rarely issue from the lips of a [[legal eagle]], is, “well, why in God’s name are you asking ''me''? Shouldn’t you ask your ''client''?” For, really, what possible use can a clause your legal teams hammered out 10 years ago be in getting to the heart of the matter? If, now, your client would ''not'' like you to behave in this way, what difference does it make, to your ongoing relationship, that a 10-year-old document says that you ''can''? Or, for that matter, ''vice versa''?<ref>Much more likely will be that it ''won’t'' say that you ''can’t'', which doesn’t really help anyone.</ref>

In any case, isn’t that kind of doubt ''creative''; an opportunity to have a constructive conversation, which might lead who knows where? Here a ''surfeit'' of [[certainty]] leads to two bad outcomes: either a commercially damaging decision to disregard your client’s expectations, or an expensive, slow and clumsy way of seeking its permission, where a quick phone call might have done the job and led to other opportunities. Wheeling out your [[legal eagle]]s to “paper” an [[amendment]], however benign you might believe it to be, will arouse your client’s suspicions:  especially if, as inevitably they will, your legal team concoct five pages of dreary [[boilerplate]] to articulate it.<ref>Note here, recent efforts by the English courts to entrench the lawyer’s role in commercial negotiations through [[no oral modification]] clauses.</ref>

Ultimately, where there is ''trust'' between the counterparties, and their relationship stays healthy, all you should need is a [[cocktail napkin]]. Really robust legal advice should be designed to keep things, to the greatest extent, so that neither party feels the need for anything more.

If your relationship is such that you feel the need to go to your contract, you’ve already lost.

An aspiration of [[certainty]] is appropriate if you have a [[simple]] system. Certainty is the stuff of [[algorithm]]; of formal logic, of if-''this''-then-''that'' statements. Where you are ''certain'' you can deploy [[playbook]]s and [[runbook]]s, your machines and people run on autopilot and your contract is little more than a [[service level agreement|schedule of works]].  

This is the twilight world of diminishing margins where, as dusk falls, we scramble around collecting ever fewer pennies in front of the onward progress of the same, monstrous, [[Entropy|entropic]] steam-roller. The better, and more widely dispersed our technology becomes, the less return there is to make. There is no assured annuity from computerisation. Just ask Eastman Kodak, Sears or the people who made aerogrammes.

A world in which all outcomes are known is one where ''no-one wants to play anymore''.  It is fully priced. Margins are at zero. There is no surprise; there is no risk; all punchlines are known. It is a life of noughts and crosses and not [[chess]], much less bridge or poker.<ref>''Tic-tac-toe'' to you, my American friends. The same will, in theory, one day be true of [[chess]] and [[go]] — but the calculations are exponentially harder.</ref> At every point during the game there is an optimal move: ''including at the first move''. If the optimal move is a [[known known]] (as it is in noughts and crosses, but is not ''yet'' in [[chess]]) the game is ''solved'': ''there is no point in playing''. There is an answer. The risk/reward outcome is already priced: ''nil''. This is not a competition of wits, but of memory and data processing power. That’s certainty, and it isn’t interesting. Do not pass go; do not collect $200.

[[Complex system]]s are not like that. They are [[non-linear]]. They do not have pre-defined boundaries. There is no common set of protocols; there are no agreed rules. The ecosystem is in perpetual flux. It is filled with independent systems and agents making their own independent decisions, each one of which alters the contours of the landscape. ''Everything is liable to change''. In a [[complex system]], an [[algorithm]] will not work. It will get in the way. You need ''experienced experts'' who can make educated guesses and provisional decisions based on incomplete information. You need people who are flexible, adaptable, and smart. ''You need people who are good at handling [[doubt]]''. Doubt is not a regrettable externality: it is the ''essence'' of the value proposition. ''Doubt is risk''. Without doubt, there is no reward. We should not seek to avoid, much less eliminate doubt. We should ''seek it out''. The person who succeeds in commerce is the one who is best able to handle ''doubt''.