Keynesian Uncertainty

Keynesian uncertainty is the radical kind — distinct from risk, where probabilities can be calculated. 'By uncertain knowledge,' Keynes wrote in 1937, 'I do not mean merely to distinguish what is known for certain from what is only probable. The game of roulette is not subject, in this sense, to uncertainty... The sense in which I am using the term is that in which the prospect of a European war is uncertain, or the price of copper and the rate of interest twenty years hence, or the obsolescence of a new invention. About these matters there is no scientific basis on which to form any calculable probability whatever. We simply do not know.' The distinction demolishes any model that claims to predict genuinely novel outcomes — and exposes the specific blindness of large language models trained on historical frequencies.