How to deal with uncertainty

These days there's no shortage of things to keep you awake at night, wherever you stand on the political spectrum.

For some it's Britain's exit from the European Union. For others it's the prospect of Brexit being thwarted. For others still, it's whether the Chinese economy will hold up, what the outcome of the US presidential election will be or the risk of artificial intelligence taking over your job.

So what's the best way to handle the inevitable anxiety that goes hand-in-hand with all that uncertainty?

Will Borrell studied that anxiety up close after the Brexit vote in the UK earlier this year.

He manages a bar called Ladies & Gents which, as its name suggests, is located in a former public toilet at a busy junction in north London.

Before the vote, he says, things went very quiet. Then, on the evening after the shock decision to leave was announced, people came pouring back into his bar. Londoners, unlike most of the rest of the country, largely voted to remain in the EU.

"We're talking John Wayne at the bar," he told the BBC's Business Daily programme.

"You know, [saying] 'leave the bottle', like a cowboy. They were really going for it. It was Bacchanalian, end-of-the-world drinking."

This is not to suggest that hitting the bottle is the answer to quelling anxiety. Rather it's to illustrate that people are not very good at dealing with uncertainty, whether economic, political or otherwise.

The evidence is not just anecdotal. Studies have shown that, given a choice, people will opt for a definite electric shock now rather than the risk of a possible electric shock at some unknown time later. It seems that it's the not knowing that gets to us.

"It's known as ambiguity aversion," says David Spiegelhalter, professor of the public understanding of risk at Cambridge University, and president-elect of the Royal Statistical Society.

"People are much happier with known risks, when they know what the options are and what the chances are."

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That's where statistics come to the rescue. There is something very reassuring about putting a number on things and statistics can convert some uncertainties into measurable risk. It could be as simple as calculating the probability of rain tomorrow or the probability of surviving a disease.

But some uncertainties are subject to so many variables - those infamous "unknown unknowns" cited by former US Defense Secretary Donald Rumsfeld in 2002 - that they are by their very nature untameable.

"When it comes to the economy, when it comes to politics, when it comes to these really complex things, especially when you're operating against an opponent, it's very dangerous to delude yourself that you've tamed uncertainty and turned it into chance," Prof Spiegelhalter says.

Nowhere is that more true than in combat. In fact, it's often said that war is the realm of uncertainty, what's sometimes called the "fog of war".

So how do soldiers prepare for it? The man to ask is US Army Lt Col Steven Gventer who was in the eastern Baghdad district of Sadr City in Iraq during the siege of 2004, when Shia militia staged an uprising against coalition forces.

Even before our interview started, I got a sense of what his answer might be. Col Gventer was scheduled to speak to me from a recording studio in Germany where he's now stationed, and his side made us sound check the line twice in the days before the interview (slightly alarming for us journalists who are used to winging it).

"One of the things we try to do is to cut down on the number of variables that we don't understand or we haven't prepared for," he says. "To minimise the number of variables that might hurt us - or ruin an interview, as the case may be."

In effect, soldiers make a habit out of continuous preparation, and subordinates are trained to make decisions independent of minute-by-minute supervision.

In the end, it becomes so ingrained that they stage team debriefs even after the most innocuous occasions such as family-day army events. Nothing is left to chance and everything is part of the learning curve.

It's not a strategy the rest of us could readily emulate, but then we're unlikely to find ourselves in the midst of a battle grappling with life-and-death situations.

So where does that leave us with our more mundane uncertainties? Questions like: Will I lose my job? Will my marriage last? Will my children be happy?

Would we even want to know the answers? A life devoid of any uncertainty would surely be weighed down by monotonous continuity. Any author or film director will tell you that if there is no uncertainty, there is no story. It's uncertainty that keeps us engaged.

But stories, it seems, also serve another purpose, particularly when it comes to decision-making.

At the height of the financial crisis in 2007, Prof David Tuckett, director of University College London's Centre for the Study of Decision-Making Uncertainty, was researching how money managers made investment decisions in the midst of financial and economic chaos.

He found that their decisions weren't based solely on hardcore research and calculations, but also on the stories the money managers told themselves. They created a narrative around the outcome of their actions and convinced themselves about it.

"In effect, the narrative removed the reason not to do it," he says.

It's not just a quirk of money managers. Most of us script our own stories for everyday decisions from buying a house to where we choose to go on holiday.

What's key, Prof Tuckett says, is our state of mind when we do it and whether we allow ourselves to be guided by curiosity.

"Arrogance is the opposite of curiosity," he says. "So to make good decisions you really need to be someone who's willing to look at things that are difficult.

"And if you get knowledge or information that makes you feel uncomfortable, rather than run away, you need to pursue those doubts."

In an ideal world you'd seek out expert advice to lay those niggling doubts to rest.

Or if that doesn't appeal, you could always take your cue from the former UK Justice Minister Michael Gove.

In the run-up to the Brexit vote he declared that the public had "had enough of experts".

For more from Manuela and the Business Daily team, listen at 08:32 GMT each weekday on BBC World Service or download the podcast and check out episodes and programme highlights here.