Time and Uncertainty
Continuing with the topic of human action and entrepreneurship analyzed in detail in my two previous articles (We are all entrepreneurs I, and We are all entrepreneurs II) we shall discuss two crucial factors that are present in all the elements of human action: TIME and UNCERTAINTY; and how to better deal with them.
Time and uncertainty in terms of the ends, means, value, utility, scarcity, plan of action, and will, are always present. All elements of human action are subjective and time and uncertainty are no exception. This is, each person experiences them in a particular way, and, from this point, cannot be objectively measured. In other words, time as the actor subjectively
perceives it and experiences it within the context of each action; and the uncertainty that the future consequences of our actions inevitably hold.
Every person will experience time differently through the stages of human action, which are ends, means, value, utility, scarcity, plan of action, and will. Therefore, we do not refer to time in the deterministic, Newtonian, physical, or analogical sense. Objective time (chronological time) differs from subjective time and is a spatialized dimension that provides an analogy of the physical reality of movement (therefore the name of the analogical clock).
In the world of physics time is the fourth dimension, being a simple analogy of movement.
But let us infer a crucial characteristic of time as we consider it chronologically; this is that the future is already there, we just need to wait until the analogical clock points in that direction, or until the sun comes up again tomorrow. The future becomes an extension of the present; the future is “to come” or, even better said, “to return”. From this point, uncertainty is
Rather, we refer to subjective time and the uncertainty that comes with it. Subjective time is radically different from the objective one; it refers to the time each actor experiences as he acts and completes the stages necessary to achieve his ends; as he works through the stages he feels the passage of time. For instance, a person who is busy enough and has a complete agenda feels time passes fast; in contrast, someone who sits all day on the bed, staring at the white wall for hours, will feel time goes slowly. Another example is the memory of our childhood; as we were young and without many responsibilities, time seemed to freeze, but as we got older, grew a family, started college or obtained a job, time speeded up. The more
action we are involved in, the faster the time goes. Contrary to what happens in physics, chemistry or natural sciences, from this subjective point, the future is not there, is not given nor is to come, but to be made; and so, as expected, uncertainty comes to play again. The future is always uncertain, in the sense that it has yet to be built.
Then how do we make the future and how do we deal with the inevitable uncertainty of it?
Firstly, through expectations reflected in previous actions. In this way, the past experiences stored in the actor ́s memory continuously fuse in his mind with his simultaneous and creative view of the future in the form of mental images or expectations. This future is never determined, but instead, the actor imagines and creates it step by step. The experience of
recalling the past is qualitatively the same as the experience of imagining the future.
Expectations are creatively recombined memories projected into the future. For, the actor has certain ideas, mental images, or expectations which he hopes to realize via his action and interaction with other actors.
Secondly, the future is open to all of man ́s creative possibilities, and uncertainty can be reduced through behavior patterns of action of his own and others (institutions); and through the alert exercise of entrepreneurship. Institutions and entrepreneurship help us reduce the uncertainty of the future. The latter helps us in the sense that, by trying to achieve our ends, we tend to approach the future; if we would not care about our ends and would not move a finger to accomplish it, the future would be even more uncertain. In other words, it is better to make the future through our actions via our attempts to achieve our objectives.
Herefore, entrepreneurship reduces uncertainty (yet another benefit from it). The former concept, institutions, are patterns or rules of behavior human beings follow to achieve their ends.
Institutions emerge spontaneously and evolutionarily from practical knowledge generated via entrepreneurship over the course of history by a huge number of people. These institutions are, for example, money, language, law, morality, justice, among others. Economies that have sound money, which does not lose value over time; that have simple, fixed and predictable laws and regulations; that have sound economic policies, such as fiscal and monetary; and that have political stability, tend to perform better.
Therefore, societies that reduce more efficiently and effectively the uncertainty of the future (though not eliminating it completely since it is not possible) and that deal better with the element of time through expectations, institutions, and entrepreneurship, are more prosperous
because they make the whole system more dynamic, systemically and systematically speaking. This is, societies that encourage entrepreneurship and that have sound institutions are more developed since they deal better with the future (time) and the uncertainty that comes with it.