When Donald Trump stood on the White House lawn in April 2025 holding a large, laminated poster announcing the first round of trade tariffs to be imposed on different countries, the Trade Policy Uncertainty Index shot through the roof.
Author
- Ian Scoones
Professorial Fellow, Institute of Development Studies
Every month, this index , which is overseen by five board members of the Federal Reserve (America's central bank), crosschecks the frequency of usage of terms relating to trade policy and uncertainty in seven leading newspapers including the New York Times and the Guardian. Here's the chart since 1960:
US Trade Policy Uncertainty Index:
Trump's so-called "liberation day" sparked volatile shifts in the value of financial products and currencies as governments across the world scrambled to respond. The levels of uncertainty were unprecedented - the outbreak of the COVID pandemic was nothing in comparison, according to the index.
In highly complex systems, conditions of uncertainty and even ignorance - where we don't know what we don't know - are extremely common. These conditions become even more likely when such systems, such as those which control global finance, are opaque and poorly regulated. Add in a maverick US president and an administration determined to overturn the status quo , and the old, orderly assumptions are thrown out of the window.
Uncertainty is where we don't know the likelihood of different things happening: we can't predict, we can't manage, we can't control. For many people, conditions of uncertainty result in precarious jobs, insecure housing and rising inequality. Vulnerabilities including mental illness can become even more exposed when life is so uncertain - only serving to accentuate these perceptions of uncertainty .
However, for a lucky few, uncertainty is an opportunity to make a fortune. Financial capitalism thrives off uncertainty and asymmetric information, which may be encouraged by some who can pocket the profit, betting on the unknowns.
In politics too, uncertainty is being capitalised on. Rising economic precarity in the wake of COVID-19 has been linked with increased support for populist parties in many European countries. And this nationalist politics sweeping much of the world reduces the possibilities of transnational collaboration and multilateral regulation.
The Insights section is committed to high-quality longform journalism . Our editors work with academics from many different backgrounds who are tackling a wide range of societal and scientific challenges.
There are real and present dangers in this age of uncertainty. But through my research at the Institute of Development Studies , I have witnessed inspiring innovations that I believe could be applied across other fields of work and life. My latest book, Navigating Uncertainty: Radical Rethinking for a Turbulent World , explores the strategies used to counter uncertainty in fields as seemingly different as corporate finance and pastoral farming, in settings stretching from southern Zimbabwe to the Midlands of England.
The book highlights some surprising commonalities between these different worlds in their use of diverse sources of knowledge, social networks and human interactions. Above all, I believe the loss of the central role of people in today's complex systems is the greatest danger of all.
Uncertainties of global finance
The 2008 financial crisis can be explained in part by a lack of such human engagement, and the reliance on a trading system where the assumption of control turned out to be highly misleading.
The international financial system involves a multitude of players, each with different sorts of information about the future. In the build-up to the crisis, many new financial instruments were devised to extract profit. The investment banks - Goldman Sachs, Merrill Lynch, Morgan Stanley - perfected the art of managing the huge amounts of cash generated in the financial system through a range of derivative instruments, including the fateful mortgage-backed securities that triggered the crash. But the bewildering array of acronyms and actors involved meant few actually understood the system and its dynamics.
At the centre of this complex web of financial interactions were mathematical models designed to offset uncertainty and provide control. The notorious Black-Scholes-Merton equation helped manage the transactions that were occurring in ever greater volumes and super-fast speeds, with billions of dollars being exchanged in nanoseconds across high-speed internet links.
However, when you are overly confident in risk-based models within a narrowly defined regulatory system, uncertainties have the nasty habit of creeping up behind you and catching you by surprise. As Andy Haldane, then chief economist at the Bank of England, commented in the aftermath:
The financial cat's-cradle became dense and opaque. As a result, the precise source and location of underlying claims became anyone's guess. Follow-the-leader became blind-man's buff. In short, diversification strategies by individual firms generated heightened uncertainty across the system as a whole.
The crisis was rooted in what Haldane called "an exaggerated sense of knowledge and control". Since then, there has been much reflection on what went wrong and what to do about it. One response has been to add new layers of regulation, but many argue that this may just hide the underlying uncertainties, as happened before.
The financial system was ill-equipped to respond to the shocks that emerged from the sub-prime mortgage collapse, and precious little appears to have changed since - as was demonstrated so vividly following the announcement of Trump's tariffs.
Today's financial system is increasingly reliant on algorithmic models to make decisions, driven by even ever more sophisticated AI applications. The large language machine learning models take accumulated past data to predict the future - but as well as increasing opacity , there is a decrease in accountability. AI offers an illusion of control, and this can be very dangerous.
The reality is that conditions of uncertainty are not unusual, freak occurrences, but the normal consequences of complex systems. So what if the standard assumptions of modernity - planning, management, regulation, control - have to be radically rethought? Is it possible to embrace uncertainty for the benefit of all - rather than denying or ignoring it until it is too late?
For financial systems, Haldane and others have argued that this means rethinking financial network configurations and enabling new practices (requiring new skills) for those involved. A shift from reliance on opaque and highly complex risk-based model algorithms to allowing more human discretion and judgment. Active deliberation on the appropriate responses to inevitably incomplete information in a world where uncertainty, even ignorance, is not only accepted but embraced.
Where can we look for inspiration? I'd suggest that the pastoral systems of northern Kenya and Amdo Tibet in China are good places to start. In both settings, pastoralists - mobile livestock keepers - must manage highly variable climates, and volatile market conditions alongside conflict and political uncertainties to keep their animals healthy and provide for their families. Like the global financial system, pastoralists trade across borders, manage highly variable supply and demand, and interact across networks in real time.
During my research with Kenyan and Chinese colleagues in both places since 2018, we have been struck by how pastoralists expertly live with, and benefit from, uncertainties . I believe that this offers some important lessons for elsewhere in the world - including its centres of global finance.
Livestock markets in northern Kenya
Meet Mohamed Hassan, a livestock trader from Moyale in northern Kenya on the border of Ethiopia. He manages a large and fluctuating trade in livestock - cattle, camels, goats, sheep - buying from producers, dealing with brokers and transporters, and selling animals on to terminal markets in Nairobi and further afield. He explains:
I have connections all over this region and buy cattle from as far as Garissa and Moyale [in Kenya], even Somalia. I transport cattle on trucks and sell on to customers in Nairobi. I also buy up small stock in bush markets around here, and sell to other traders in nearby areas for sale in local towns.
The pastoral areas of the Horn of Africa - from Somalia to Ethiopia to Kenya and beyond - are the centre of a massive international market in livestock. Estimates vary, but each year around US$1 billion in trade in live animals passes through the ports along the Somali coast destined for the Gulf countries, notably Saudi Arabia.
This is an internationalised, cross-border market affected by multiple uncertainties. It requires considerable financing, sophisticated coordination and complex governance arrangements. It operates almost completely informally outside the grip of state regulation and taxation, yet in a highly sensitive geopolitical arena.
Central to this complex international market is a network of traders and brokers who source animals from diverse locations across pastoral regions and organise their transport to and subsequent sale in terminal markets. This requires a great deal of collective skill by traders like Hassan, galvanising different knowledge, connecting people and negotiating trade in real time.
This includes negotiating with border police, customs officials and veterinary officers. One of the key features is the willingness of all parties to accept that the entire system requires a deliberate maintenance of ambiguities around regulation to ensure the flexibility of movement when official rules would prevent it.
Brokers - intermediaries in the system with knowledge of the whole network - are relied on by the traders for knowledge about conditions in production areas, prices in different places and connections to markets. They operate in multiple languages and can link producers and traders, measuring livestock weights, recommending prices and preventing fraud.
Connected across far-flung areas, they use kinship and cultural connections to build trust between market players, facilitating effective trade. By offering knowledge, credit and informal insurance, they smooth the operation of the market, reducing sources of uncertainty. Collective arrangements for trading animals also diminish risks and enhance capacities for financing and transportation.
Such markets are always social, connected by trust-based relationships frequently over long distances, but with the end result being an efficient, effective market that can respond to multiple shocks - whether trade bans, price volatility, insecurity or drought.
Unlike with global finance and its addiction to predictive algorithms, the web of interactions between actors in this market are based on close connections among kin and clan groups, rooted in sustained social relations. Facilitated by increasingly robust mobile-phone coverage enabling rapid and secure money transfers, the system is remarkably effective given the volume of exchanges in this informal cross-border trade.
In contrast to contemporary financial systems, this is a system where networks of people keep a close eye on any potential failure, and respond in real time. Uncertainty is accepted, not dismissed or ignored. Informality means that a rapid response to changing circumstances is possible, with everyone contributing to generating reliability. The "human touch" is always present, and there is no opportunity for the system to collapse.
Studies of these livestock markets have highlighted differences between "long" and "short" market chains. While the former are run mostly by men, short market chains are more local, more embedded in local social relations and involve more women, particularly in the sheep and goat trade.
As uncertainties increase, it is these shorter, more locally managed chains that can adjust most rapidly. A much more variegated pattern is emerging, replacing the "big man"-dominated long chains of the past. With more players connected in networks through more diverse and decentralised social relations, the capacity to respond to uncertain events increases.
All this may seem very far from the challenges of global finance, but I believe there are important lessons to be learned. Livestock markets are similarly non-linear and complex, operate internationally and have limited formal regulatory control - yet they remain firmly embedded in social settings. A more social basis for "the economy" and "the market", rooted in collective, networked responses, is apparent, where responses to uncertainty are central. This contrasts with the idealised image of an individualised, risk management response promoted in mainstream finance and banking systems,
The livestock markets of northern Kenya are facilitated by personal, culturally imbued interactions, while also using technologies that support the efficient and rapid flows of money and information. It is the human touch, involving a range of networked social practices, that is central to grappling continuously with uncertainties.
Buddhist herders in Amdo Tibet
Next, meet Loba Tsering from Dreinag village in the north of Kokonor, in the high pastures of Amdo Tibet, China. Like Hassan, he and his family must navigate many uncertainties. Heavy snowfall and an extended winter can wreak havoc with herding arrangements as people move yaks and sheep from winter to summer pastures at altitudes in excess of 4,000 metres.
Access to land, particularly for winter grazing by Qinghai lake - China's largest - is increasingly constrained, as land along the lakeshore is divided up, privatised and acquired for tourism development and conservation projects. Markets for yak meat, as well as milk, butter and cheese, are expanding in the lower altitude areas as towns grow and lakeside tourist resorts are established, but in this volatile context new market connections must be found.
Uncertainties are accepted as part-and-parcel of life. As Tsega Norbu, a 40-year-old herder and father of three from Darnama village in the south of Kokonor, explains: "What happened is already in the past, and what is going to happen is unpredictable. All we can depend on is the present, we deal with what is happening now."
Uncertainty is central to a Buddhist sensibility governing life. The world cannot be stable and controlled, but is part of a cycle of ongoing change. According to Tibetan Buddhist teachings and practices, uncertainties from whatever source - climatic, economic, political - should never be feared. They are part of how knowledges and experiences are constructed.
Unlike the anxiety and stress that uncertainties may create amid the western ideal of an ordered, regular, stable world, for Loba Tsering and others, there is no such expectation of a linear path. The assumptions of western-style modernity are fundamentally challenged.
But this doesn't mean that they reject the trappings of a modern life. Mobile phones and internet connectivity, reliable off-grid electricity, functioning transport infrastructure, good healthcare, education for children and commercial market interactions are all crucial for pastoralists living in Kokonor. But these are integrated within an outlook that makes use of ambiguity and embraces uncertainty as part of daily life.
This requires particular skills for generating reliability which, just like for Mohamed Hassan and his fellow Kenyan traders, involve relying on social relations and networks. But in contrast to northern Kenya, where state presence and regulation is limited, in areas such as Kokonor there is much more interaction with state officials and government investment projects. This has implications for how uncertainties are navigated.
Infrastructure development continues apace in Amdo Tibet, with the Chinese state investing in large settlement programmes alongside road and rail infrastructure and conservation projects to protect watersheds . While Amdo Tibet remains a largely rural and very mountainous area, land access is always contentious as different actors - local people, investors, the government - compete for control. This generates heightened uncertainties for pastoralists. However, despite the increasing state presence, whether through local county officials or national-level projects, there is always room for manoeuvre.
Loba Tsering and others make use of this latitude to navigate within often ambiguous, hybrid arrangements around market or land access. Policies coming from the centre are never specified in detail, but provide guidance around broad objectives set by the Chinese state.
This approach to navigating uncertainty is what the Singaporean political scientist and author Yuen Yuen Ang calls "directed improvisation" . It provides a route to responding to complexity and uncertainty that allows flexibility and the possibilities of adaptation, avoiding top-down imposition. It is a combination of central facilitation and local innovation - one that makes use of ambiguity and thrives off uncertainty.
So, for example, when Loba Tsering and other villagers wanted to secure land for winter grazing to fatten their animals for sale to nearby markets, they had to exploit this flexibility and navigate the uncertainties. Their original winter grazing sites had shrunk, both because of encroachment of urban areas and expansion of the lake, due to increasing snow melt thanks to climate change. This meant that land was scarce and their opportunities for livestock marketing had declined.
First, they approached the local township officials to put their case. They were already connected with some officials who came from the same village, so conversations could start easily. Working together with these representatives, they then approached the county officials.
Although there were limits imposed by central state policies due to environmental regulations and plans for a conservation area, a creative, improvised solution was found through dialogue and deliberation. A two-year compensation for the loss of the winter pasture was offered, and a new area allocated for the landless pastoralists in the village. This ensured their animals could be fed and fattened, allowing new marketing opportunities in the fast-growing nearby towns and tourist resorts.
This was "directed improvisation" in action, with solutions being found that responded to changing circumstances. It is not an isolated example but, as many have commented before, central to the style of centralised-yet-flexible, pragmatic policymaking that China has adopted - an approach that has been central to its rapid economic transformation and poverty reduction following the reform era.
In a highly complex system with many different requirements and operating across a vast geographic area, a singular, designed solution rolled out from the centre clearly will not work. Rather, an approach to economic change that is responsive to uncertain conditions is required, with flexible institutions and governance systems - very unlike the fixed regulatory protocols of global finance.
No standardised blueprint model of either design or regulation will work. Solutions must allow for experimentation and improvisation, and be built on social relations where trust is essential. Once again, it is the human touch that is key.
Rethinking an uncertain world
Despite the very different contexts, the experiences from northern Kenya and Amdo Tibet in China offer some important insights into how to navigate uncertainty in our turbulent times. Could such insights help us avoid the chaos and collapse we saw during the financial crash and following the imposition of Trump's tariffs? Interestingly, the principles that emerge are similar to those suggested by Haldane and others following the 2007-08 financial crash.
What does this involve? The need to decentralise and rely on social interactions in localised networks. The need to avoid reliance on simple, centralised solutions, whether from algorithmic or state diktats. The need to be careful about relying on top-down imposition of regulations, and to seek adaptive, flexible solutions. The need to develop collective options based on trust-based relations - avoiding either an atomised, individualised response or one emerging from a centralised, dirigiste imposition.
Above all, it highlights the need for the human touch - the social, networked relations that are only possible to develop when people interact with each other and build trust.
What does this suggest for the future? A modernist vision of control - whether through markets or states - towards a singular understanding of progress is clearly inappropriate. Instead, a more flexible, adaptive path is required. This means opening up to alternatives, decentralising activities, facilitating experimentation and improvisation and accepting uncertainty.
Embracing uncertainty and encouraging democratic deliberation is also a route to avoiding the future being captured by those who seek to profit from uncertainty, or who seek to close down options through the populist rhetoric of "taking back control".
Whether responding to a financial shock, new technologies, land use change, a pandemic or the climate crisis, this requires - as in citizen assemblies and other forms of deliberative democratic practice - diverse people interacting and building trust for collective responses. AI and predictive mathematical models are no replacement in our current age of uncertainty.
For you: more from our Insights series :
Could digital currencies end banking as we know it? The future of money
Welcome to post-growth Europe - can anyone accept this new political reality?
To hear about new Insights articles, join the hundreds of thousands of people who value The Conversation's evidence-based news. Subscribe to our newsletter .
Ian Scoones was a recipient of a European Research Council Advanced Grant for the PASTRES project - Pastoralism, Uncertainty and Resilience: Global Lessons from the Margins ( https://pastres.org/ ). He is the author of Navigating Uncertainty: Radical Rethinking for a Turbulent World (Polity Books, 2024, https://bit.ly/44f9sqe ).
