Predicting Uncertainty By Chris McClure | Contributing Editor
HEISENBERG’S INDETERMINACY PRIN- CIPLE, also known as the Uncertainty Principle, is foundational to those seeking to understand quantum physics. Albert Einstein believed that randomness reflects our ignorance of some fundamental property of reality, while Niels Bohr believed that probability distributions are fundamental and irreducible, and depend on which measurements we choose to perform. Einstein and Bohr debated the uncertainty principle for many years. Loosely interpreted, the uncertainty principle states that there is a higher degree of certainty in a specific loca- tion than there is in general. The uncertainty principle was developed as a part of the mathematical analysis of quantum physics. The debates regarding the validity of the principle continue to this day. Einstein’s position was that our failure to predict the outcome is based on our ignorance of all the facts. Niels Bohr, on the other hand, believed outcomes were perfect-
on the packers.“Those nasty packers are always colluding and manipulating prices. We have no power against them” – at least that is the type of commentary that is rolling through the industry currently.
Are packers perfect citizens out to make certain everyone gets a fair and equitable deal? No. Are they businesses caught in a storm of political and environmental tides that create volatility in the supply and demand for the product they produce? Yes. Our benevolent government is certainly not helping the situation with their rhetoric regarding the price of retail beef. It is still the bargain protein. The problem is that it is competing for those limited resources, which are being threated by rising healthcare costs, inter- est rates, inflation of all goods and services, and a rising call for the redistribution of wealth by young consumers who have been brainwashed into believing they are not receiving an equitable share of that wealth – the very consumers who often are making higher salaries than preceding generations ever dreamed of. I love to watch the murmuration of starlings. They appear almost like a smudge on the horizon or perhaps like a moving cloud of smoke. They move in a synchro- nicity that is amazing given the numbers involved. They are a fitting symbol for the way cattle producers move hither and yon to the whims of a handful of highly vocal and visible individuals who have little understanding of what truly drives the cattle markets. Ignorance and herd mentality seem to go hand in hand. The current volatility is not likely to fade quickly – in fact, I expect it to continue to grow in intensity and magnitude unless some miracle of common sense explodes within the minds of those influencers who use the megaphone of social media to fuel their agenda. It is frustrating. It is saddening. It is an indictment of our industry falling into the trap of the safety and security of government programs rather than the freedom of the marketplace. I fear the distribution of likely outcomes is exceptionally broad and frightening.
ly predictable within a dis- tribution that encompassed all potential values. Einstein aimed at precision whereas Bohr just needed a ballpark estimate. Economics is more in line with Bohr’s thinking. I chose the field of agricul- tural economics because of
IGNORANCE AND HERD MENTALITY SEEM TO GO HAND IN HAND.
the influence of a professor at Texas A&M. I didn’t know anything about it other than his recommendation that it would provide a broad foundation for whatever direction I might choose in my career. I found that it was a good fit and realized that I naturally thought like an economist. A perfect example was provided by my study habits. I re- alized quickly that a grade average greater than 89.5 was just as good as 100. Both resulted in the same outcome on my transcript yet the first might require a minimal amount of study while the latter might only be achieved through many hours of intensive application of my limited mental acuity. I found more desirable activities to fill those hours. After all, economics is the study of the allocation of limited resources among competing needs or desires. Time was the resource from which I sought to derive the greatest satisfaction. Now is a time of intense uncertainty in the cattle mar- kets. Those who get it mostly right will do well. Those who don’t still may do well but will feel cheated because they didn’t achieve what they felt they deserved. That failure often causes individuals to lash out with blame. Most frequently, in the cattle industry, the blame is placed
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