Inaugural Address

Dr. William T. Bogart

"Preparing Students for Uncertain Times"

11th President of Maryville College

Vice-chair Greaser, Chairman Ellis (in Portugal via live streaming video), Dr. Gibson, distinguished guests, and members of the Maryville College Board, staff, faculty, alumni, and students: It is a privilege to take my place today as part of Maryville College. As Dr. Gibson said in October 1993, in his address the last time we celebrated an inauguration, “I give thanks, acknowledging readily that this is certainly not my personal event, but one of the significant rituals in the life of the college…” So many people have done so many things for both me and the college that I could easily use up all my time thanking them. It was tempting to consider just saying thank you and naming as many people as possible instead of writing an actual address, but I will succumb only to recognize my family. Many of you already know my wife, Mary, and daughter, Elizabeth. Also here today are Mary’s parents, Jon and Cindy Denney, and my father, Carl Bogart. My mother, Barbara Elder Bogart, passed away in 2008 but is present in spirit. I want to mention briefly that perhaps one reason I feel so at home at Maryville College is that my mother’s ancestors, the Elders, were originally Scots Presbyterian. In fact, around the time that Isaac Anderson was founding Maryville College, the Elders were living in Pickett and Overton counties not far from here to the northwest.

Our Statement of Purpose claims that we "prepare students for a world of uncertainty and accelerating change" and I want to take the opportunity today to explore what that means. In particular, it gives me a chance to highlight how our emphasis on developing the whole person, both for growth in academic knowledge and in faith, is vital for preparing people to face the real challenges ahead. I'm an economist by training, so uncertainty has a particular technical meaning that I think is instructive. This is an institution of higher education, so I hope you'll bear with me as I tell you about that technical meaning and relate it to Maryville College's mission to prepare students.

Frank Knight is a name unknown to most people, but familiar to economists because of his association with the distinction between risk and uncertainty proposed in his 1921 book, Risk, Uncertainty, and Profit. Risk, according to Knight, represents measurable unknowns. For example, if one is flipping a fair coin, there is risk, as the result could be heads or tails with a 50 percent probability.

Uncertainty, though, is unmeasurable. Many, perhaps most, of the decisions that we make daily involve situations where probabilities of specific outcomes can't be quantified. To extend the example of flipping a coin, suppose that the coin had an unknown number of sides, some of which were heads and some tails. Given that information, how would you assess the probability of a head or tail coming up? While this example might be awkward, it captures the heart of the concept of Knightian uncertainty. In broader culture, the idea of uncertainty has surfaced under the term "black swan" popularized in the book of the same name (The Black Swan: The Impact of the Highly Improbable, Random House, 2007) by Nassim Taleb. Because humans are uncomfortable with uncertainty, he argues that we are both surprised when it manifests itself and that we construct explanations with the benefit of hindsight that reduce the uncertainty to risk.

The difference between uncertainty and risk is not strictly academic, as it has implications for how people behave – and how they should behave. Risk can be understood and sometimes reduced. The insurance industry is based on this idea, and Maryville College, unfortunately, has a great deal of experience with insurance, specifically fire insurance. Major fires have destroyed or seriously damaged buildings on campus including Carnegie Hall, Pearsons Hall (twice), and most recently Fayerweather Hall. Because the risks of property damage were understood by the college and because these risks could be quantified by insurance underwriters, we were able to rebuild all of the buildings I've named and they continue in use today.

Although risk can be addressed, it is important to realize that people are generally not good at dealing with risk. An important line of research in economics (that overlaps with psychology) is behavioral economics, which uses experiments to understand the ways in which people make decisions. When faced with situations of risk, there are predictable ways that people will deviate from the best responses. For example, the phenomenon of "anchoring" finds people leaning too heavily on the current situation as a prediction of the future or a gauge of what to expect as normal. The phenomenon of "framing" has people making different decisions depending solely on how a question is posed. And perhaps most worrisome, people tend to believe that risk is less than its true amount. When asked to indicate a range in which they expect outcomes to occur, people are usually much too confident that the outcome will occur in a narrow range, ignoring the possibility of chance or even their own ignorance. This phenomenon is not new. In the early Han dynasty (207 BCE – 220 CE), eight Taoist sages were invited by the king of Huainan to discuss what they had learned. Their teachings were recorded and compiled, and I will quote one appropriate excerpt now. "When the unexpected happens, the ignorant are surprised; knowers don't think it strange." (Tao of Politics edited and translated by Thomas Cleary, Shambhala Dragon Editions paperback, 1990, p. 60) To conclude, people look at risk in biased ways that often do not even recognize their true exposure to risk.

Uncertainty is different than risk. Before becoming famous for helping leak the Pentagon Papers, Daniel Ellsberg was a social scientist who developed an experiment that linked psychology and economics and highlighted the difference between risk and uncertainty. In the experiment people were given a choice of a risky situation and an uncertain situation that had less risk. Systematically, people chose the risky situation. As a classroom instructor, I regularly replicated this experiment with my students. His discovery is known as the Ellsberg Paradox, and it shows that people would rather face situations of risk than uncertainty, even at the hazard of magnifying some of the risk. Known unknowns are preferred to unknown unknowns, and as Taleb emphasizes in The Black Swan, people often want to retrospectively reduce the unknowns to knowns. In addition to this important finding, the Ellsberg Paradox illustrates the importance of close collaboration between disciplines and communication across disciplines – a hallmark of the liberal arts approach championed at Maryville College.

While experimental evidence in the relatively controlled setting of the laboratory is interesting, it is not sufficient to convince most people. Fortunately – although that's not really the right word – we have a prominent example of uncertainty regularly dominating the news. Anthropogenic climate change is a large scale long term set of issues that has, ironically, often generated more heat than light in public discussion.

The standard approach that economists use to analyze long term situations involving the future is cost-benefit analysis. The usual framework of such analysis is that it assumes that we know what the probability is for various outcomes, in other words that we are in a situation of risk. However, there are some fundamental uncertainties involved in the potential impact of climate change. In particular, the possibility of strong threshold effects where a small change in temperature leads to a dramatic shift in some other condition means that the standard cost-benefit analysis might not apply. As a result, much attention is focused on the possibility of extreme events and in understanding how uncertainty, rather than just risk, can best be mitigated. In an article discussing the Stern Review on the Economics of Climate Change, Harvard professor Martin Weitzman summarizes, "The basic issue here is that spending money to slow global warming should perhaps not be conceptualized primarily as being about consumption smoothing as much as being about how much insurance to buy to offset the small chance of a ruinous catastrophe that is difficult to compensate by ordinary savings." (quote is from the abstract on p. 703) (Weitzman, Martin. L. 2007. "A Review of the Stern Review on the Economics of Climate Change." Journal of Economic Literature, 45(3): 703–724) This conclusion does not automatically imply any specific government policy will be better than actions by private individuals – after all governments are elected by and composed of people. Rather, it implies that we should look for approaches that recognize with appropriate humility our limited ability to foresee all possible outcomes. As Weitzman says, "gathering information about [thicktailed] uncertainties representing rare climate disasters (and developing a realistic emergency plan were they to materialize) should be a priority of research." (p. 704)

While climate change caused by people is an important question, it is not the only complication caused by the fact that we deal with individuals rather than automata. Another influential economic thinker, Joseph Schumpeter, said, "Without committing ourselves either to hero worship or to its hardly less absurd opposite, we have got to realize that, since the emergence of exceptional individuals does not lend itself to scientific generalization, there is here an element that, together with the element of random occurrences with which it may be amalgamated, seriously limits our ability to forecast the future." (Thomas K. McCraw, Prophet of Innovation: Joseph Schumpeter and Creative Destruction, Belknap Press (Harvard University Press): Cambridge, MA, 2007, pp. 475-476, quoting Schumpeter regarding "The Personal Element and the Element of Chance: A Principle of Indeterminateness", part of the Walgreen Lectures that he was preparing to give in 1950, notes prepared in 1949)

And of course we return to the Bible. The book of James (4:13-14) reminds us that the future is always uncertain.

[13] Go to now, ye that say, To day or to morrow we will go into such a city, and continue there a year, and buy and sell, and get gain:

[14] Whereas ye know not what shall be on the morrow. For what is your life? It is even a vapour, that appeareth for a little time, and then vanisheth away.

In Risk, Uncertainty, and Profit (1921, Chapter IX, first paragraph), Frank Knight says, "We live in a world full of contradiction and paradox, a fact of which perhaps the most fundamental illustration is this: that the existence of a problem of knowledge depends on the future being different from the past, while the possibility of the solution depends on the future being like the past."

Again quoting from the masters of Huainan, "What is to be done for prosperity today, and what is to be done for justice tomorrow – this is easily said. What is to be done for justice today, and what is to be done for prosperity tomorrow – this is hardly known." (Tao of Politics, p. 60)

Despite this uncertainty, it is vital to move forward with faith, as the nature of uncertainty is that it is never completely resolved. In Julius Caesar, William Shakespeare gives Brutus something memorable to say on this subject. (Julius Caesar Act IV, Scene 3, 218-224)

Brutus:
There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.

Our mission statement begins with the phrase "Maryville College prepares students" and that has been the organizing theme of this week's celebration of the college. We conclude our mission statement by stating what we are preparing them for: "to search for truth, grow in wisdom, work for justice, and dedicate a life of creativity and service to the peoples of the world."

Creativity is inextricably linked to faith. As the author of Hebrews says (11:1), "Faith is the substance of things hoped for, the evidence of things not seen." When we create, we are bringing something to the world that was not seen before, something that we and perhaps others had hoped for.

This creativity is also inextricably linked to knowledge. In one of my favorite books, His Master's Voice, the Polish author Stanislaw Lem poses the question, what would happen if we received a message from another world and couldn't decipher it? The narrator introduces the story by including a criticism of how people often approach science, "acting like a child who thinks the names of the stars and planets are written on them, and that the astronomers read these off through their telescopes" (pp. 20-21, NY: Harcourt Brace Jovanovich, 1968 [translation 1983]) in order to introduce the theme that true research and discovery involve creativity. In senior studies, our students experience – the hard way – the process of discovery and as a result are prepared to succeed in whatever setting they find themselves after they leave. Faith and learning are complements and Maryville College will continue to thrive in its distinctive blending where both aspects of human development are taken seriously.

I requested one of the two songs that you've heard so beautifully performed by our choir. They sang "The Road Not Taken" and its message is clearly linked to the idea of preparing for a world of uncertainty. But that wasn't the song I requested. There are two reasons that I asked that "Ain't Got Time to Die" be sung today. The first is that it's been a favorite of my family since we discovered a version by the Maryville College choir on YouTube. The second and more important reason is that I don't know of another song that better describes the spirit of service I have found at Maryville College. Our students are not passively absorbing lessons here nor are they quietly going out into the world. Rather, they are passionately looking for ways to connect their experiences on campus with the world off campus while here in preparation for going forth to give "lives of citizenship and leadership" that bless the world.

Maryville College prepares students

For risk: by helping them gain knowledge and develop the habits of study that will lead to a lifelong ability to grow in knowledge

For uncertainty: by helping them gain wisdom (including the wisdom to distinguish risk and uncertainty) and by helping them to grow in faith

Our preparation of students will build on the same principles that have guided us in the past. The best preparation for the future is a liberal arts education, and that education must include a core curriculum that extends through all four years of undergraduate study. In addition to the breadth of preparation in the core, we will help students delve in depth into their major field of study. That depth will be reflected in high quality senior studies and also combined with breadth in demonstrating accountability as we do in our current system of comprehensive exams. Our students will benefit from engagement with area businesses in the form of internships and practica as we work together to build productive partnerships that enhance this region.

One activity we will soon engage in is the complete renovation of Anderson Hall, named for the college's founder and the oldest academic space on campus, constructed in 1870. Some of the earliest students to learn in that space said the following in the student newspaper of 1875: "it is not so much the amount of knowledge which we cram into our brains as the quality, and the manner in which it is kept; for if we fill our heads with a confused mass of rules, problems, dead languages and scraps of history, and do not keep them in order and ready for use, we are perhaps no better prepared for the duties of life than we would be had we never obtained that knowledge." (Maryville Student, 1875, via digital archives)

In Maryville College's first inaugural address delivered in 1822 (a microfilm version is contained in the mace that is carried at the head of all of our academic processions), our founder Isaac Anderson summarized why we must undertake a broad course of study. "The mind of man is incapable of examining, or even of forming a judgment respecting the extensive materials that are necessarily connected with the forgoing enquires, unless it is enlarged by a knowledge of grammar in general, of logic, metaphysics, natural philosophy, mathematics, natural history, and polite literature. These expand the mind, give direction to its energies, and furnish it with just rules by which every subject as to be examined is submitted to its inspection." Those words are as true today as they were almost two hundred years ago.

Maryville College has always been more than just an academic setting. Our students engage in a wide range of extracurricular and service activities, as they find their vocation not only in their profession but also in the ways that they connect with others. Our Faith and Learning Statement articulates this vital purpose. "The goal of a Maryville education is not simply the adoption of a particular stance or worldview, but rather the search for truth, wherever it may be found, and the ability to recognize and take seriously life's basic questions of faith, meaning and value." Let us study to develop knowledge and wisdom so that we can go forth prepared for a world of risk and uncertainty.

God bless you and God bless Maryville College.