Predictions: The ones about the future are tricky
The price of oil will soar to $200 per barrel. A bioterror attack will occur before 2013. Rising food prices could spark riots in Britain. The Arctic Ocean will be ice-free by 2015. Home prices will not recover this year.
But who cares about any of those predictions– the world will end in 2012.
The media abound with confident predictions. Everywhere we turn, we find an expert declaiming on some future trend, concerning nearly every activity. Should we pay much attention? No, says journalist Dan Gardner in his wonderfully perspicacious new book, Future Babble: Why Expert Predictions Are Next to Worthless, And You Can Do Better. Gardner is previously the author of The Science of Fear: Why We Fear the Things We Shouldn't–and Put Ourselves in Greater Danger.
In Future Babble, Gardner acknowledges his debt to political scientist Phililp Tetlock, who set up a 20-year experiment in which he enrolled nearly 300 experts in politics. Tetlock then solicited thousands of predictions about the fates of scores of countries and later checked how well they did. Not so well. Tetlock concluded that most of his experts would have been beaten by "a dart-throwing chimpanzee." Tetlock found that the experts wearing rose-tinted glasses "assigned probabilities of 65 percent to rosy scenarios that materialized only 15 percent of the time." Doomsters did even worse: "They assigned probabilities of 70 percent to bleak scenarios that materialized only 12 percent of the time."
In this excellent book, Gardner romps through the past 40 years of failed predictions on economics, energy, environment, politics, and so much more. Remember back in 1990 when Japan would rule the world? MIT economist Lester Thurow declared, "If one looks at the last 20 years, Japan would have to be considered the betting favorite to win the economic honors of owning the 21st century." Thurow was far from alone. Back in 1992, George Friedman, now CEO of the geopolitical consultancy Stratfor, predicted The Coming War With Japan. Twenty years later, for those hungering for more predictive insights from Friedman, he has recently published, The Next 100 Years: A Forecast for the 21st Century.
As oil prices ascend once again, naturally many predict that the end of oil is nigh. Back in 1980, Gardner reminds us, The New York Times confidently declared, "There should be no such thing as optimism about energy for the foreseeable future. What is certain is that the price of oil will go up and up, at home as well as abroad." By 1986 oil prices had fallen to around $10 per barrel.
On the accuracy of oil price predictions, Gardner cites U.S. Foreign Service Officer James Akins, who said: "Oil experts, economists, and government officials who have attempted in recent years to predict the future demand and prices of oil have had only marginally better success than those who foretell the advent of earthquakes or the second coming of the Messiah."
Akins' observation was made in 1973, and it's as true today as it was then. Consider the 2008 claim made by analysts at the investment bank Goldman Sachs that oil prices could surge beyond $200 per barrel in as little as six months. In fact, in as little as six months, the price of petroleum had fallen to $34 per barrel.
When it comes to prophets, Gardner prefers foxes to hedgehogs. This is a distinction used by Tetlock, which was made famous by political philosopher Isaiah Berlin (who himself adopted an observation by ancient Greek poet Archilochus): "The fox knows many things, but the hedgehog knows one big thing."
Foxes are intellectual omnivores obtaining disparate information where they can. Hedgehogs, in contrast, fit all information into one central grand scheme that explains the operation of the world. "Hedgehogs are big-idea thinkers in love with grand theories: libertarianism, Marxism, environmentalism, etc.," says Tetlock. "Their self-confidence can be infectious."
As Gardner shows, foxes are a bit better at predicting the future than are hedgehogs. For example, environmentalist Paul Ehrlich is a perfect hedgehog. For more than four decades, he has maintained that everything important about the world can be explained by population trends. Back in 1968, Ehrlich notoriously predicted in The Population Bomb, "The battle to feed all of humanity is over. In the 1970s, the world will undergo famines in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate."
The famines didn't happen. And Gardner notes that the world death rate was 13 per 1,000 when Ehrlich wrote his book. Every decade since it has fallen and is now 9 per 1,000 people. "In two lengthy interviews, Ehrlich admitted to making not a single major error in the popular works he published in the late 1960s and early 1970s," observes Gardner. It is almost not too much to say that Ehrlich has never been right about anything that he has predicted.
And yet failed prophets like Ehrlich are almost never punished. In fact, pundits like George Friedman continue to be quoted by journalists, invited to appear on TV talk shows, and hired by corporate executives eager to see what the tea leaves say about the future. When caught, pundits emit squid-ink clouds of obfuscation harrumphing that they got the timeframe wrong, that it almost happened, or that an unpredictable exogenous shock derailed the forecast.
In any case, Gardner reveals the recipe for achieving success as a pundit: "Be simple, clear, and confident. Be extreme. Be a good storyteller. Think and talk like a hedgehog."
Besides making fun of the failures of the prognosticating class, Gardner also explains why so many of us keep falling for false prophesy: Humans beings hate uncertainty. Gardner offers myriad insights from research in cognitive psychology and behavioral economics that explains how and why we succumb to our desires for certainty. "Whether sunny or bleak, convictions about the future satisfy the hunger for certainty," writes Gardner. "We want to believe. And so we do."
In the end, I am tempted to adopt English soccer player Paul Gascoigne's pledge: "I never make predictions and I never will."
Downtown Charlottesville resident Ronald Bailey is the national science correspondent for Reason, the liberty-loving mag for which he wrote this essay.