Aug 22, 2012 — Ottawa writer Dan Gardner doesn't have much use for experts who forecast the economic future. He says their predictions are less likely to be correct than a coin toss. Betsy Kepes has this review of Gardner's new book, Future Babble.
We all would like to know the future. Talk shows and newspapers devote much time and space to the opinions of experts who are happy to tell us that the price of gas will go up, unemployment will go down, China will stumble and India will shine. Invest in this stock. Get rid of that one.
Unfortunately, these experts are the last ones we should consult about the future. After years of testing the opinions of almost 300 political scientists, economists and journalists, researcher Philip Tetlock found that, his words, the experts’ results would have been beaten by “ a dart-throwing chimpanzee”. Their predictions were no more accurate than random guesses.
Gardner releases this bomb in the introduction of his book and then spends over 200 pages telling us why experts do so poorly. He uses example after example of predictions gone wrong and introduces terms like confirmation bias, non-linear systems, and cognitive dissonance. It wasn’t fast reading.
It seems that humans are hard-wired to see patterns, even when they’re not there. And, as Gardner writes, “Once we form a belief, for any reason, good or bad, rational or bonkers, we will eagerly seek out and accept information that supports it while not bothering to look for information that does not.”
This is where the most expert experts fall down. People who have one core ideology and are absolutely sure it is right will be the least likely to make an accurate long-term prediction. In 1968, Paul Ehrlich was sure the world was coming to a terrible end and wrote of it in his book The Population Bomb. Julian Simon was equally confident that inventive humans would find solutions to scarcity so the more people on earth the better. Neither man would consider any information that contradicted his theory.
History proved both men wrong in their predictions but the charismatic certainty they both showed while on the lecture circuit and performing on TV drew in a huge number of supporters for both men. As Gardner writes, “confidence convinces”.
What are we to do if we can’t trust the experts? Gardner waits until the very end of his book to offer any ideas. Many of our “predictions” are very reliable, he says. When we cross the street at a red light, we predict all cars will stop. Linear systems, like the movement of the planets, are predictable. What we shouldn’t make predictions about, he writes, are “large-scale, highly complex, highly uncertain social phenomena over a long period of time”. Yet this type of prediction is a booming segment of talk shows and the book publishing industry.
Gardner doesn’t recommend putting our heads in the sand. At the end of a book packed with information (the bibliography is eight pages long), he writes “What all this means, very simply, is that accurate prediction often isn’t needed to make good decisions. A rough sense of the possibilities and probabilities will often do.”
Whew. That’s good to know.