Whimpers and Bangs

June 22, 2011

It has been a while, Dear Readers, and I apologize for the lapse in correspondence.  The past few weeks (really, months) have been pretty hectic.  Perhaps this has been a blessing in disguise, as I haven’t yet had a chance to succumb to the temptation to opine on the many reasons the World (as usual) is Ending. 

I have difficulty recalling any significant stretch of time where there haven’t been at least two or three imminent threats to civilization as we know it.  Right now, of course, we have the potential collapse of Europe, the potential descent of the Middle East into chaos (and not proximately because of Israel/Palestine this time!), and the potential nuclear meltdown of Japan, to name the first three catastrophes that come to mind.  This time last year, I think, the list would have been something like: fiscal oblivion in America, global warming, and loose nuclear bombs.  Thinking back through my lifetime in broad strokes, we had: the collapse of the global financial system, global food shortages, an inevitable and mutually destructive clash of civilizations with the Communists (i.e., China), Avian Flu, SARS, WMD and Islamist terrorism, the Asian and Russian financial crises, Ebola, the S&L crisis, AIDS, and of course another inevitable and mutually destructive clash of civilizations with the Communists (i.e., Russia)…

At some point there was talk of a giant asteroid destroying the planet.  Also, we’re probably going to run out of fish, farmland, and water in the next couple of decades.  If I spent more than fifteen minutes thinking about this, I could probably re-write “We Didn’t Start the Fire.”

My list of world-ending crises presumably reflects the sorts of issues on which I spend the majority of my intellectual energy: finance, geopolitics, health.  I’m sure there are others who worry about disasters on other fronts — for example, the erosion of the Traditional Family Unit and hence Civilization with all these gay people trying to get married willy-nilly, or the wholesale destruction of Human Dignity that might come from permitting informed end-of-life decisions for those who may want an alternative to becoming an exceptionally dignified (and collectively-subsidized) vegetable.

Perhaps I’ve become a bit jaded by the repeated failure of the World to End despite what seem to be humanity’s best efforts to push it there.  I’m reminded of the sport of ‘policy’ debate in high school, which when practiced poorly tended always to reduce to the question of whether the affirmative or negative position were more likely to lead to global nuclear holocaust.  Should the Federal government adopt a stimulus program?  Maybe so, because failure to stimulate the economy could lead to its collapse, which could lead to a resurgence of populist and nativist anger against those who are perceived to have stolen the American dream, which could lead to war with China as the world’s most prominent low-cost exporter, which could lead to global nuclear holocaust.  On the other hand, maybe not, because it could lead to unsustainable Federal spending, which could lead to a default on US Treasuries, which could lead to war with China as the largest holder of Treasuries, which could lead to global nuclear holocaust.  With so many policy decisions being made every day, it’s truly marvelous that civilization persists.

But I do remember how scary it looked from the front lines during the summer of 2008, when it seemed like one financial institution after another was destined to collapse.  It is easy to criticize in hindsight, as many pundits, politicians, litigators, and journalists have chosen to do.  We shouldn’t forget, though, that one reason the World hasn’t Ended just yet is that enough people throughout history seem consistently to make good-enough decisions under exceptional uncertainty.


On Tea Leaves and Other Good Reading Material

January 4, 2011

Forecasting the future is another exercise often undertaken at the start of a new year, particularly in domains with high stakes and short collective attention spans (e.g., business, financial markets, politics, technology).  Much ink is spilled and carbon dioxide expelled in the ordinary course of business on attempts to identify trends and recommend courses of action, but the arrival of a new year seems to give everyone a license to prognosticate.  Inevitably, some forecasts will be true, and this will reinforce our faith and comfort that the future is predictable (perversely, given that some will be false, and some will be true for the wrong reasons).

From the perspective of the ‘content producers’ who create for mass consumption, I’d wager that confident forward-looking speculation (generally) sells a lot better than the humble admission that the world is complex and dynamic.  Even among those commissioned to forecast, there is tension between explication (often trite, heavily disclaimed, or TLDR) and sensationalism (which focuses attention on low-probability, if provocative, possibilities) that I suspect usually favors sensationalism.  A good way to get on CNBC is to look sharp in a tailored suit and predict that some boom or crisis is imminent, or that some market price or datum will reach a level widely outside of the ‘consensus.’  But in other contexts, the balance certainly shifts: a good way to keep your career as a Fed governor is to persuade the world that the economy’s engines are humming along within normal bounds.  It is critical to consider the motivations of the person making a forecast, and those of the owners of the medium in which it is distributed, as part of one’s analysis.

There is a lot of evidence that we often overestimate our ability (as individuals in our own lives, and as professionals) to divine the future, and I predict that I will return to this topic often in future postings.  Nevertheless, I find obscenely long-term forecasts particularly enjoyable, at least in part because their authors generally admit to the futility of the exercise for any end other than intellectual self-gratification.  One delightful read was this set of predictions for 2011 that were made in the year 1931, which was linked from one of my favorite blogs.  I enjoyed another piece that purports to be a set of predictions about the year 2000 from an issue of Ladies Home Journal in the year 1900 (I have not seen this debunked, e.g., on Snopes, but I’ve not looked hard).  These are helpful prompts to consider the limitations of my field of vision, as I think about the data, assumptions, analytical tools, and states of the art that informed these brave conjectures.

Fiction has a proud history of envisioning possible futures (or, more accurately, possible realities) and I’d claim that one marker of ‘good’ fiction is that it gives us plausible accounts of how people would respond to social structures, technologies, climates, and the like, that are quite different from our own.  There is naturally some amount of prediction in such efforts, although it is usually neither explicit nor a primary goal of the author.  For instance, it’s pretty easy for us to assume that in a future where there exist gigantic starships, there will also exist gigantic-starship warfare.  (Perhaps this is because gigantic-starship-industrial complexes simultaneously emerge on a variety of planets, all of which need continuous conflict to keep the middle-class employed, the lower-class oppressed, and the political elite in power…?).  I don’t consider these forecasts of the same sort as those described above, but it would nevertheless be a fun exercise to consider the implicit assumptions in fiction (particularly science-fiction).  To the extent that these may have changed over time (and I’m not sure how you would measure this) they may reveal other cognitive biases we bring to our own visions of the future.