2000s >> 2006 >> no-1225-september-2006

Pathfinders: Odds Uneven

  The Centre for Economics and Business Research is predicting that there will be a million millionaires in Britain within a decade, leading to a bonanza in economic growth, marketable wealth and house prices (The Business, 13 August). “The thinktank is forecasting a 71 percent rise in house prices over 2006 to 2020…” Whoa, whoa, stop! Stop right there. That’s it. Enough predictions already. There is something fundamentally wrong with this sort of news reporting, even though the papers are full of it and we base our lives on it.

 Whether it’s future prosperity, the price of oil, life on Mars, England’s chances in the next World Cup, the winner of Big Brother XXXXVIII, or tomorrow’s weather, the only really reliable prediction that anyone can make is that the predictions will probably be wrong. And there is a good reason why that is.

 Statisticians refer to ordinary random events, such as the exact number of cornflakes that fall in your bowl, or the precise time that your bus turns up, as Type 1 events. The randomness of Type 1 events tends to disappear when you average them out over time, which means that they are measurable, and thus amenable to prediction with an acceptable margin of error. You can predict that your bus will turn up at exactly 8.31 if that’s what it does on the average, and you won’t be far wrong.

  But applying this predictive logic to complexities like the climate, science, the future or the economy just doesn’t work, because when you introduce greater levels of complexity, or even if you extend the time frame, you inevitably introduce Type 2 events. A Type 2 random event is a unique incident which it is not possible to foresee, and one which can cause seismic changes in the daily routine.

 Being run over is one such event, as is a lightning strike, a win on the lottery, or falling in love. There is no mechanism for predicting such events because the margin of error would be laughably gigantic, and history is littered with unprecedented events, such as the telephone, the computer, the internet, AIDS, economic crashes, and many wars. History, the economy, and society, are crammed with so many Type 2 random events, argues the statistician Nassim Nicholas Taleb, that it is sheer self-indulgent folly by anyone, government politician or horizon-tech scientist, to imagine they can predict anything at all (New Scientist, 1 July). Worse, he says, we are not smart enough to realize how dumb we are, and we – or rather governments – persist in basing all kinds of plans and policies on these bogus social predictions, sometimes with disastrous effects.

 So why do we like to imagine that the world is a predictable place, even though we walk about with expressions of amazement permanently pasted to our faces? The explanation, he thinks, is that we can’t stand randomness, so we try to create meaning out of randomness by revising the past with invented and deterministic narratives. Instead of admitting that, ‘bugger, we never saw that coming’, we pretend that ‘all the signs pointed to this happening, it’s obvious with hindsight’. We comfort ourselves with our own cleverness, after the event, forgetting that we were jumping like jackrabbits just before it.

 This may sound like another application of that popular game of applying the logic of one scientific principle to fields outside its domain, in this case chaos theory. However there are useful nuggets to be mined from this perspective, especially by socialists.

 One is the undoubted fact that capitalism does indeed represent itself as a stable and predictable process when in fact it isn’t, and that people need to be aware of the illusion of permanence in which it wraps itself, like the Emperor’s new clothes. If people understood that social change could be minutes, rather than millennia away, the motivation to get up and do something might be a lot stronger in a working class presently browbeaten into submission by the weight of history and the endless blank horizon of the present.

 The other point relates once again to Pathfinder’s own favourite theme, which is the easy assumptions that scientists themselves often make, especially in fields outside their own area of expertise. Are wars really Type 2 random events, ‘black swans’ so bizarre and unexpected that they boggle the mind as they appear out of nowhere? Do we really overlay an essentially chaotic world with a veneer of rationalized narrative, merely to comfort ourselves that there is an underlying logic when in fact there is none? Physicists have wrestled for years with the desperate and intractable problems of uniting all the known laws of cosmology and quantum mechanics under one roof to create a single, elegant Theory of Everything.

 They clearly believe that there is an underlying logic, even if they are buggered if they know what it is. Meanwhile in the external earthly realities of economics and social change we are expected to heed the post-modernists and the chaos statisticians, and abandon any thought of a grand narrative, an intrinsic pattern that makes sense of much, if not all, that goes on around us.

 In fact, when you look at it like that, far from being a scientific proposition, this appeal to chaos seems like an unhealthy invitation to return to a world where gods and goblins roamed the earth and ideas of social progress could not begin to gain a foothold. If scientists believe that the great developments of history, both bad and good, were entirely unpredictable and that the human condition is a random cacophony of the cosmic absurd, Pathfinders suggests that they have been spending altogether too long staring down the microscope, and ignoring the elephant standing in the room next to their elbow.

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