Futurology

In my last job we worked with a futurologist. She was scatter-brained and Canadian and it was easy to make fun of her field. Boy, we got laughs with our Marty McFly / Doc Brown jokes. Hoverboards anybody?!


But, it’s confession time.  I am continually reminding myself of her principles when I see someone talk about what is definitely going to happen. 

Now, the lady I worked with didn’t actually refer to herself a futurologist. Her business card said Strategic Foresight Consultant. And her methods involved no crystal balls, no constellations, no lines on palms, and nearly no scattered entrails. But the goal was much the same as the gypsy lady’s – to figure out what the future would bring.

The first and most important point was that she adopted the mantra that ‘there are no facts in the future.’ Looking at the future is like playing poker. There’s a set of alternatives. Some are probable, some less so.

The probability space is imagined as a ‘cone of uncertainty’. Imagine we are at the mouth piece of a trumpet. In the next second, the probable set of outcomes is only slightly broader than the present. As time passes, the trumpet flares, to encompass a wider and wider range of outcomes. Nearer the edges of the cone are the low probability outcomes – meteor crashes, extra-terrestrials, a good Transformers movie.

The cone implies that we’re actually unlikely to get any one high probability ouctome. The aggregate of the chances of the low probability outcomes is large. Futurologists are big on what they call ‘wildcards’. There’s a lot of outcomes that depend on big unexpected turning points. Think tsunamis, global financial wobbles, planes crashing into tall buildings.

The most famous futurologist is a financial philosopher called Nassim Nicholas Taleb. He argues that people are stupid. An accusation I resent! But am forced to concede. 

He decries most projections, forecasts and expectations as being based on extrapolating the present. His most famous book is called ‘The Black Swan: The Impact of the Highly Improbable‘. (Europeans believed that all swans were white. When Australia’s black swans were discovered another tiny nail was hammered into the coffin of argument by extrapolation. )  

His first book was Fooled by Randomness where he echoes some of the points I made on Pareidolia just the other day.

Taleb’s argument is that the history of the world is shaped by the breaks, not the continuities. He advocates adapting to randomness.

He put his money where his mouth is and predicted the 2008 stock market crash on the basis of the logic of his book. According to the Wall Street Journal, his firm made returns in excess of 65 percent in August 2008 with a fund called ‘Black Swan Protection Protocol’.

An interesting side note is that because of his fear of extrapolation of social characteristics, Taleb considers sociological experts over-rated to the point of being dangerous, and has called for the Nobel Prize in Economics to be scrapped, for fear of encouraging them.

The exciting part of the science of prediction is trying to figure out where the big important discontinuities are going to come from. In hindsight, the big breaks were preceded by indications. These are called weak signals.

All major social trends have weak signals as leading indicators:

The internet was foreshadowed by the Department of Defence system it sprang from. Islamic terrorism existed long before 9/11. But there were lots of defence technologies kicking round in the 70s. And lots of crazy terrorists.

Selecting which of the zillions of events are fads and which are destined to develop into something more is, of course, extrapolation. It gets tricky.

Futurologists have another trick up their sleeve, which they call backcasting. This is imagining possible futures, and figuring out in each case what needs to be changed to get there. This is their slogan : “The best way to predict the future is to create it.”

So if you’re inventing a better beercan, or protesting against climate change, or trying to make your own country, your efforts to produce the future are the weak signals that futurologists are trying to separate from the noise of everything else.

Here are Taleb’s top ten tips for adapting to randomness and making it into the future. Let me know what you think!

1 Scepticism is effortful and costly. It is better to be sceptical about matters of large consequences, and be imperfect, foolish and human in the small and the aesthetic.

2 Go to parties. You can’t even start to know what you may find on the envelope of serendipity. If you suffer from agoraphobia, send colleagues.

3 It’s not a good idea to take a forecast from someone wearing a tie. If possible, tease people who take themselves and their knowledge too seriously.

4 Wear your best for your execution and stand dignified. Your last recourse against randomness is how you act — if you can’t control outcomes, you can control the elegance of your behaviour. You will always have the last word.

5 Don’t disturb complicated systems that have been around for a very long time. We don’t understand their logic. Don’t pollute the planet. Leave it the way we found it, regardless of scientific ‘evidence’.

6 Learn to fail with pride — and do so fast and cleanly. Maximise trial and error — by mastering the error part.

7 Avoid losers. If you hear someone use the words ‘impossible’, ‘never’, ‘too difficult’ too often, drop him or her from your social network. Never take ‘no’ for an answer (conversely, take most ‘yeses’ as ‘most probably’).

8 Don’t read newspapers for the news (just for the gossip and, of course, profiles of authors). The best filter to know if the news matters is if you hear it in cafes, restaurants… or (again) parties.

9 Hard work will get you a professorship or a BMW. You need both work and luck for a Booker, a Nobel or a private jet.

10 Answer e-mails from junior people before more senior ones. Junior people have further to go and tend to remember who slighted them.

timesonline

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thomasthethinkengine

Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

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