Imagine you can choose to have a special mental ability. Predicting the future and influencing other’s behaviour might be two of the best ones out there. Ditching the behaviour one out, how possible is it for humans to predict the future to any extent, and if it’s not possible, why are there so many people talking about “what’s going to happen” so often?
By “prediction” I mean any type of future forecast, the Merriam-webster dictionary defines prediction as “a statement about what will happen or might happen in the future”. This encompasses a lot of content and there are some exceptions to the rule of which I’ll speak as well. My main focus on this short article will be regarding my belief that we, humans, are totally incapable of predicting the future and whenever we seem to be able to do so, it is more because of probability (call it luck) rather than ability.
If you sync to any news channel on TV or browse a news website, you will most likely find some kind of prediction being made, from an economist talking about the future of your country or the stock market to a political analyser raging about how unlikely it is for a particular candidate to win the next elections, what a terrible choice the president did or what Russia will do next.
Pause for a few seconds and give yourself an answer to this question: can we predict the future or make reliable forecasts, at all? Yes, no? Depending on which set of personal experiences you draw your conclusion from, it can range widely. If you considered the weather forecast, Google telling you how long it will take to get to home, or how likely it is for your best friend’s relationship to blow up, you might conclude that in fact, we can make pretty good predictions. If instead, you draw upon the other set of examples, such as predicting the economy, stock market, business moves, or something as simple as the traffic, then you’re likely to say no.
In my experience, the vast majority of us believe we’re able to actually make accurate, realistic and even concise predictions. A really simple way to prove my point is my previous example, go to any news site and you’ll find yourself flooded by future forecasts. If people didn’t believe these forecasts at all, if they were aware of human’s inability to predict the future then these news channels wouldn’t exist, there wouldn’t be any demand for them.
The short answer is that we all believe we’re able of making good future forecasts. Why do we believe it and even more importantly, why do we base our present decisions on this false idea is a great study topic.
Remember that time you were discussing politics with your opposite opinion friend or family member? You were both using “logic” and “rationale” to try proving the other person wrong and to show them how right you were. “Of course my candidate will win the elections! Just look at these, these and these facts”, or “the solution to the jobs deficit is these, these and that, that’s all! These stupid, useless politicians!”. My apologies for using so many political examples, but they are just perfect to illustrate how wrong we are on this subject.
Can we predict the future whatsoever?
No. A plain, big, dirty no. We are unable to predict the future. But why do we all believe we can?
We see ourselves as highly logical beings, our society of science and technology inspires the idea that with sufficient information we are able to solve any problem, therefore, with enough information and brains we should be able to understand any system and see in which direction it is heading. The key word here is system. We’re surrounded by system of various complexities, our ability to predict the future depends on our understanding of the system and it’s inherent randomness or chaos.
A system is “a group of related parts that move or work together”. The more the moving parts, the more the variables, the harder our ability to understand it and predict a certain outcome. The stock market, for example, is believed to be impossible to predict because there are virtually an infinite amount of connections between variables. How many coca-colas are sold in China might affect the value of the Google stock for some unknown reason (this is an exaggeration).
This is the main reason why you trust experts when you see them making future forecasts, as an expert they have a much better understanding of complex system than a non-expert. This explains why economists giving a solution to an economic problem is much more trusted than a farmer, even if the solution is exactly the same one.
When it comes to overly complex systems, such as a country’s economy or international relations, being an expert only gives an edge. The system is still not well understood and any prediction is almost a wild card. A slightly more accurate wild card. To prove my point, no one predicted any of the previous economic crisis, from the 2008 housing bubble to both world wars. No one predicted Brexit and no one is yet able to see the outcome of it.
You might call “bullshit!” on me here. Challenge accepted.
Even though many people were talking about the possibility of the UK leaving the EU for many years, and pretty much everyone in the western world predicted the fall of the soviet union, no one accurately predicted it. What I mean by this is the fact that everyone, even experts, only have the slightest of ideas of what is going to happen. There were just as many people saying that the UK would never leave the EU and every communist in the world were rallying in support of the soviet union. How could so many people be dead wrong? After all, the Brexit difference was of merely 4%, what if something had changed 2% of the voter’s perspective? The outcome would have been totally different.
As a thought experiment, imagine you’re clever enough to predict that the UK was going to leave the European Union in 2016, causing the pound value to fall to record low levels, wouldn’t you use this grand knowledge to your advantage? By investing in such a way that once the pound value falls, you can sell certain stock to get record high values. Ca-chin! You’re suddenly a millionaire! But instead, you go to BBC News and complain about it, maybe argue with someone of the opposite opinion about why your prediction is going to happen and they’re wrong. Sounds familiar?
What happens when we understand a system?
No one can predict the outcome of most systems in a predictable and accurate way due to the complexity of most of them, however, we can make good approximations and control the variables to achieve the desired outcome while minimising undesired ones. This is only possible when we have a good understanding or a good idea of how a complex system operates. This is how we’ve been able to invent drugs and achieve such a high level of technical complexity, by controlling undesired side-effects.
A perfect example of controlling the variables of a system to achieve the desired outcome are medical drugs. Since life itself is a hyper-complex set of interactions all drugs have side effects, we can only control them and try to get the best possible effect, which is a cured patient. However, how can you know that a person that got cured of the flu after taking a pill wouldn’t have been cured after without the pill? Medicines certainly work when we consider many patients, statistically speaking, someone getting sicker for taking a medicine is irrelevant when you get 100 others cured by it. Therefore, any doctor saying that you will definitely be cured by a medicine is lying, since he can’t possibly predict that your complex body system won’t reject the medicine, he’s simply talking statistics, most people do get better.
We have many theories that help us understand the behaviour of systems. Our ability to predict the future depends solely on our understanding of it. We have an amazing understanding of the laws and dynamics that rule planetary movements, thanks to relativity and Newtonian physics we can accurately predict the position the moon, Mars or any planet in the solar system in 30 years time. Mathematics may be the only human creation that can make accurate future forecasts, However, stock markets, economies, politics or our bodies are far from being understood at this point and even farther from falling into a reliable mathematical formula, anyone predicting anything out these systems is simply making wild guesses.
The importance of statistics, data sets and probability.
You will find thousands of “real” predictions on the internet with a simple search. Predictions so damn accurate that seems impossible to deny them. In such cases, statistics helps us uncover why this happens.
Imagine there are ten thousand people predicting every single day if it will rain tomorrow in Rome, and if so, at what exact time. If no one manages to guess the exact time it started raining in Rome, then everyone makes another guess for the next day and repeat. How long will it take for someone’s prediction to become true? Eventually, one of those ten thousand predictions will become true, not because that particular person understood weather systems, but because she was part of a big enough data set that was bound to hit the target eventually. With big enough data sets, any guess can become a prediction given enough time, this is an extremely powerful idea.
One day an economist says the market demand for a product is bound to skyrocket in a month’s time and therefore you should heavily invest in this and that company. In one month’s time, exactly what was predicted happens. This economist gets famous, all over the news he’s heralded as the best economist since he was the only one able to see through the curtain of time and market trends. Did he truly understood the system and was able to see the trends?
To understand what happened you need to consider the huge amount of economists all saying different things, maybe there were 10 thousand experts heralding different outcomes. All of them but one fails to predict which product’s demand would skyrocket. The fact is that he didn’t predict anything, he was simply one data point in a huge set of data. His prediction became true, but 9.999 others didn’t. That’s equivalent to blindly throwing hundreds of darts and believing you’re an expert once a dart hits the centre. You’re not, you simply tried many times, in such big data sets, individual results mean nothing.
The only way to prove if someone really understands a system and can forecasts its results is if the same person makes multiple predictions accurately. If this happens then the chances of that person being right purely due to statistical factors are low.
A good way of seeing probability at its best is on casinos. In every casino, there is always the “lucky winner”, the person that appears to win for no particular reason but luck or skill. We call this “luck”, but for one person winning the jackpot, there are many others constantly losing, one person is bound to win many times after enough time, that’s why we call it luck because we don’t know who will be the winner of it all. Casinos know this and all their games have the probability on their favour, any person playing for extended periods of time will lose money, the bigger the data set the stronger the statistical factors become. A lucky winner is part of their calculations.
Every Time you see someone forecasting the future, the outcome of an election, a war, an economy, a country, or any complex and not well-understood system, imagine they’re a bit mad. They believe what they’re saying of course, but that doesn’t mean they’re right. The future is unknown. We can only hope to deal with what comes next the best we can.
P.S: I tried to make this article shorter. I started with 700 words which became 1700 and ultimately 2040. So, fail. I left many important points out, but I believe this rounds it up quite nicely. Any opinion are, as always, welcomed!