Professional Forecasters Have Been Getting It Wrong Since the Beginning
Three economists started competing forecasting businesses in the early 20th century. They all got the Great Depression wrong.
Author’s note: I regularly find myself assailed by questions about the future from business leaders, colleagues, and friends. They ask about companies, elections, technology, their own lives. Their questions imply that the future is knowable, hidden like the Wizard of Oz behind a curtain that only the fearless or gifted can pull aside. This strikes me as magical thinking, not least because research shows that the time horizon for accurate forecasting is shrinking: 400 days if you’re rigorous, closer to 150 days if you’re not.
This is a huge change whose impact few individuals or organizations have fully absorbed or understood. Yet even as our foresight shrinks, our addiction to prediction has grown.
A craving for certainty extracts a high cost: constricting our understanding, our imagination, and our freedom. In both our private and our working lives, how much more might we be able to do, to see and to be if we kicked the habit?
I wrote UNCHARTED to understand how forecasting fails us and to explore better ways of living, working and thinking. Since the beginning of human life, we’ve been tormented by uncertainty. But when and how had we fallen prey to the illusion that we could — or should — eliminate it?
The 5 Best Business Books of 2020 (According to Every Other Best-of-2020 List)
How can books help us understand the tremendous shifts that occurred this year?
Who knew what was in the air? Enjoying the waters just beyond Narragansett Pier, Rhode Island, the economist Irving Fisher kept swimming. A happy marriage, two daughters, and a full professorship at Yale had the future looking as dazzling as the summer ocean. But looking back to the shore, he was surprised how far the current had carried him. It took all his energy to regain the beach. He arrived at last exhausted, unnerved by the speed with which his glorious…