REAL AUSTRALIA

Voice of Real Australia: Seers with crystal balls don't have a good record

Voice of Real Australia is a regular newsletter from Australian Community Media, which has journalists in every state and territory. Sign up here to get it by email, or here to forward it to a friend. Today's is written by Steve Evans from The Canberra Times.

Coming to a conversation near you: Crystal balls, the future and all that. Photo: Shutterstock

Coming to a conversation near you: Crystal balls, the future and all that. Photo: Shutterstock

You will not doubt have been bombarded with predictions about the next decade as the '10s give way to the '20s - roaring or not.

Take them with a bucket of salt.

As the Danish physicist Niels Bohr once said: "It is very hard to predict, especially the future."

Do you remember when Japan was going to overtake the US as an economic power?

Or all those wise words about how books would be very old hat? Reading off a screen was so much more efficient. Why on earth would you lug a book the weight of a brick around?

Well, for the last five years book sales in Australia have grown. Not by much - but grown. They certainly haven't fallen off an internet cliff.

Reports of the death of books were premature, according to Claire Leyton, who sells books at paperchain in Manuka and blogs at claireevareads on Instagram.

"I think this is one prediction that definitely won't come to fruition," she says. "There is definitely still a market for physical books. While e-books may be convenient, physical books still have that special place in our heart. We like the feel of cracking open a book, displaying it proudly on our bookshelves."

The death of physical books is not the most glorious failed prediction.

Think of Microsoft's chief executive Steve Ballmer sneering at the newfangled gizmo from rival Apple: "There's no chance that the iPhone is going to get any significant market share. No chance."

"Television? The word is half Latin and half Greek. No good can come of it," newspaper editor C.P Scott once said.

"The coming of the wireless era will make war impossible, because it will make war ridiculous," opined Guglielmo Marconi, who invented the radio.

How could people get it so wrong? How could Decca's Dick Rowe let himself become "The Man Who Turned Down The Beatles" after the record label decided Brian Poole And The Tremeloes would spin more money and disks?

So beware predictions. There are two areas where the future seers have been particularly wrong: on climate and on money.

In 1970, the biologist Paul Ehrlich predicted the collapse of civilisation in the next few decades as a "near certainty" because of the "population bomb". He was echoing the English doomster Robert Malthus, who warned in 1798 of a similar catastrophe where population outstripped food supply.

Of course, every prediction might come true eventually. One day, the boy crying "wolf" will be right - and so it may yet be with environmental catastrophe.

But wrong they were. Technology and ingenuity have come to the rescue - so far.

And on money. Pundits get it right when markets are moving in one direction. When the stock market is rising, predicting a rise works.

And to be fair, a year ago a lot of stock market pundits predicted rising stock prices - and they were right. The "Santa Rally" has capped the biggest gains in six years.

But the hard part is predicting the turning point, and the track record of economists and traders is to miss those switches from up to down.

A year ago, economist Andrew Brigden calculated that of the 469 downturns in different economies since 1988, the International Monetary Fund had predicted only four by the spring of the preceding year.

The great Nobel Prize-winning economist, Paul Samuelson, once said that "the [US] stock market has forecast nine of the last five recessions".

And so we move into 2020. "Our Australia stock market outlook for 2020 and 2021 is bullish", says one magazine, bullishly.

Maybe. The only cast-iron prediction is that memories are short and that the next time markets fizz, fizzle won't be far away - yet each time people believe that "this time it'll be different".

Remember, too, the law of untended consequences. In the Arab Spring a decade ago, when uprisings spread across north Africa and the Middle East, the wise word was that social media had enabled democracy. Never again would totalitarian governments control information.

Social media would strengthen democracy. Ten years on, it seems the opposite. Social media has given voice to those who spread falsehood, knowingly and unknowingly.

Or think of the way people said the post office would be destroyed by email. It hasn't happened, because the rise of etrade meant the rise of the parcel.

So what predictions should you give credence to?

Seers with crystal balls don't have a good record.

None, is the best answer. Seers with crystal balls don't have a good record.

Predictions are about future certainty. Forecasts, on the other hand, are about ranges of possibility given different circumstances. The Bureau of Meteorology forecasts the weather accurately, but it gives probabilities - a chance of rain or heat. There's a logic - a science - to it.

Silicon Valley forecaster Paul Saffo thinks the key to getting it right is not to get too wedded to a view of the future. Be prepared to change with the evidence.

"Having strong opinions gives you the capacity to reach conclusions quickly, but holding them weakly allows you to discard them the moment you encounter conflicting evidence," he says.

His advice is to use common sense when you assess forecasts.

"The best way to make sense of what lies ahead is to forecast for yourself."

Steve Evans, journalist, The Canberra Times.

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