Saturday, October 17, 2009

Some Pessimism for Optimists

Forecasting is impossible unless you're this guy; everyone else looks at an uncertain world and makes some prediction with error. The optimists think things will get better; the pessimists that it will get worse.

The optimists have been overwhelmingly correct over the past few hundred years. Health, wealth, and freedom have all gone up; poverty, intolerance, and malaria have all gone down.

Yet people keep praising the pessimists. Pessimists are graded on the strength of their best prediction; optimists on their worst.

Compare Fukuyama with Roubini. Fukuyama's prediction--that liberal, free-market democracy would rule the world--was bold if not entirely innovative. But it's held up enormously well. Global conflict is down; freedom and free markets have spread. Yet Fukuyama gets absolutely no respect. People focus on the flaws in his call--there is still some conflict in the world; some countries are still repressive. Successes in optimistic predictions, no matter how large or important, are ignored as representing flukes or are else seen as "unsustainable". More generally, optimists are taken as terminally deluded captives of some authority. They're sellout shrills, and deserve no respect. Serious people are eternally critical.

Then there's Roubini. He's spent the last ten years warning about disasters that have never happened. A dollar crisis, balance of payments crisis, and so forth. Most of those disasters have still not happened. Then he got to doomesdaying on the housing market late. But everyone only remembers this last prediction, and calls him a prophet. He goes around New York with a bevy of hot twenty-somethings; Fukuyama doesn't get the same treatment.

The lesson is clear for future prognosticators. If you say things will get better; you'll be denounced as wrong if it doesn't hold up, and a suck-up even if they do. If you say they'll get worse; just wait until something bad happens and you get hailed for your prescience.


TGGP said...

Those freedom rankings seem rather subjective to me.
Did you catch this? I found via McArdle:

Thorfinn said...

The quality of the rating doesn't matter--it's the momentum.

That's a great pic.

Mupetblast said...

Hm. I've never heard of Roubini, but I've heard of Fukuyama. I've never seen Roubini on C-Span's Book TV, but I've seen Fukuyama.

Those forecasting disaster in Iraq upon occupation got little attention relative to the glibsters like Thomas Friedman et al.

I agree that there exists a critical mindset among the intelligentsia and those just generally interested in social/global issues, and that pessimism is the sophisticated stance to take, but these people aren't the voices the layperson hears from on a regular basis. Instead they contribute to the culture industry, as an Adorno fan might put it.