Brain Food #703
The power of predictions
Thoughts of the day
Investors always say you cannot predict market performance, and that past performance does not guarantee future results, which is the same in life. That is, also, what Nassim Taleb argues in The Black Swan; that we make assumptions about the future based on what has happened before, without taking into account outliers.
What is it, then about, making predictions, that is so alluring to humans? From Nostradamus and astrology to political and financial analysts, people have a tendency to try and predict what will come next.
Perhaps it is an act of owning our past, but also of gaining control over all the unknowns, both exciting and terrifying, that the future holds.
Making predictions gently forces one to learn and analyse historical information to make educated guesses about what will happen next. Sometimes, we succeed. We cannot predict the lottery numbers, a truly serendipitous outcome, or whether a crazy driver will drive into our house while we are watching TV, but we can predict where a ball in midflight will land, in order to catch it, or which way a car is likely to come from before we safely cross the road.
The future, of course, is largely unpredictable because, unless it is predetermined by some unknown force, it is largely influenced by our own actions, paired with imperfect information.
Yet, there is value in making predictions, and that is through the activation of our imagination.
In Homo Deus, his examination of the future, Yuval Noah Harari, writes:
“This is the best reason to learn history: not in order to predict the future, but to free yourself of the past and imagine alternative destinies. Of course this is not total freedom – we cannot avoid being shaped by the past. But some freedom is better than none.”
And so, by attempting to make predictions, we not only gain some control over our own future, but we also give ourselves the opportunity to think carefully about all options and outcomes, beyond the obvious ones, and -why not- start to build them.
“Predicting that humankind will try to gain immortality, bliss and divinity is much like predicting that people building a house will want a lawn in their front yard. It sounds very likely. But once you say it out loud, you can begin to think about alternatives.”
In Greek mythology, Tiresias was a blind oracle, who could see the future. His prophecies, though mostly true, were largely not believed. The characters still determined their own fates, though one wonders what was subconsciously at play.
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