Watching yet more negative forecasts getting public attention has prompted me to share some research that I have done on the subject. The key finding is startling: the vast majority of forecasts are wrong. And that begs the question “Why is our media so addicted to publishing them?”
Well, it turns out that human beings crave certainty and forecasts go some way to address that need. My problem with that is two-fold. First, if forecasts are generally wrong, could we not make better use of our forecasters? Second, can we curb our craving for negative forecasts, given that they are damaging, self-indulgent and risk being self-fulfilling? They undermine confidence, postpone or prevent investment and can even cause some people to leave the country.
Surely, it would be far better to have economists and others explain why things are as they are and suggest positive interventions that help improve matters.
There has been a great deal of work done on this – and we all know – as author and journalist Dan Gardner has pointed out “there is a near universal truth that economists’ predictions are least accurate when they are most needed”. For we only have to remind ourselves of the forecasts that have been made since 2007 to confirm that statement.
Gardner, in a recent book, Future Babble, also suggests that it would be a more mature and better strategy to recognise that the future will forever be shrouded in darkness and that we would be far better working on our resilience, preparedness and talking to each other to get better results than those that otherwise might be forecast.
The Private Fraser attitude of, “we’re all doomed”, has only one redeeming feature – triggering positive people to roll up their sleeves and take practical steps towards a better future.
Yet, as media professionals tell us “negative stories are easier to sell”.
And Gardner suggests an explanation for this, saying that the human predilection for gloom is simply an outgrowth of what is sometimes called “Negativity Bias”. He tells us that this is a survival strategy as “survival requires urgent attention to possible bad outcomes”.
In other words, he says we prefer to have confirmation that future outcomes will be bad instead of simply harbouring the fear that bad stuff could happen.
So does this explain why a good story in the media simultaneously describes something bad that could come to pass and taps into a fear that many of us have had about that adverse eventuality? If so that is very depressing and very immature.
A better strategy would be to trigger our determination to face down, avert, minimise and survive the threat with style and effectiveness. The key point being that a long-term diet of negative forecasts will not build the common good – or provide media with more readers and more advertisers.
The experience of successful people, families, communities, businesses and countries is categorical: accurate forecasts are not necessary for success and good decisions. Especially as the term “accurate forecast” is a contradiction in terms.
In recent months, I have been working with colleagues to produce a better way that helps people maturely face the future.
That involves putting systems in place that enable organisations to identify likely risks, establish controls to minimise their occurrence, as well as developing strategies handle matters if the risk comes to pass. This latter stage involves developing pre-planned responses that would minimise and mitigate the impact of any adverse effect and also leverage any opportunities might appear in that new scenario.
In doing that, we earn the posthumous support of Karl Popper, who once said “Instead of posing as prophets we must be makers of our fate.”
This also has implications for the policy-maker, where there is a need to involve people in such a way that more and more of them become “active citizens”, who are able to help first, to develop better policy with fewer unintended consequence and second be more proactive – working to achieve common goals and less tolerant of self-indulgent negativity with no proactive agenda.
Indeed, much of this is supported by the geo-politician, who runs Kissinger Associates, Joshua Cooper Ramo. He has prompted our policy-makers to bolster resilience, by treating policy-making more like gardening than architecture.
Meanwhile, while we ponder the benefits of a better vision, better ways to handle risk and increased levels of collaboration and co-operation, we have to face the current reality.
In that reality, people will continue to want to speculate on the future. Indeed, just as some people see advantage in speculating on the financial future, others will see advantage in speculating on other eventualities.
But they all need to be reminded that both of these areas of speculation can have adverse effects on real people as we have seen with the financial crisis.
So, perhaps we need a higher level of accountability to the common good from those who prefer to speculate rather than help get better outcomes in the real world.
Perhaps, when people move into the realms of speculation, there should be more controls to limit adverse possibilities and penalties imposed when these controls are both circumvented and cause damage to others.
In any case, we should start recording the measures that are important to us such as GDP, employment, unemployment and life expectancy in time series graphs.
That way we could track progress in the light of the global and national factors as well as the public and private interventions that are being taken to get better results. By doing so, our former forecasters can use their expertise to explain what has happened, bring us together to debate the issues and build confidence, suggest steps that could be taken to improve matters and invite others to make their own contributions to better outcomes.
That, to my mind, would be so much better than being bombarded by negativity which encourages lonely isolated strategies that presume a need to survive on less.
• Jim Mather is chairman of Gael Ltd, a visiting professor at the University of Strathclyde and former SNP minister for enterprise