For experts, it’s easy to predict the obvious, but it’s hard for them to predict when something goes really wrong. [...]
Science writer David Freedman, author of Wrong, determined that two-thirds of studies in major science journals are shown later to be wrong. Almost 100 per cent of long-term economic studies are proven to be wrong.
And in the granddaddy of all studies, Philip Tetlock, a psychology professor at the University of California, Berkeley, spent 20 years following 300 elite media and government experts making 82,000 predictions. After 20 years, the predictions did a fraction better than a chimpanzee throwing darts at a board.
Tetlock found that the best experts were uncertain, because that kept them thinking about it. But that expert you rarely see on television. They’re boring. [...]
The economy has always been hard to predict. There’s a famous quote by a Yale economics professor: “Stocks have reached what looks like a permanently high plateau” made on Oct. 17, 1929, days before the Great Crash.
We visited an ex-management consultant who flew all over the world advising top companies and governments. He says the most important thing is to look right, dress right and drop a lot of jargon. No one knows with statistical accuracy how to make a business run or predict the economy.
The guy who really struck me is William White. He helped run the Bank of Canada and was a top banker in Europe. He said that we pretend economics is a science, but it’s not. It’s mass behaviour. It’s unpredictable.
Das ganze Interview gibt es hier.
