Frictionless forecasting is a fiction

Abstract

Observers of the political and economic scene note that almost all decisions involve incremental changes from the status quo¹. Slightly mitigating the ills we have has always seemed preferable to flying to others that we know not of. It now appears, however, that advanced information technology and improved theoretical understanding of social and economic phenomena may have put us on the verge of a breakthrough, and the possibility exists of flying directly to radically new solutions that we can predict sufficiently well not only to avoid ills but discontinuously to enhance the good. Arguments for this brave new frictionless society go roughly as follows:

• 1. With the increase in specialization, experts are available today who are capable of short-term forecasts about almost all aspects of social and economic behavior.

• 2. Concurrently, it is becoming increasingly difficult for any one person to integrate all of this understanding.

• 3. Computer technology now allows one to incorporate this immense body of short-term forecast knowledge in programs that can, through simulation, predict the long-term future impacts of contemplated decisions. These impacts are often surprising and counterintuitive, accounting for the fear, in the past, of anything but small changes².

• 4. Once we can predict the impact of globally discontinuous decisions, debate can appropriately center on which effects are preferable and not on what the impacts will be.