Wild Cards and Black Swans: How to get the future right and the past wrong

The Long Now Foundation held a couple of public lectures recently on how we get the future right and the past wrong.

LIFT blogger and digital archaeologist Nicolas Nova points out Paul Saffo's January Long Now presentation on being a better futurist.

What makes forecasting hard, according to Saffo, isn't predicting the outcome, but accurately mapping the edges of what might happen. Since change is linear - we can't take one event and extrapolate into the future - what might happen must sometimes be imagined. Saffo:

Science fiction is brilliant at this, and often predictive, because it plants idea bombs in teenagers which they make real 15 years later.

The Long Now Foundation links to a helpful Harvard Business Review piece authored by Saffo that describes "six rules for effective forecasting." An executive summary of that article is here.

Financial analyst Nassim Taleb, who will be at the IdeaFestival in September, followed Saffo in February and discussed "retrocasting" - essentially, how we get the future wrong by misjudging the past. "Black Swans", those history making events that sail into the present, Taleb explained, are often "wrongly retro-predicted. We pretend we know why the big event happened, and so entrench our inability to deal with the next world-changing improbable event." I liked this thought:

We compute probability from the success of the survivors instead of paying attention to what didn't happen, but might have.

There are two places whence random things occur, according to Taleb. They are "Mediocristan," which is a realm of random events dominated by the average, and "Extremistan," where spectacular successes and the long tail dominate. Taleb:

You can say there will be a few monsters and lots of midgets and the world will be changed by the monsters, and that’s all you can say.

According to the blog entry for the event, Benoit Mandelbrot convinced Taleb that energy powers Mediocristan, while the main dynamic of Extremistan involves the uncertainty of information. Anything social, anything that involves the brilliance and bane of language, anything you might read on IFblog, hails from Extremistan.

Audio, video and blog entries from the Saffo and Taleb Long Now seminars may be found here.

Thanks Nicolas for the pointer!

Wayne