Tom Chatfield [ht: ja] makes a compelling case that, in the era of “big data,” we often suffer from what is called a recency bias, the “tendency to assume that future events will closely resemble recent experience.”
It’s a version of what is also known as the availability heuristic: the tendency to base your thinking disproportionately on whatever comes most easily to mind. It’s also a universal psychological attribute. If the last few years have seen exceptionally cold summers where you live, for example, you might be tempted to state that summers are getting colder – or that your local climate may be cooling. In fact, you shouldn’t read anything whatsoever into the data. You would need to take a far, far longer view to learn anything meaningful about climate trends. In the short term, you’d be best not speculating at all – but who among us can manage that?
The same tends to be true of most complex phenomena in real life: stock markets, economies, the success or failure of companies, war and peace, relationships, the rise and fall of empires. Short-term analyses aren’t only invalid – they’re actively unhelpful and misleading. Just look at the legions of economists who lined up to pronounce events like the 2009 financial crisis unthinkable right until it happened. The very notion that valid predictions could be made on that kind of scale was itself part of the problem.
And the solution?
What’s needed is something that I like to think of as “intelligent forgetting”: teaching our tools to become better at letting go of the immediate past in order to keep its larger continuities in view.
Now, if only we could intelligently forget mainstream economics—and spend more time studying history, including of course the history of capitalism. Then, we’d be in better shape to understand the recurring boom-and-bust-cycles that regularly throw millions of people out of work and subject them to the kinds of crises they’ve been forced to endure for the past nine years, while those at the top once again benefit from the way the game is rigged.