At the beginning of 2007, the economist Robert Prechter correctly predicted the global stock market crash that unfolded later that year. Smart guy. The only problem was that he’d been making exactly the same prediction every year for the previous twenty-five years. Hmm.
By contrast, in 2011, American Christian radio host Harold Camping made the precise prediction that the End of the World would occur on May 21 that same year. Oops.
There’s a clear lesson here. If you’re going to make forecasts about the future, be sure not to say when it’s going to happen.
Karl Marx understood that principle when in 1848 he confidently predicted that capitalism would self-destruct. Astutely, he didn’t specify when that would happen, so Marxists are still patiently waiting, unlike the disappointed followers of Harold Camping.
You can of course predict absolutely anything you like and not be proven wrong, provided you don’t set a firm date.
It was the philosopher Karl Popper who pointed out what now seems obvious – that a theory is only scientifically valid if it is possible to falsify it. For example, Newton’s theory of gravity is a scientific theory because it is possible to falsify it by observation. In fact, scientists have made measurements that do falsify Newton’s laws in favour of Einstein’s General Theory of Relativity.
By contrast, the economic predictions of Prechter and Marx are not falsifiable. Popper would argue that such predictions are essentially meaningless. But that doesn’t stop millions of people believing in them.
So, in the spirit of making forecasts, I hereby predict that this blog will become the most influential and celebrated work of prescience ever. But I’m not telling you when that will happen.