The free market can’t predict the future. How can we prepare?
Futurists- those scientists, philosophers, economists, thinkers, teachers, and, most important of all, investors and hedge-fund managers- are always full of ideas about what the next decades might hold.
Many of their predictions and prognostications come to pass, of course. Hedge-fund managers who fail to anticipate changes in the marketplace are almost always forced to find other work.
Entire industries depend upon the ability to see into the future, anticipate fluctuations in the global market, predict the impact of cultural and social trends, preempt advancements in technology.
Economists, Wall Street bankers, retail sales executives, insurance actuaries, to say nothing of marketers and advertisers, build entire careers on a gossamer foundation of data analysis, trend history analytics, and number crunching only slightly more dependable than crystal ball gazing or the predictions of Nostradamus.
The future is more impossible to predict than the highway directly in front of our cars.
We look out through the windshield from the driver’s seat and try to predict the future all the time. To navigate traffic, we need to guess- correctly- what will happen on the road ahead. If everything continues on the current trajectories we observe, we will be right.
But that isn’t the way highway driving goes goes at all, is it?
Any one of the autos we observe while avoiding obstacles on the highway could change trajectory at any moment. The car in front of us could cross two lanes of traffic, jump the median; at the very least, it could slow down precipitously at any moment for no discernible reason whatever.
Take your eyes off the road in front of you, even for one moment, what you see when you next check your bearings through the windshield might have altered completely.
And those are just the potential obstacles we can actually see and anticipate.
We keep our eyes on the road with the implicit understanding that the cars in front of us could change speed or direction without warning at any given moment. If that happens, we hope to react to those unexpected changes in time to avoid a potential accident and reach our destination.
But our vehicle could be the one to alter the circumstances of the highway and we’d never see it coming. We could have a tire blowout at 75-miles per hour, or another kind of mechanical malfunction, or suffer a major medical event.
A huge piece of scrap metal could blow directly into the path of your oncoming car from 7 lanes over. A car driving at extremely high speeds could crash into us from behind.
Predicting what other drivers might or might not do; being prepared to react in a split second to avoid an accident: There are excellent reasons why staying attentive while driving is so important.
As distracting as cell phones, passengers, and navigation aids can be, a car is still a deadly weapon. Every single time we get behind the wheel, we are entering a complex situation, where our lives and the lives of other people are at risk.
If predicting what traffic will do is impossible, and predicting the weather accurately isn’t even a walk in the park, how much harder would it be to predict what the job market in the U.S. might look like in 10 or 20 years?
So many complex factors; so many moving parts. So many outcomes, possibilities and variables. That doesn’t stop us all from wondering, though.
What will the job market be like when 70% of the jobs available today are done by computers and machines?
The disappearing jobs might not be the ones we think, either.
In China, the world’s first- but probably not last- AI prosecutor is already bringing charges against suspected criminals in cases involving the top ten most common crimes in China, two of which are financial fraud and political dissent.
Covid19 sped up the rush to automate more and more public-facing jobs. A self-service checkout machine isn’t at risk from Covid.
In the fields of science and medicine, there is such a rush for better medical diagnostic technology, Elizabeth Holmes was able to bamboozle savvy tech investors out of millions in start-up cash with surprising ease.
The invention Holmes dangled before top execs in tech and medicine was billed as a near-magical medical device that could correctly diagnose a sick patient every time by analyzing a single drop of their blood.
Holmes hadn’t invented that, but she had stumbled upon the oldest trick in the deceiver’s handbook, the single best way to get people to believe a big lie: Tell them exactly what they already really, really want to believe.
Theranos wouldn’t have gotten the investors it did without the possibility that such a diagnostic device might eventually be invented. Technology is improving all the time and we’ve mapped the human genome, after all.
Automating certain jobs in the medical profession will mean some medical professionals might need another specialty, however. The ability of an AI prosecutor to analyze a century’s worth of legal precedent in a nanosecond may eventually put some good attorneys out of a job.
Machines will eventually do certain jobs for us they aren’t doing today. It’s impossible to predict what some of those replaced jobs might be, but some people make a living doing just that.
Thing is, the consumer market in a huge economy like the United States- population 330 million- is a difficult thing to predict. Economic markets do funny things sometimes, to say nothing of consumers. Sometimes a rare Dutch tulip bulb or Beanie Baby can become worth millions. Other times, an investment all the major Silicon Valley power players are jazzed about falls as flat as a certain standup motor-scooter.
Worse- for economic prognosticators, actuaries and futurists, anyway- the U.S. market is now inextricably linked to the global marketplace as a whole and other world economies in particular. Fluctuations in those markets, changes in political leadership, civil unrest, a border dispute, crop failures, the invasion of one sovereign nation by another: All these things and a million more play havoc with the predictions of corporations and day traders.
Then, there is always the dreaded Black Swan event, a term economists coined to describe something that completely rocks the marketplace and which no one could have seen coming.
Economists can study past trends. They can study current data. Thanks to the power of computers and the Information Age, they can now do this better than ever. They can analyze a company top to bottom, pour over its filings and disclosures, evaluate its management, check out the competition and valuate assets all day long.
They cannot predict the future.
If the last few years have taught us anything, it is that anything could happen at any moment. A key company could go under, causing a chain reaction; supply lines could be disrupted by unforeseen shortages; war could break out; a global pandemic could hit; an entirely new industry could spring up from the next Silicon Valley and transform the marketplace and world economies completely, almost overnight.
(contributing writer, Brooke Bell)