Are you optimistic or pessimistic?

In the January 26th issue of Mcleans, Donald Coxe, who is an economist, wrote an article discussing economic forecasts. The sub-title of the article was 'are you and optimist or a pessimist?'

Coxe went on to say that you can look at the economy and make an eloquent case for optimism, or for pessimism. It has less to do with the facts and more to do with the bias.

And really, the bias is what it all comes down to.

I read a lot of economics. My reaction is interesting. When I read the optimists, I begin to think that things are going to be all right. Yes, there are problems, but there have been problems before and we've made it through them in the past. If you look at things on a long-term scale, the world seems to be getting better. Certainly, there are more people living in better conditions then there were a couple hundred years ago.

When I read the pessimists, I begin to think that the world could be on the verge of collapse. The global economy is woefully out of balance, there are still huge numbers of people living in poverty, we are stealing from the future to satisfy the over consumption of the present.

The problem, I think, is not that I'm wishy-washy. Its that the answer really isn't that clear. Its hard to predict the future. And its hard to predict how the past may have turned out if it had travelled a different course.

Lately I've been reading a lot about global warming. Its the same problem. There's a lot we just don't know. We know that we are changing the environment. That's for sure. But no one can be sure what the affect is, and what its going to be. No one can even be sure how much we've affected things so far. So the optimists can have their optimistic predictions, and the pessimists can have their pessimistic predictions. And the two can't really be reconciled until its too late.

The world economy is a complex system. The global environment is a complex system. We, as human beings, just aren't smart enough to understand them. Both the optimist and the pessimist are wrong. Because they are biased. Because they are trying to extrapolate a fixed opinion on a system that we just don't understand enough to fix anything on.

I think we need to change the basis of our thinking a bit. The key word there is basis. No more is the basis blind optimism. No more is it blind pessimism. Instead, the basis should be that we really don't know. And from that, all else follows.
- posted by Sigurd12/18/2004 11:21:00 AM