‘Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.’ The words of leadership theorist Peter Drucker speak to the customary crystal-ball gazing that accompanies a new year.
As Christmas trees come down, bank accounts exhale and New Year’s resolutions begin to tumble, prediction is rife. From politics to the economy to how Steve Smith will go opening the batting for Australia, forecasting in January flows like pumpkin spiced lattes in November.
We plan, prepare, insure, save and spend based on forecasts. The global predictive analytics market — guessing what’s going to happen — is set to top $100 billion by the end of the decade.
‘O heaven! that one might read the book of fate and see the revolution of the times,’ wrote Shakespeare. Our hunger for knowledge of the future long predates Doc Brown and his time-traveling DeLorean.
The term Black Swan, which can be traced back to 2nd century Rome, a time before Australia was discovered by Europeans. Then, as far as the developed world knew, all swans were white. A Black Swan was therefore an unexpected event, something that upended our predictions and defied our assumptions — as would happen centuries later when Europeans were shocked to find that Australian swans were indeed black.
In his bestseller, author and statistician Nassim Nicholas Taleb popularised the term and set down three characteristics of Black Swan events: They are unexpected. They have a high impact. They are often followed by concocted explanations of why they happened. Examples include Covid-19, the 9/11 attacks and Russia’s invasion of Ukraine.
In January last year, it was predicted that two thirds of the world’s economies (including Australia’s) was likely to face a recession in 2023. Instead, our latest economic figures suggest that we may have outwrestled the inflation bogeyman while unemployment has barely moved.
Additionally, in September last year, our Bureau of Meteorology declared an El Niño event accompanied by a rough bushfire season. It was not without basis (and summer’s not over yet), but our bigger problem — unpredicted then — has been record-breaking rainfall and flooding.
It seems that seeking clarity about the future is like looking for a needle in a haystack made of needles. Academic and forecasting expert Philip Tetlock suggests that even the best forecasters get it wrong 25 per cent to 40 per cent of the time.
Captain E.J. Smith was once among the most respected naval captains of his time. In 1907, he remarked ‘I never have been wrecked nor was I ever in any predicament that threatened to end in disaster of any sort’. Five years later he became a central character in the most famous maritime Black Swan event in modern history, going down with his ship the RMS Titanic. Evidently, gaining insight about foresight calls for more than plain hindsight.
Making things even trickier is the Black Swan’s more imposing cousin, The Black Elephant, a cross between a Black Swan and the proverbial elephant in the room. Black Elephants are unexpected events that we could have known more and done more about.
Ignoring six warnings of sea ice while speeding across the Atlantic in darkness didn’t serve Captain Smith well. A lack of pandemic preparedness caught the world flat-footed when a strange cluster of pneumonia cases emerged in Wuhan in late 2019. Even the 9/11 attack wasn’t a perfectly unimaginable Black Swan. Just seven years earlier, a separate plot to hijack and fly a jet into the Eiffel Tower was discovered and stopped.
The Black Elephants of 2024 lurk in the reeds.
Will China make a move on Taiwan? Will our inflation fight end with a hard or soft economic landing? Will artificial intelligence make our lives better or trickier? Will Taylor Swift and Travis Kelce get married? (fingers crossed).
This year, as ever, what we do will matter. However, regardless of what we do, there will be shocks and surprises. The dual realities of Black Swans and Black Elephants call us to recognise and embrace significance and humility, influence and meekness, confidence and diffidence, all at once.
Black Swans remind us that the future is unpredictable. Black Elephants remind us that this uncertainty doesn’t erase our agency. In a world perpetually lurching between prediction and confusion, the year ahead may be best navigated by those who can distinguish the elephants from the swans.
Max Jeganathan is a senior research fellow at the Centre for Public Christianity. He served as a political and social policy adviser in the Rudd and Gillard Labor governments and is undertaking a PhD in law on human dignity.
This article first appeared in Eureka Street.