In this era of dramatic, rampant, and incessant political change, predictions about the future can no longer be based either on conventional wisdom or historical precedent. We are, after all, in the middle of a paradigm shift that is shredding prognosticators and their prognostications with voraciousness. Just as virtually all of those highly paid political pundits missed by a mile the Brexit and Trump’s electoral victory, economic pundits accustomed to predicting the future based on past performance are getting it equally wrong, falling victim to the seemingly endless stream of unanticipated news, based on fallacious assumptions.
Plainly and simply, historical performance can no longer serve as a guidepost to the future. Indeed, today there is great danger in presuming that anything that may have happened in the past is necessarily any indication of what will happen in the future. Wasn’t the stock market supposed to go down in response to Trump’s election? Wasn’t the Colombian peace deal supposed to be approved the first time? Wasn’t the price of oil supposed to see a dramatic rise in response to the OPEC agreement? Wasn’t Putin supposed to respond in kind to the diplomat expulsions in the U.S.?
This has a lot to do (among other things) with a tendency to perhaps over-rely on the lessons of history, the growing impact of instant communication, and the inclusion of voters who were previously either shut out or not heard (for whatever reason) having become integrated into political processes around the world. It is also the result of a change in global economic dynamics, with a gradual transition away from developed country domination of the global economy in favor of emerging economies. And it is evidence that technology, innovation and creativity, which are so vibrant in the many parts of the global economy, are translating into extended economic gains that literally swim against the tide of history.
