“I know that people stick me with the title “futurist”. Do I think about the future, and what will happen, and how? Certainly. I have a huge interest in research about the future, but I am originally a mathematician. I’m not trying to predict the future, but I use mathematical methodologies to estimate the probabilities of each scenario, and on which of them to bet. This is what I call ‘correct futurism’, but I really don't call myself a futurist,” Prof. John Casti told “Globes” in an interview ahead of participation in the “Globes” Israel Business Conference 2010 in December.
“Globes”: What exactly differentiates you from other futurists?
Casti: “Most futurists don’t use scientific tools or methodologies. I regret to say that in many cases they are simply giving their personal opinion about the future, or extrapolations of past trends into the future scenarios. This approach is called trend following; in other words, they look at current trends, and say, ‘Tomorrow will like today, only worse/better.’ But is such a futuristic world there is no room for thunderous surprises, there is no dramatic shock, no "astounding".
“Mathematically, it is possible to prove that with the trend following approach, the futurist will always be accurate, but will never be able to predict surprises. I, conversely, take the opposite approach. My starting point is that the trend will end and will change, and over a timeline, it will change radically and fluctuate. These are, of course, rare events that occur with low frequency, but I believe that it’s the soul of the discipline of futurism.”
What do you base your predictions of radical change on?
“On the basis of the social mood in the group whose future we’re predicting. Is it optimistic or does it expect doom? Does it welcome the future or is it frightened of it? Our thesis asserts that the social mood, the emotional beliefs and feelings of a group determine future events at the political level, an extreme change in economic and business level, and trends in other areas, such as fashion and culture.”
Speaking of fashion, you say in your book, “Mood Matters”, that “the length of the skirt shortens the more the world experiences prosperity” and the contrary. What’s the connection?
“An empirical view over several decades shows a very interesting fact: when people are very optimistic, skirts become shorter, and their colors become brighter; conversely, when the social mood is bleak and society expects doom, the skirt becomes longer and the colors become darker. This is very anecdotal, but, as I said, it happens at the empirical level.
“In fact, when people are afraid of the future, several processes happen in parallel: people become more conservative, push in the direction of separatism, isolationism, xenophobic; and at the economic level localization and ingathering occurs. Conversely, when the social mood is optimistic and rosy, economic processes go in the direction of connections, development, openness, acceptance of the other, the different, the unusual, and these globalization processes will set the tone.”
Casti points to another feature that conforms to a group’s mood: the heights of skyscrapers. “Another fascinating empirical finding is that the height of buildings is a function of the social mood,” he says. “When you look at small countries that thrive over a certain period, you see that they get an appetite for building the tallest buildings in the world.
“My explanation is that this social group aims to build a monument that will commemorate its optimism. This has happened in Malaysia, Taiwan, and Dubai, for example. These buildings are of course not built in a day, and until they are completed the cycle reverses and the mood darkens. I always say that if you live in a country which says, ‘We’re going to build the tallest building in the world,’ you can expect the social mood and economy to plummet in two or three years. Such a declaration is an early warning sign, at least for me, to begin to sell stock.”
“How do you examine the social mood? Do you use opinion polls or internet surveys?
“In the past, I conducted opinion polls and survey, but I discovered that they’re not precise enough because they mostly rely on what people tell you, and not on what they are doing. I believe that the best index for determining the social mood is the financial markets, because they look at the people’s actual actions, not at they talk about ‘the situation’.”
“Regrettably, I am not a harbinger of good news”
According to the markets, what is the contemporary social mood in the West?
“Regrettably, I am not a harbinger of good news. The contemporary social mood in the West is very negative, and one of its expressions was seen in the latest US elections. As a rule of thumb, falls in financial markets predict the fall of the person in power. A year before the elections, in 2007, I was asked who would be elected McCain, Clinton, or Obama. I said that I didn’t know who would win, but I could predict with certainty that the Republicans would lose strength.
When I am asked about 2012, without a doubt, Obama and the Democrats will lose power. The current social mood is much worse than in the past, and under these conditions the party in power losses big. The mood in Europe is also very negative. We’re already seeing more fragmentation, isolationism, and separatism. I predict that if we go to sleep tonight and wake in 15 years, the European Union will no longer exist.”
What about terrorist groups? What’s the future of global terrorism?
“There will be many more terrorist attacks, an increase in the suicide rate and in the number of homeless. I regret that I am not optimistic, but in our research we see that hard times like these occur once a century. We had a period of optimistic social mood since 1975, and this positive cycle lasted for three decades. It has now reversed, and the negative cycle will last for 10 to 15 years.”
Maybe this pessimism is about the economy, and society is playing it sage, a classic example of Murphy’s Law?
“People mistakenly think that I’m a pessimist, but that’s only because the public hates change. As for this matter, I see in these times a massive change in consumer behavior: much less consumption of things (cars, gadgets, mobile telephones, computers, etc.), and a switch to a simpler and more basic life. This first happened out of necessity, because many people lose their jobs, and begin to grow vegetables in their backyards, or to repair their cars themselves, instead of buying a new car, larger, and faster car. “Over time, they realize that the ‘new situation’ forced on them was not the end of the world, and they even enjoy going back to basics. At this point, what was compelled turns into something more internal, and then a major change will occur in consumer behavior, from spending money on things toward buying more quality of experience.”
“At some point, I realized that mathematics had a limit”
In a recent interview with “Globes”, British futurist Ian Pearson predicted a wonderful world. For him, the exponential rate of technology will create better quality of life, we will have much more free time, and also a lot more money. How does this fit in with what you’re saying?
“Pearson bases his forecasts on a technological basis, and I base mine on a psychological foundation and social mood. I also agree that the pace of technology will extend life spans, create medical breakthroughs, increase free time, and even create a rise in the quality of life. But in 15 years will the private individual have more money and economic wellbeing? That is a question open for debate. I personally don’t think so. The quality of life might improve, but it won’t be because we’ll have more things, but because of wiser use of money by the Western man.”
Do you really think that the currently marginal simplicity movement will achieve critical mass and go mainstream?
“There are a lot of possible scenarios for the future and the transition to a lifestyle in the spirit of the simplicity movement is not a scenario with a very low probability. It also depends on the timeframe we’re talking about: a year, a few decades, or a century from now. Will it happen next year? No. In the next century? There’s a very strong probability that it will. In the next 10 or 15 years? I think that among the slew of scenarios, the scenario of a return to simplicity is a strong contender.”
Despite understanding the importance of the subject, many managers are still somewhat suspect of your profession. What do you think is the future of futurism?
“Today, many large companies visit us at the Vienna Institute for Advanced Studies, or more accurately their vice presidents for strategy, whose job it is to prepare for the future, anticipate it, build contingency plans, and act according to them. These VPs come to us with a lot of scenarios that they built for two decades forward, and they ask us which of them has the likeliest probability of occurring. They come to us mostly with the following penetrating questions: ‘How could our scenarios be wrong? Where are the regions/events/processes that we’re blind to today?’
“Our work as futurists is to tell them, ‘At point X in time, according to your scenario, you erred, because in this timeframe there is a Y probability of lethal global plague that will wreck all your plans.’ We basically advise them what to do today so as to buy "insurance" and ensure that the scenario they aim for will materialize. Futurism of this kind identifies patterns that today look impossible, whose impact on society and the economy will be immense. I believe that this is the best kind of futurism. Less correct futurism is to present your own forecasts to the firm.”
It’s a little hard to believe that you’re a mathematician. Every conversation with you deals with psychology, the human spirit, social behavior, and mood.
“All my life I’ve used mathematics to understand how the world works, but at some point I realized that mathematical tools and models have a limit. I realized that mathematics cannot, for now, explain the worlds of the human soul and behavior. I emphasis ‘for now’, because I strongly hope that our work at the institute will encourage research in more advanced mathematics, mathematics that will have an answer and explain feelings and moods. Meanwhile, mathematics of that kind has not yet been invented, but such a scenario is not unreasonable.”
Prof. Dr. John Casti is leader of the project on Extreme Events at the International Institute for Applied Systems Analysis. His research examines the effect of social mood on extreme events in society and the economy. He obtained his Ph.D. from the University of Southern California, Los Angeles, and currently resides in Vienna. His book, “Mood Matters”, was published this year by Copernicus Press.
Prof. Casti will participate in “The contemporary revolution & coming trends” working breakfast and the “Global economy, global banking currency wars” of the “Globes” Israel Business Conference 2010.
Published by Globes [online], Israel business news - www.globes-online.com - on December 1, 2010
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