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The Paradox of Forecasts

A forecast is an expectation that a particular future will become the present.

However, this expectation of the future alters the present: I will fetch the map and plan how to reach my goal via country roads. The actions in the present try to alter the expected future! As many have this expectation, however, and many wish to avoid the undesired queues on the motorway, every Sunday they all find themselves queued on the country roads. Here is an alternative example: Because everybody expects the stock market to fall, many quickly sell their shares in order to protect themselves from the losses and therefore they see to it that the share prices fall.

One’s own expectations regarding the future, therefore, change the future just the same as the expectations of others do, regarding the future. And one observes the forecast of others and adapts one’s own expectations carefully to this (and then decides to use the motorway after all or to keep the shares).

The paradox is, that a forecast has an effect on the occurrence of the forecast. This referring back heightens the insecurity and raises the need for forecasts. Therefore, presumptions about the future alter what they assume, and they assume it, in order that the future will be different than assumed. Otherwise, why the warnings? “This will go wrong!” we tell the child, so that it doesn’t go wrong!

This strange structure of time plays an enormous role in organisations, because expected futures play a central role in many decisions. So we handle the future with uncertainty: the currencies are warnings, forecasts, future research, extrapolations, disaster scenarios, doctrines of salvation – all methods for purchasing present day behaviour, which is different than would be expected without these currencies.