Using History to Improve Forecasting

“There is no better teacher than history in determining the future.”
– Charlie Munger

To better predict the world’s future, one must understand it’s present. To better understand its present, one must understand its past. Understanding the past is best done by history books. In Susan Wise Bauer’s History of the Ancient World, we learn of environmental problems causing grain yields to decrease throughout the Fertile Crescent. Decreasing grain yields caused social schisms. Social schisms caused uprisings, which developed into civil war. In the modern Middle East, rising grain prices led to…social schisms and civil war.

History does not always repeat itself. There are differences between the ancient environmental problems and those that led to the Arab Spring and the Syrian Civil War. However, history provides certain patterns that make for useful knowledge. If you can identify how modern events are similar and different from past events, prediction becomes easier. Nobody can become a Nostradamus from these techniques. Complete accuracy is not possible, nor should it be the goal. Rather, one should look at long chains of cause and effect, and attempt to estimate where the trends are going, as well as the changes in the trends. A developing economy does not have high growth rates forever. The trend must stop at some point. History books tell us an enormous amount about the chains of cause and effect that led to the present.

As useful as this information is, I have not met a single person who reads history books. After trying to find good history books to learn from, I can see why. Most are terribly written, and terribly specific. Biographies of Napoleon cannot get anyone to understand the cause and effect patterns of the world. Details can be important, but knowing about World War I will only help identify issues similar to those that caused World War I. Much of the time, these problems will not play out as expected. If you see current events from the lens of WWI history, you will always assume that the world is on the brink of destruction and war. To avoid getting lost in the details, we must focus on general histories.

The other requirement is to have a multicultural understanding of history. Some readers may find multiculturalism a worthy goal in and of itself. Some may feel the opposite way. I have no cultural preference as such. I’m not trying to learn multiculturalism because of any political upbringing. Remember, the goal is to forecast more accurately. My liberal readers will be willing to learn multiculturally for no utilitarian reason. Conservatives may not see the usefulness of the multicultural approach.

Skeptics may want to know what is possibly the most important example of multicultural learning. A French translation of Sun Tzu’s Art of War became available in 1772. A minor French officer began to read it. His name was Napoleon, and he used Sun Tzu’s tactics to create an Empire. Be like Napoleon. Learn multiculturally.

Multicultural history is also important for the old adage of an increasingly intersecting world. Culture clash and transnational movements will both take place. Political maneuvering and war between different nations will occur on a scale never seen before. This makes the history of Africa important even to a Chinese person, and the history of China more relevant to a European.

Besides giving a general overview, and providing histories from different parts of the world, one’s history bookshelf should contain books that are easy to read. Reading Toynbee is not something most people do for fun. Good history books are clear to understand and easy to read. The clearer the better. You can read Hegel, Toynbee, and Spengler after you’ve gotten the basics. Philosophy of history books may not actually help with prediction anyways.

If you learn history through reading books that are both general and multicultural, you are (hopefully) able to make better predictions with the time-tested mental models they provide. There is no way for you to do that if you’re not committed to finding and actually reading through these books. I’m not sure how well this actually works, but I have an account at the Good Judgment website, so hopefully I will be able to update this every so often to see my prediction scores.

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