Playing With Fire and Collapse Part 5

Reference: Playing With Fire and Collapse Part 4

In response to the comment of Ferdinand Banks that is copied below, this is what I said:

Ferdinand, please take the whole sentence and the context in consideration.

You seem to be right under a mechanistic thinking mental model that doesn’t consider the environment. However, under a systemic thinking mental model, the interdependencies are very important. These are the components playing in the environment: 1) In simple term; 2) the world is undergoing a revolution - transition - from a stable state to hopefully another stable state; 3) In the past stable state –until the oil crisis - forecasting gave us reasonable results; 4) as uncertainty increases during a transition; and 5) forecasting just does not work anymore.

As for the environment you have the paragraph: The attempt to forecast future economic behavior is often taken as the proper and maybe the only important test of an economic model. The ability of a model to forecast future conditions is sometimes described as the gold standard for model evaluation. But seldom in the economic literature is there any claim that a model forecast is better than a naïve forecast of simply extrapolating from the recent past. Actually, I believe that attempts to forecast future conditions is a losing game and has been a diversion that has carried economists away from far more productive work.

The correct interpretation is different and valuable using the correct mental model.

Under a generative dialogue you are different than your opinion. While understanding Imy opinion may be wrong, I think your opinion was wrong. You are, however, a very intelligent man and a valuable member of any generative dialogue. Please keep at it.

Best regards,

José Antonio

This is what Prof. Banks said:

"Forecasting doesn't work any more", you say Jose. Kind of reminds me of what Kenneth Arrow's commanding officer told him during WW2 when Prof Arrow was doing weather forecasting for the US Air Force: 'We know that the forecasts are worthless, but what would be do without them.'

The correct interpretation here is that worthless means different things for different people. If forecasting makes any sense at all, which it does, then it was better that Captain Arrow did it instead of 'Yardbird' Bill.