Just examine all the predictions we made during 9/11 and the Great Recession.
A deadly global pandemic is a self-evidently world-changing event. But world-changing how? While the coronavirus nightmare is nowhere near resolution, we are awash in predictions about what will come next, how our professional and business lives will be permanently altered, and how they will look a decade from now or beyond.
That’s only natural, and in some ways, it’s necessary: We sense that things will never be the same, and thoughtful speculation about the future helps us cope with the present — and, among other things, suss out economic perils and opportunities. Yes, it seems the massive work-from-home experiment will be here to stay. That virtual education is having its moment. That even meal-delivery subscription companies, which were recently on life support, may once again have a future.
Just keep one thing in mind about these predictions: Most of them will be wrong.
As this moment ought to remind us, the most influential and important events are the ones that emerge spontaneously and with little warning — like the coronavirus itself.
That’s only natural, too. When a cataclysmic event is fresh or still unfolding, it’s hard to see beyond its immediate contours and even harder to imagine what the next unpredictable events will be and how those will affect whatever change is in motion right now. As this moment ought to remind us, the most influential and important events are the ones that emerge spontaneously and with little warning — like the coronavirus itself.
But it’s so seductively easy to double down on sweeping pronouncements: E-sports will replace football and basketball, movie theaters will never return, and telemedicine will become the new normal. (We’ve even made a few.)
Anything is possible, but take a closer look at how often definitive predictions about permanent change are simply extrapolations of recently observable trends taken to some maximum extreme. In other words, the future will be like this new present — only much more so. These predictions are the equivalent of then-Vanity Fair editor Graydon Carter declaring, “the end of the age of irony” in the immediate aftermath of 9/11: a reasonable reaction to a moment that just didn’t hold up. (Carter later joked that he meant “ironing.”)
Look back, for example, at pronouncements forged during our most recent financial crisis. In early 2009, in the depths of the Great Recession, Time magazine declared “The End of Excess.” Conspicuous consumption dating back to the 1980s had caught up with us in the form of a recession so brutal that “now everything really has changed,” wrote Kurt Andersen, who’s built his career on astute cultural observations. “The party is finally, definitely over.” Optimistically, he imagined a healthy societal reset marked by a more temperate and frugal approach to consumption.
This became a widespread view. “Reluctance to Spend May Be Legacy of Recession,” mused an August 2009 analysis in the New York Times. Summarizing expert views, the piece asserted that “the recession has endured so long and spread pain so broadly that it has seeped into the culture, downgrading expectations, clouding assumptions about the future and eroding the impulse to buy.” And the experts predicted that the resulting frugality was no passing trend. “We’re at an inflection point with respect to the American consumer,” Mark Zandi, chief economist at Moody’s, said. “It’s a change in norms,” agreed Robert Barbera, chief economist at the research and trading firm ITG. “The Great Depression imbued American life with an enduring spirit of thrift,” the piece noted, suggesting a similar generational impact: “The current recession has perhaps proven wrenching enough to alter consumer tastes, putting value in vogue.”
To take one specific example of how consumer behavior was predicted to change decisively: the end of SUVs, conspicuous symbols of the old excess. In 2008, GM drastically slashed SUV production in favor of sedans, marking an “end of the SUV era.” Gas prices approaching $4 per gallon “are changing consumer behavior and changing it rapidly,” GM’s CEO said. “We don’t believe it’s a spike or a temporary shift. We believe it is permanent.” Experts agreed: “The trend away from these vehicles is irreversible,” said one analyst. An economics academic added: “The SUV craze was a bubble — and now it is bursting. It’s an irrational vehicle. It’ll never come back.” And after all, according to a widely noted book published in 2009, the rise of gas prices to $20 a gallon was “inevitable.”
All of this was perfectly plausible. But it is not what happened. For better or worse, unpredicted developments such as the fracking boom and other factors put an end to talk of “peak oil.” Today we are “drowning in oil,” and U.S. West Texas Intermediate crude is lately selling for about $20 a barrel. SUVs, of course, came back: They make up about half the market, and in recent years, the production of sedans has been slashed as carmakers responded to the demand for SUVs and trucks.
Some of this proved true but far less lasting than predicted. Consumer spending has risen by about a third since 2009, from about $10 trillion a year to around $13.5 trillion last year, and still accounts for more than two-thirds of the total economic activity. Credit card debt dipped for a few years after the Great Recession but has climbed steadily since 2011 and hit an all-time high in 2019. The global sales of personal luxury goods have more than doubled in the 21st century.
“The SUV craze was a bubble — and now it is bursting. It’s an irrational vehicle. It’ll never come back,” said one economist.
This does not mean that nothing ever changes. While 9/11 didn’t rewire the culture’s sense of irony, it certainly changed air travel; security procedures seem unlikely ever to revert to their earlier form. The terror attacks also led to the creation of the Department of Homeland Security and the passage of the Patriot Act — developments with far-reaching implications.
Similarly, while excess didn’t magically vanish in the wake of the Great Recession, some manifestations of it did fade away. And today’s SUVs have evolved into more fuel-efficient vehicles, and the broader car market includes electric and hybrid models from both mainstream players and the disruptive newcomer Tesla. In what could be considered the biggest move of unpredictability, GM eventually did dump its absurdly excessive, gas-guzzling SUV, the Hummer — only to recently announce that it plans to resurrect the brand back in electric form.
In other words, things really are different, just in more complex and subtle ways than predicted. Because if you’re considering a time horizon of 12 years as opposed to 12 months, other things will happen — good and bad — that you cannot foresee but that will have some effect, however oblique, on whatever it is you are predicting.
This is not an argument against predictions (and it is certainly not a critique of any specific prediction). Speculation about what might happen is useful; it can actually start interesting discussions about a future in which shareholder rights aren’t so predominant or provoke us to imagine the implications of cities segregated by immunity status. Predictions of death rates or economic consequences can help shape or inspire responses that prevent those predictions from coming true.
But that’s why, when someone makes a sweeping declaration, the best response is to start asking questions. Every prediction is just a point on a spectrum of possibilities to consider, and that will be influenced by developments no one has thought of yet. Predictions look like declarations that end the conversation, but it’s much more productive to think of them as exactly the opposite. After all, if this pandemic has taught us anything, it’s that the future is always more unpredictable than it seems.
By Rob Walker