Thursday, April 30, 2020

The most accurate model-based prediction of all times

The "base case" scenario from the 1972 edition of "The Limits to Growth." This scenario described the trajectory of the world's economy on the basis of the data and assumptions that were judged to be the most reliable ones. This run might turn out to have been amazingly accurate some fifty years after it was proposed.


One of the most remarkable features of the story of the "Limits to Growth" study of 1972 is how effectively it was possible to convince almost everyone that it was completely wrong. Amazingly, though, the most vituperated model-based prediction in history may turn out to have been perhaps the most accurate one.

Note how the scenario above, the "base case" scenario, saw the start of the decline around 2010 and the start of the collapse maybe a decade afterward, that is now. If the oil collapse generated by the coronavirus takes the whole economy with it, as it may well happen, then this scenario turns out to have been unbelievably accurate. And that for a prediction made 50 years ago. Truly amazing!

Now, of course, this story has to be taken with some caution, predictions can be right even by mere chance. But, in this case, there is a certain logic in this result: the base case scenario had been already noted by Graham Turner to have been following the real-world data. But that was true for the growth side of the diagram: even standard economic models had been predicting economic growth. The crucial test for the model was to be the sharp change in slope expected to take place around 2010-2020.

Of course, no model could have predicted that the turning point would have been triggered by a word pandemic -- as it happened. But "something" had to give and the virus is not a cause of anything, it is just the straw that breaks the camel's back. The little push that sent the system in a direction where it had to go.

So, it IS possible to use models to predict the future. Another example of a good prediction is the famous one by Marion King Hubbert of the peak of oil production in the US. In 1956, he had proposed 1970 as the likely date and he had been right. On the other hand, predictions are not always so good. In 1970, Hubbert himself had predicted the global "peak oil" for the year 2000. Later on, ASPO (association for the study of peak oil) had estimated the peak for 2010. Both predictions were not so bad, but a little pessimistic if the peak arrived in 2020.

Perhaps the most surprising discovery, here, is how the most vituperated predictions turned out to be the most accurate. Conversely, many economic models that predicted infinite growth were much praised, but they seem to have badly missed the ongoing collapse. Maybe vituperation is a good yardstick to judge whether a prediction is good or bad. In any case, always remember that the future always takes you by surprise. You can't really predict it, but you may always be prepared for it.


16 comments:

  1. Authors of "Limit to Growth" insisted throughout the book that they were not making "predictions" ... Actually their simplified models were assuming we will continue to follow the same patterns we have followed throughout the world in recent history, which was, of course, quite a stupid hypothesis as any intelligent being would take actions to react to such threats.... Human intelligence has been grossly overrated, that's the main failure in this book.

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  2. And I wold still insist that the Limits to Growth is dependent upon whether Humans can make the jump - or evolution - from the Physical to the Spiritual.

    Just some brainfood: https://youtu.be/BzMqlsAGL14

    Humans already have a disadvantage:

    Human Chromosome 2


    This video segment from NOVA: "Judgment Day: Intelligent Design on Trial" reveals how genetic evidence helped to confirm an important component of Darwin's theory of evolution by natural selection: the common ancestry of humans and apes. In particular, it explains that humans have one fewer chromosome pair in their cells than apes, due to a mutation found in chromosome number 2 that caused two chromosomes to fuse into one.

    http://www.pbs.org/wgbh/evolution/library/07/3/l_073_47.html

    An ELE event may be baked into the cake - so to say - but in the end - new life will arise. Because life is intrinsic to the Universe.

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    1. For an accurate model-based prediction of all times one should read the book entitled Climate Change the Work of God by a Gerry Fox. He proves conclusively using no less Carl Sagan's own words that 'extraordinary claims requires extraordinary evidence' and this unknown has done exactly that! Mind blowing his thesis and proofs! Darwin would have been horrified if not ashamed and sought the nearest exit lol!

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    2. "You see the truth of the matter is it’s not industrial pollution that is the cause of our troubles but rather the pollution called sin." And, if this is the case, we are truly doomed!

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    3. Yeah sin and Divine Communication!!!!! As usual everything is written and guess what according to this guy Fox the bible even provides the solution to it all!!!! Beyond that imagine this go to the book of Job and what one finds is this incredible morsel:

      “Have you entered the storehouses of the snow or seen the storehouses of the hail, which I reserve for times of trouble, for days of war and battle?” {Job 38}

      What!!!!????? God is a military commander with his own weapons? Really? Does this then explain what occurred in places like Naples and Fort Carson if not all over the world these days?

      I don't know have we perhaps arrived to what is written in Matthew 25?

      As for being "truly doomed," yeah I suppose with words like this:

      “Nor did they repent of their murders, their magic arts,
      their sexual immorality or their thefts… Rev. 9:21
      “They cursed the God of Heaven because of their pains
      and their sores, but they refused to repent for what they
      had done.” Rev. 16:11
      74
      "They were seared by the intense heat and they cursed
      the name of God, who had control over these plagues,
      but they refused to repent and glorify Him." Rev. 16:9

      This guy Fox apparently has also correctly interpreted the book of Revelation, imagine that? and it mentions what? 100 hundred pound hailstones? What kind of a people deserve that kind of punishment?

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  3. There are three reasons, because I belive in the limits to growth's paper is right on saying there will be a collapsing somewhere from 1970 until 2070

    1st-world is a complex stuff: scenario planning and ooda loops are smart tools for handling complex stuffs in the long run.

    2nd- many Early Warning Signals and Clone Events are already visible right now (especially in Italy and in the Mediterranean area)

    3rd-despite 100 years prediction is far beyond the Economy time scale (the concept of long run in Economy is usually 20 or 30 years in the future, in any case a time scale in Economy is always less then 50 years in the future) and 100 years range prediction is usually matter of Science Fiction only. In any case, I think it is important to remember what Fermi said to his students:"Estimate!, Estimate!, Estimate!". Despite the hard problem of modeling complex stuffs, the unavoidable thinking process's errors usually will compensate themself, simply on using prudential criteria during the estimation thinking process.

    4th-For sure future is not written and it is unknown, but history repeat itself in many different ways, so...
    Mankind thinking process can handle only few scenarios (as if they come from the Natural numbers set). At the end of the day, History always makes one context only (as if the context comes from the Real numbers set). It's impossible to calculate a real number on using a natural numbers set, but it is possibile to identify a range (as if a few set of scenarios do). So even History makes in the long run an unknown and unpredictable one context only, even on having a short cluster of scenarios, it is possible to foresee many clusters of small others variation of them, avoiding the surprise (doing pro-active actions) and being prepared for the worst.

    Unfortunately italian politicians are thieves and stupid and ideology makes them blind: they have already burnt all pro active solutions in the decades ago, because they didn't want to prepare Italy for anything, so it is obvious the worst destiny is emerging in the italian peninsula.

    Today is quite clear what is the path, and how it will be the future in the next decades: it is politically hard to say to the italian people that in short time it will be a massive financial collapsing (default od Italext) then an horrible future in the futher decades will emerge in the italian peninsula because climate change damages and african demographic bomb.

    Today is clear why it is much better for italian politicians and Catholic Church to speak about nonsense stuffs, just for closing the eyes of the italian people, before the end will start in the joy of martyrdom.

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    1. Great comment - and so true.

      *WOW*

      "Today is clear why it is much better for italian politicians and Catholic Church to speak about nonsense stuffs, just for closing the eyes of the italian people, before the end will start in the joy of martyrdom".

      To think that it could have been different. But these days too - shall pass.

      Some dark comedy from George Carlin - but oh so true:

      https://youtu.be/KLODGhEyLvk

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    2. @ TSE May 1, 2020 at 9:29 PM

      Repeating the same thing, it is really boring, so I'll say in very few words as I can.

      North and South America are not in the same position as italian peninsula.

      .North America is a big continent: Italy is not.
      .North America is rich of raw materials, oil, gas and so on: Italy is not.
      .North America have big industries: Italy is not.
      .North America is a bigger producer of food: Italy is not.
      .USA is the most powerful military equipment in the world: Italy is not.
      .Dollar currency will be accept for international market trading by the coalition of the I°word.
      .Italian Lira will be a toxic hyper inflation currency.

      .Pacific Ocean and Atlantic Ocean are big and wide open area, impossible to passing through with small boats.
      .Mediterranea sea is shallow and small sea, italian peninsula is near the African border.

      .North America won't have any demographic threats by South America in the next decades.
      On 2020 South America counts 430.7MLN of people.
      On 2050 South America will count 491.4MLN of people.
      https://www.populationpyramid.net/south-america/2050/

      .Italy will not be able to live on Public Debt, as it has done in the past, since 1980: Financial Collapsing is incoming (ITALExit or Default is incoming)

      .Catholic church in North America is weak: the idea of the joy of martyrdom will not be never accepted by north american people

      .Catholic church in the italian peninsula is strong: they fuc#ed up beyond any recovery the italian people's mind, so the joy of martyrdom is already accepted by the most part of the italian people

      .There is a massive African demographic bomb blowing in front of Italy and Europe and it's too late for any kind of demographic control policy in Africa

      Those days are the beginning of the collapsing for the all italian peninsula: a massive financial collapsing (ITALExit or a Default) before the 31/12/2020 or in any case, at least before 31/12/2021.

      .It is already started up the joy of martyrdom, and the joy of martyrdom will continue for many decades to come in the italian peninsula, as a supreme gift to God to soothe the african demographic bomb.

      The joy of martyrdom is what italian politicians and Catholic Church planned for italian people's future.Italian politicians and Catholic Church looked for the joy of martyrdom of the italian people: they really wanted the joy of martyrdom for the italian people. The joy of martyrdom is what italian people got: nothing more, nothing less

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  4. Ugo, I assert that Hubert was also right. Since 2000 the academics and economists redefined "oil". Oil did peak around 2005. Refinery gain, biofuels, and NGLs and perhaps condensate are not useful crude oil but are now counted as oil. Hubert did not use those new fractions in his calculations and he nailed it.

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    1. Yes, it depends on the definition of "oil". But, out there, everyone is convinced that peak oil never existed and never will exist. We have no more oil? Well, yes, but it is not peak oil!

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  5. Global Peak CONVENTIONAL was in 2005. Fracking Oil doesn't really count, other than it kicked the can one decade. And fracking peaked last year, hence the trouble now. Hubbert and Catton were the two people that I'm most thankful for the clearest picture

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  6. "In 1970, Hubbert himself had predicted the global "peak oil" for the year 2000. Later on, ASPO (association for the study of peak oil) had estimated the peak for 2010. Both predictions were not so bad, but a little pessimistic if the peak arrived in 2020."

    C+C peak was probably in November 2018. If things continue in the direction they seem to be heading, we'll never reach the same volume ever again, let alone the net energy content.

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  7. On Italy:

    ROME (AP) — When Italian Premier Giuseppe Conte said the government would relax some parts of a nationwide lockdown, residents entering an eighth week of home confinement to inhibit the coronavirus dove for their dictionaries.

    Conte announced that starting May 4, people in Italy will be permitted to travel within their home regions for visits with “congiunti,” a formal Italian word that can mean either relatives, relations or kinsmen. Under the lockdown, Italians only have been able to leave home for essential jobs or vital tasks such as grocery shopping.

    https://apnews.com/b06ca4226d52bc87c1a09db1ae34ebf4

    I lived in Italy for two short periods - once in the USAF - the other as a private Defense Contractor - and Southern Italy was a very unique experience. Most were poor - but they were a happy and gregarious people happy to share. Cars were few - most walked or took public transportation - and the telephones needed a gettone - and I still have a gold-plated gettone which I received as a token as I ended my service to the USAF in Italy.

    On the weekend - Downtown Avellino was crowded with groups of walking people - no cars - hundreds of people walking the street - socializing - having a drink - a soda - a gelato - walking arm in arm. Swergio and I used to walk arm in arm - as an American, at first I misunderstood this expression of friendship. What a wonderful memory.

    But even low level Industrial Civilization required a high cost to be maintained. As I sit here and think - I want it to return - but I know that is unlikely - and unsustainable. A lie is easy to believe - the Truth is hard to accept.

    Stay safe & healthy.

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  8. Now climate change effects are starting to kick in big time: i'm guessing they will bring the population peak in your graph back earlier, maybe 2030. Going to be a wild ride.

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  9. Two books were game changers for me . Limits to growth and Overshoot .Life has never been the same since then .

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Who

Ugo Bardi is a member of the Club of Rome, faculty member of the University of Florence, and the author of "Extracted" (Chelsea Green 2014), "The Seneca Effect" (Springer 2017), and Before the Collapse (Springer 2019)