Saturday, July 31, 2010

Speculation and the B.P. Oil Spill

I've been thinking about the B.P. "Oil Spill" lately. As is the case with most complex human events, we can anticipate a rash of speculation on its short-term and long-term consequences. Of course, the global media has been rife with speculation, as experts line up to give their official assessments. What will happen to the ecology of the gulf? What will happen to the fishing industry? What will happen to the tourist industry? What will happen to BP? In light of this speculative frenzy, I thought it would be worthwhile to add a few speculations on the nature of "speculation."

First, a few observations. The art of speculation is a direct consequence of the evolutionarily-based human need for us humans to predict and control our natural and social environment. In fact, we only use the word "speculate" when we are dealing with the uncertainty wrought by complex events. Generally, long-term speculations are more prone to error than short-term speculations. We speculate as individuals and in groups. Speculation within groups is often, but not always, marked by the absence of consensus. And finally, in our culture we tend to "believe" and "trust" the speculations of experts; that is we are more likely to "act upon" the speculations of credentialed authorities. That's why news media outlets seek out speculators that hold advanced degrees in biology, engineering, economics, and law. The hallmark of group-based speculation in the twenty-first century is the ability of experts to market their speculations via the mass media and attract large numbers of believers and non-believers. In modern times, the most authoritative speculators are scientists.

Our desire to predict the unpredictable has spawned a vast speculative industry, where individuals and corporations earn hefty paychecks by marketing their speculations. Now rational humans want to act on the basis of reliable information, therefore, we must try to distinguish between variable degrees of reliability of expert speculators and the information they convey. Individual and corporate experts have track records; that is, the accuracy of previous speculations can be an important in deciding who to trust. Unfortunately, experts usually do not often disclose their track records, and therefore, you may not be able to determine their reliability. Some experts are more prone to speculate than others. Because speculation only takes place under conditions of complexity, some sciences generate more speculators. Economists are probably the most speculative.

Now back to BP. Many rational persons living on the Gulf coast have to act based on imperfect information offered by speculative experts. Will the oil slick affect their livlihood? Should fishermen move operations to another area? Should they stay put and draw unemployment and/or draw from the BP relief fund until future becomes less clouded? Should fishermen change occupations, go to college and become credentialed speculators and earn a living predicting unpredictable events and/or teaching the science of speculation? As a credentialed speculator (with a rather dismal track record), I would offer the following speculation. Given our innate human desire to know the unknowable and the ability of credentialed speculators to market their speculations via and ever-evolving media technology, I would speculate the speculating industry and the industries that support that industry (colleges, universities, media, etc)have a very rosy future.


writewriterandtutor said...

I love this one Ron! Totally unpredictable tact--but very interesting angle and of course, I agree with your conclusion.

See, you said no one reads your blog--it may take me a while but i try to read it.

Freedom's Philosopher said...

Thank You WWT. Check out the follow-up.