RE: [OPE] estimating the severity and duration of a capitalist economic crisis

gerald_a_levy@msn.com

Some of the obstacles (not the only ones) to forecasting are:

- the characteristics of the subject matter we seek a forecast for
- dogma & ideology & ethics
- cultural resistance to forecasting
- bad theory, concept formation and problem formulation
- lack of comprehensive data
- psychological/emotional factors
- inadequate knowledge of relevant history
- lack of recruitment of suitable personnel
- inadequate training of forecasters
- poor organisation & communication & division of labour
- property rights
- political or military pressures
- the pressure to generate a forecast before you have done what it takes to make the forecast
- feedback effects (the effect of the forecast on the course of events)
- lack of finance
- lack of freedom & privacy
- the exploitation of ignorance ("in the land of the blind, one-eye is king")
 All of these aspects and others impact on the problem of overestimation and underestimation - it may take quite a bit of analysis to explain why a forecast succeeded or failed.  
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Hi Jurriaan:

Yes, but when I wrote previously that "we don't and can't know" and
"it remains to be seen what will happen" I  was referring specifically
to the problem of forecasting developments in *capitalist* economies.

The problem with forecasting, using Marxian terms,  relates most 
fundamentally, to the two-fold character of the commodity, i.e.
it is a consequence of the dialectic between use-value, value, and
the value-form.  Using more standard economic terms, the problem
concerns the inherent uncertainty and risk associated with market activity.

In recent posts, where you have emphasized such issues as consumer
confidence, you have recognized part of the problem (a part 
understood well by Keynes): the link and feedback between uncertainty,
risk, and expectations.

This is not to say that I think economic forecasting is a total waste of time.
Rather, it's to highlight it's inherent limitations. In general terms, I think
it is better to apply a kind of "fuzzy logic" about future possibilities under
capitalism where different "scenarios" are identified rather than thinking of 
there being only one probable outcome. There are just too many variables 
to think that only one outcome is possible and/or probable - unless you want 
to employ heroic assumptions about the variables and parameters of the 
forecasting model. And, if the model does yield a single 'probable' outcome 
based on such heroic assumptions, then its merit is tied to the validity of 
the assumptions made.

If Gil is listening, perhaps he could be able to compare standard economic 
forecasting methods to a game-theoretic approach?

In any event, the crucial issue here that I wish to highlight is that 
economic forecasting is more likely to be 'on target' in some modes of 
production (pre-capitalist and post-capitalist) that others (capitalist).

My own time limitations prevent a more detailed reply at this point. But -
as always - thanks for your contributions. 

In solidarity, Jerry

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