Self-Fulfilling and Self-Defeating Prophecies

Everyone knows of self-fulfilling prophecies. Like the placebo effect: a medicine works because the doctor says it will work and the patient believed him (even though it is just an inert pill). Or its twin, the nocebo effect, writes Tim Harford:

“If the doctor tells you a drug may produce side effects, some patients feel those side effects even if given an inert pill.”

 

As you might have noticed, self-fulfilling prophecies work only in areas where people are involved (so no, they don’t work in science). In fact, they are so common that they are considered a “staple” of economics!

“A recession can be caused by the expectation of a recession, if people hesitate to spend, hire or invest. And a bank run is the quintessential self-fulfilling prophecy.”

Then there’s the twin of the self-fulfilling prophecy: the self-defeating prophecy:

“If I credibly predict a surge in the price of oil next year, the surge will happen immediately as oil traders buy low now to sell high later. The forecast goes awry precisely because people thought it was accurate.”

 

Self-defeating prophecies abound in the COVID-19 era, says Harford:

“The UK has suffered about 65,000 excess deaths during the first wave of the pandemic, and 25,000-30,000 excess deaths are attributed to flu in England alone during bad flu seasons. Is the disparity so great that the country needed to grind to a halt? The flaw in the argument is clear: Covid was “only” twice as bad as a bad flu season because we took extreme measures to contain it. The effectiveness of the lockdown is being used as an argument that the lockdown was unnecessary. It is frustrating, but that is the nature of a self-defeating prophecy in a politicised environment.”

 

Politicians love self-fulfilling prophecies. After all, they are peddlers of the promise of a better future. The trouble, of course, is knowing which is which:

“The fact is that some things are false no matter how fervently we wish them to be true. We often plunge into projects with rosy views of how long they will take and how successful they will be, but our optimism only gets us started. It does not finish the job.”

 

On the other hand, a realist would never have invented a mass-market smartphone. never changed the world. We need both kinds of people, and we will continue to have both kinds of prophecies.