Not that actual knowledge would have hurt – such as a working short-term memory of history that included the LTCM crisis, the popping of the technology bubble, the Asian crisis and similar events that took place after 1972. Of course, scientists who rely only on theoretical, model-based knowledge, disregarding historical knowledge per se, will have difficulty accessing this memory. Perhaps their models simply shouldn’t have excluded the possibility that markets can, on occasion, also be inefficient. In the discipline’s groupthink, however, this would have made their authors outsiders. Still, despite the strong pressure among economists to conform, there are a few of them around. They knew good reasons for suspecting that there would be another crash sometime, because there is no such thing (yet?) as capitalism without a crash. But even they could not know what form the crash would take, where it would begin and how or whether it would end.
That they could not know this is not due to a lack of research, but rather lies in the essence of the matter: in the nature of the social world and the kind of knowledge we are able, in the best case, to obtain about it. The word is now spreading that the social sciences are incapable of making so-called point predictions – predictions about individual cases. Point predictions, however, are likely to be the only predictions that those in politics could be interested in.
For example, while it may be good to know that economic growth contributes to the creation of stable democracies, what policymakers really need to know is whether this will also apply to China or the Philippines in the first decade of the 21st century. But science can’t tell us this. All it can give us are statements of probability with no guarantees for individual cases, whether relating to democratization or election results, military coups, the outbreak and outcome of wars and – of course – financial crises.
There are solid and logical reasons why the social sciences cannot say much about individual cases. Nor can this be changed, even with the most ingenious refinements to their scientific toolbox. Research on social processes will always involve fewer cases than the number of factors that could explain these cases, thus inevitably leading to more than one valid explanation for any given state of affairs. And every future state comes about as a unique result of a unique interplay of many factors – a one-of-a-kind situation for which there is no normal distribution, and whose distinctive features thus can’t be derived from general laws.
This can also be expressed in a more pointed fashion: the essential historical actuality of the social world is proven in the impossibility of imagining a future adjusted for coincidences. History becomes what it is through events that could have also not occurred, and thus would have permitted a different history. Without World War I and the Russian Revolution, which didn’t have to occur, the 20th century would have taken a different course and modern capitalism would have developed differently. Just how differently, no one can know. Without the extinction of the dinosaurs from the impact of a meteorite, there would be no mammals, and thus no humans. We can know this without being able to know what would have become of the dinosaurs if they had been allowed to go on (for example whether their present-day offspring would be eating with knives and forks or with chopsticks).
Historical events such as the collapse of Communism in 1989, the reunification of Germany or the current financial crisis can subsequently be reconstructed as probable or even declared inevitable; but until they have occurred, other events can prevent, delay or modify them, without anyone ever being able to know that they were just about to occur.
What politicians would like even better than predictions are technical instructions for controlling social developments. Politicians like to see society as a machine with set screws: adjust the right screw and the world works just the way you want it to. The task of science is to label the set screws legibly.