Through a Glass Darkly
Creative Imagination, Political economy
With rationalism, scientism, big data and artificial intelligence promising answers to everything, we have lost sight of the importance of creative imagination and foresight.
The paradox is that contrary to conventional wisdom, confronted by an increasingly complex, interconnected and uncertain environment, imagined futures dominate our lives. We are shaped by our simulations, predictions and mental frameworks, continually re-inventing the world around us. We communicate our imagined futures through the stories we tell.
Imagination is the engine of creation, a primary driver of innovation and a source of uncertainty. It underpins our ability to transcend the limitations of knowledge and static, reductionist models.
Yet the central role of imagination, as Jens Beckert and Richard Bronk put it, is “largely ignored by economics and mainstream social science” and “receives relatively little attention even in the disciplines of philosophy, psychology, and neurophysiology.” For followers of conventional economics, you might think that “Imagination plays little or no part in economic decision-making, and that—at system level—the economy is not a creative process at all”.
In other words, economics has long relied on the idea that ‘rational expectations’ rather than “fictional expectations” drive economic behaviour. It is blind both to public sentiment and to the waves of invention that form the foundations of geo-political and economic systems. The result: shockwaves too often take economists and the world by surprise.
Against this background, we have to look beyond economic models, to emerging narratives, sources of invention and to ideas for predictive models of how the world works. The implications of this perspective—a perspective that has long underpinned scenario and foresight development—are important: in an open future, there are few structural fundamentals. Everything is fiction, even if rooted in theory and past evidence. 
The messy reality is that everyone, from corporate marketeers, to inventors seeking funding, to central banks, investors, economists and political leaders, invents imaginary worlds. They are expressed in the form of complex and often unconsciously shared narratives, either as navigational frameworks, or as part of a creative competition to shape information space. In other words, narratives are the outward signs of imagined futures that are primary drivers of the real world.
Imagined futures, narratives and weak signals are predictors of emerging reality. Yet they only work for as long as people believe in them. Often fragile, they can collapse overnight, as recent events have shown.
Edge Of Chaos: searching for unknown unknowns
Most leadership teams live with the fear of the big surprise, the out-of-the-blue development or event that leaves no time to prepare. The shock. The unthinkable. The unimaginable.
There is growing sense that political and corporate leaders around the world fail to grasp the scale and the urgency of wicked problems we face. These range from the strategic risks facing water, energy and transport, to climate threats that may overwhelm the world’s major cities. The same applies to risks to financial market stability; to inequality; the risks of embedded inventive and determined terrorists; the raging cyberwar beneath the surface; and more recently to the perceived failings and threats of artificial intelligence, robotics, bioterror and globalisation.
This is more than uncertainty that can be assessed according to likelihood, impact or vulnerability. It is more than Knightian or so-called ‘radical’ uncertainty. We live in an interdependent and increasingly complex and unpredictable world.
The challenge is no longer primarily about what we think about the future, but how we think and feel about it. Ultimately it is about how we imagine the future.
Someone Raises An Important Question
To put this in an historical context, a series of events have led to a crisis in confidence, a sense of disillusionment and increasing political turbulence.
In 2009, economists at the London School of Economics were asked why no one had seen the financial crisis coming. After some deliberation, their response was that there was “a failure of the collective imagination of many bright people”. This created headlines, because it was Her Majesty Queen Elizabeth asking the question. For economists, this was a turning point that still casts shadows.
What was missing at the time was a deeper exploration of what ‘imagination’ means in the practical terms of politics, the media, business, finance and the so-called ‘dismal science’ of economics.
This is surprising, because this was not an isolated example. Nor was it entirely new. In countless reviews of catastrophic events from the Challenger disaster to 9/11 and Deepwater Horizon, the same message echoes through time: failure of the imagination. Not failures of big data. Or predictive analytics, simulations, artificial intelligence or scenarios. Nor experts per se, or raw intelligence: imagination.
Why then is the importance of imagination so often dismissed?
It turns out that some lessons have been learned. The 9/11 Commission Report “reproached the intelligence agencies for their failure to imagine the future – particularly future catastrophe – and recommended that these therefore should ‘find a way of routinizing, even bureacratizing the exercise of imagination.’”
The recognition that future security depends not simply on knowledge or intelligence, but on focusing imaginative thinking about extreme futures has since begun to permeate the intelligence community. Imagination is gaining recognition and to some is establishing “epistemic primacy in relation to the unknown and the unexpected.” Novel techniques that combine human imaginative talent, domain expertise, narrative discovery, an understanding of the role of emotion and feelings and artificial intelligence are emerging.
Complexity, Uncertainty and Turbulence
We need to understand how growing complexity has undermined confidence in experts and their ability to model the world and provide some sort of assurance of predictability and control.
There is recognition that systems follow an evolutionary path, from low connectivity and stability, through innovation and novelty, to accelerating levels of interdependence, complexity, uncertainty and chaos.
To a point, increasing complexity is a source of positive growth, driven by creativity, replication and adaptation. For some time, we have seen the benefits of this through increased diversity; syndicated risk; better performance and quality through specialisation; and greater inventive capacity. Many industries have created rapid system-wide innovation and raised living standards for vast numbers of people. Ideas circulate at ever-increasing rates, creating a globally open innovation landscape in which imagination plays a central role.
Systems often fail as confidence in an imaginary future world evaporates. Markets move long before events themselves become a reality, as changes in sentiment towards the oil industry illustrated towards the end of 2016. These changes gained momentum to the point where Shell made commitments to reduce emissions, and global insurers like AXA cut support for coal and other polluting industries.
Complexity risk is becoming the most significant global challenge. There is a gap between the chaos around us and our understanding of the world, increasing pressure on political leaders to articulate a coherent vision that builds support. (see ‘No Vision’).
This is leading directly to the recognition that imagination has a vital role to play. It addresses the problem of how to think about the future and what constitutes knowledge in an open future.
David Tuckett makes the point that “Financial markets appear to be the quintessential example of a market which depends nearly entirely on human imagination and emotion.”
Human Time Travellers
One of the consequences of all this is that the world is extremely sensitive to news and social media manipulation, and ‘digital wildfires’. These are primary drivers of political turbulence.
Whilst everyone has the capacity to imagine, political leaders, policy makers, economists and risk analysts rarely explore extreme outcomes and if they do, they reject them as highly improbable, containable, or both. Conventional risk analysis tends to focus on ‘high impact, certain’ risks and at best how they are interconnected. It gives less attention to the ‘high impact, uncertain’, or ‘unknown unknowns’ where creative breakthroughs will emerge and the real dangers (and opportunities) lurk.
Political leaders who grasp the complexity and speed of both natural and man-made systems face a dilemma. If they attempt to convince a sceptical public to back action on unlikely events, they put themselves at risk. They face accusations of irrationality, or of perpetuating inequalities, as Emmanuel Macron has discovered. Exchanging short-term economic losses and psychological costs for some uncertain future benefit, however important, demands vision and leadership.
All this characterises a short-term, technocratic culture in which critiques of human irrationality far outweigh praise of imagination and foresight. Imagination is for children and artists, not grown-ups. There is more excitement about artificial intelligence technology and the idea that Deep Mind’s Alpha Go shows signs of creativity and intuition – machines mimicking human intelligence – than imaginative thinking.
There is, however, hope. The ‘how do we think about the future?’ problem has become the focus of a growing number of neuroscientists and experimental psychologists who have unravelled some of the infinite mysteries of how imaginative simulation and prediction are core functions of the brain. Experiments show that the parts of the brain that deal with memory are shared with the parts that deal with thinking about the future.
We are, in a practical way, capable of transporting ourselves back and forth over time. We are omni-temporal. The past and future are imagined and constantly re-created. This may seem trivial, but the implications are profound. Many people tend to think about the future by re-combining past events and projecting them forward. Rather than imagine a new future, they instinctively select from previous experience. The result: they tend to re-invent worlds that will never return, repeating errors and failing to see possible futures afresh.
The strange but important implication is that to escape the past and begin to identify those elusive unknown unknowns, we need to create vivid memories not of the past, but of the future. We must create new imaginary worlds so emotionally and experientially compelling that they trick the brain into storing them — along with the old. Worlds so imaginative that they win the contest with the past. This is why science fiction is so powerful and why richly described scenarios and war games work, by simulation.
Simulators And Daydreamers
Another paradox: we spend a lot of time thinking about the future. We are time machines: according to some research, daydreaming is time travel in the mind and a default, reflective state.
The problem is that for some, imagined futures focus on uncertainty, which breeds anxiety. At the same time, sustained invention involves letting go and setting sail in an ocean of chaos. This is the heart of human creativity.
To complicate things, simulations, both as part of our mental theatre and as a method by which to explore possible futures, are influenced by emotional and cultural factors. For example: vividly described, memorable and emotionally engaging futures seem more likely than rational projections and statistical probabilities.
These factors influence how possible futures are judged in the present and how unknown unknowns, which are about possibilities rather than probabilities, may emerge. In other words, weak simulations appear unlikely — something risk managers rarely grasp, with sometimes catastrophic results. Weak signals and anomalies, the vital signs in imaginative foresight and the search for unknowns, are often ignored.
As Andrew Oswald and his colleagues have demonstrated, this is not just about our personal lives: emotion pervades global politics. Dominique Moisi demonstrated the same point in The Geo-Politics of Emotion, where he argued (to oversimplify a deep argument) that the West is experiencing emotional fear; the Middle East humiliation; and much of Asia, hope.
The lack of a compelling, emotionally engaging and sustainable future vision for the EU, or the UK’s Remain campaign, of Brexit itself, or global trade are all examples of how weak imaginary worlds are a vital factor in the politics of the here and now.
If experimental evidence about futures thinking emerging from neuroscience and psychological studies remain fragmented, the picture takes shape if we think of the pervasive role of stories.
Crucially, to recap, imagined future worlds emerge when they take the form of meta-narratives and stories. As Beckert and Bronk put it:
“In other words, imagination is not only the root cause of uncertain futures; it is also one of our principal tools for coping with them, however, it is only when imaginaries are embodied in narratives and models that they become determinate enough to structure action at the social level and become a suitable object of empirical study.”
We are habitual, natural storytellers, which means the qualities of stories have a direct bearing on how we think about possible future events.
Stories are the tools we use in simulations, scenarios and in creating foresight. At their best, they are vivid rehearsals for what might be. They are the tools we use to create memories of the future.
They have another important role, which is to help meet the grand challenge of understanding complex uncertainty, interdependency and adaptation over time. If complexity creates cognitive overload, then stories are particularly important in exploring how multiple relationships and narrative threads might interact over time.
If we can better understand the narratives and begin to decode underlying forces, we can better predict shocks and simulate outcomes. Financial markets are fragile not because of fundamentals, but because they “are best viewed as markets in competing and shifting emotional stories about what those fundamentals might be”.
In the terms used by complexity theorists, stories are also about attachment: they explain why brands work, how we make meaning from political alliances and how commercial organisations create visions and a shared sense of purpose. As Yuri Harari points out:
“Much of history, revolves around this question: How does one persuade millions of people to believe particular stories about gods, or nations, or limited liability companies? Yet when it succeeds, it gives sapiens immense power, because it enables millions of strangers to cooperate and work toward common goals.”
If we can better understand the stories and begin to decode underlying forces, we can better predict shocks and simulate outcomes. Financial markets are fragile not because of fundamentals, but because they “are best viewed as markets in competing and shifting emotional stories about what those fundamentals might be”.
The problem is that stories can also become engrained, take on the status of mythical truth and stand as a defence against change. At their worst they embed the idea that there are universal, timeless and unchanging rules that determine all futures, where in reality futures are open, invented and novel.
At their best imagined worlds, if richly described in the form of multi-threaded and multi-level narratives, with emotionally engaged protagonists, stick in the memory. The strongest stories and scenarios capture the true complexity of uncertain futures, the emotional power of extreme possible outcomes. Peter Dodds likens sustainable narratives to pyramid structures, with headlines at the top and substantive foundations and layers in between. If one layer is missing, the narrative sooner or later fails.
To recap, how we think about, feel and imagine the future is as important as what we think might happen.
Imagined future worlds and the stories that express them are cultural realities because they act as the foundation on which people live their lives. They determine how we evaluate choices and decisions about our aspirations and desires, shaping our sense of purpose and direction. They influence everything from expectations about investment outcomes and asset allocation priorities to consumer behaviour, commercial thought leadership and collaborative political and social action.
For these reasons, we need a new seriousness about imagination that transcends the cultural obsession with science, hard facts, evidence, explicit knowledge and the short term.
Imagination is the source of creativity and obviously plays a central role in invention and innovation. What is less obvious is that open media has not only driven an explosion in replication and combinatorial invention for millions, but has given imagination a central role in cultural life, not just for artists, writers and inventors, but for all.
This is a relatively new cultural development and is driving mass innovation. It has opened up seemingly infinite horizons for local inventors to adapt global designs, create original products and services and develop new strategies. It is leading directly to the emergence of an enormous diversity of imaginary worlds – alternative future realities shaped by competing visions of technological and cultural futures.
What is less well-known is that imagination is the crucial missing link in exploring potential catastrophic risk, in identifying unknown unknowns and dealing with the unexpected. It is establishing a primary role in risk management and security, as a ‘new’ way of thinking about the future and as a form of knowledge.
In other words, imagination is at the heart of culturally novel economic and social evolutionary development. It is not simply driving innovation, but also new social structures. Imaginary worlds are political.
As Einstein put it:
“I am enough of an artist to draw freely upon my imagination. Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
The future may be open and cannot be known, but it can be imagined, simulated and invented. We can explore and even begin to predict. There should be few surprises.
If our possible futures are cloaked in the shadows and we cannot free our imagination, we are destined to continue to look through a glass darkly.
 Jens Beckert refers to ‘fictional expectations’ as a primary driver of the global economy (New Frontiers in Economic Sociology, March 2016)
 National Commission on Terrorist Attached upon the United States 2004, quoted in ‘Politics of Catastrophe’ by Aradau and van Munster, 2011.
 Aradau and van Munster, Politics of Catastrophe.
 Source: Hartwell Paper on Climate Change
 David Tuckett: Minding the Markets
- Uncertain Futures: Imaginaries, Narratives, and Calculation in the Economy by Jens Beckert and Richard Bronk ↑
- Jens Beckert: Imagined Futures ↑
- These include our own development. ↑
- David Tuckett: Minding the Markets ↑
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