The future in crisis

In a crisis, the future seems intangible and difficult to grasp. Yet for social science research, perceptions of the future are an important part of understanding crises. As the current coronavirus pandemic and before it the 2007 financial crisis or the Brexit vote show, to overcome a crisis, sociopolitical and economic visions for the future are needed just as urgently as vaccines or emergency assistance from the state.

A contribution by Lisa Suckert

The coronavirus outbreak disrupted routines, hopes, and goals in many areas of life and made them obsolete. We have had to learn to take things one step at a time – and do so indefinitely. Researchers at the Max Planck Institute for the Study of Societies have been working for some time on projects that explore the role of expectations in driving economic and social dynamics. The importance of this approach becomes especially apparent in times of crisis, when images of the future influence very significantly the perception, development, and ways out of crisis.

A “crisis” describes a sudden negative turn of events with an uncertain outcome. The financial crash, the Brexit vote, or the coronavirus pandemic are considered crises because they took us by surprise. In a crisis, reality departs from the course it is expected to take. Which is why, paradoxically, our ability to foreknow the future thanks to increasingly accurate forecasts raises the potential for crisis: the more specific our expectations are, the easier it is for them to be disappointed.

Crises not only disrupt our immediate plans but also challenge some of the fundamental principles underlying how we imagine the future. The impact of the financial crisis made established securitization practices suddenly seem questionable, Brexit threatened to undermine the foundations of European integration, and the coronavirus crisis is forcing us to review global mobility. The uncertainty that surrounds a crisis is thus twofold: the immediate turmoil is accompanied by a deeper feeling that the world has stopped making sense. In times of crisis, the experience of the past can no longer serve as a model for the future.

Where long-established standards become obsolete and there are no positive scenarios to look toward, for many people the future seems threatening and unfathomable. In the United Kingdom, the critical events of recent decades have seen this kind of shift in people’s perceptions of the future: after the attacks of 9/11, the US subprime mortgage crisis, the European sovereign debt crisis, and the Brexit referendum, there was a decline in the number of British people expecting the economic situation to remain stable or even improve, while the percentage of those who feared it would worsen rose significantly.

Whether an unexpected occurrence counts as a turning point or merely as an unfortunate one-off incident is often decided publicly, in heated debate about whether it is a “real” crisis or “not such a big deal.” Was the financial crisis of 2007 a crisis of the global financial system or a case of certain individuals’ misconduct? Would the Brexit vote actually change anything? And is the coronavirus really more dangerous than seasonal flu? Perceptions of the future are important to these debates because they specify negative consequences, paint plausible scenarios, and make the threat of crisis more tangible.

Such discourse is especially significant in an economic crisis because it influences how the crisis develops. Central elements of our economic order, be it wage labor, entrepreneurship, interest rates, or a stable currency, rely on trust in a shapeable future. If expectations are not met and negative scenarios unfold, however, the “engine of capitalism” can start to falter. The resulting vicious circle is very apparent on the financial markets. In the 2007 housing crisis, negative forecasts undermined trust in the future development. The widespread loss of trust then sparked a crisis that developed first into a global financial and banking crisis and ultimately into a currency and sovereign debt crisis, and brought countries such as Greece to the brink of ruin.

This twofold uncertainty that comes with any crisis has the potential for further economic disruption: uncertain future expectations aggravate economic crises; and crises that are not primarily economic, like the coronavirus pandemic, take on an economic dimension that can be as devastating as the original crisis. Governments are faced with the task of mitigating uncertainties and taking decisive action to create positive expectations. Whether politics is capable of building trust in the future also depends on the persuasive power of rhetoric, however. In the 2012 eurozone crisis, European Central Bank president Mario Draghi’s promise to do “whatever it takes” succeeded in stabilizing the situation on the financial markets and, for the moment, rescuing the euro.

Although aberrations in the global financial system, political divisions, or a pathogen are hardly likely to be stopped by a show of optimism, intense public debate is the only way to sound out problem-solving scenarios and redefine means and ends. If the future can be seen as open rather than uncertain, and a vision of the future can be established that broad sections of the population share, this can create a climate for recovery. The crisis phase will then give way to a phase of confidence.

As Brexit shows, however, this development is not inevitable. The proportion of British people who have a positive outlook on the future was already declining before the referendum. Expectations have continued to decline since, together with a simultaneous rise in the number of people who are too uncertain about the future to give any assessment (“don’t know”). The Brexit vote and the controversies that followed it were driven not by positive future scenarios but by fears and a nostalgic desire to revive the past.

This kind of “future fatigue” is apparent in many societies at the present time. After a crisis decade in which social divisions have become stronger, it is increasingly difficult even under normal circumstances for fragmented societies to establish a shared vision of what a positive future might look like. The future, it seems, is itself in crisis.

This is an extremely unfortunate position from which to be facing the socioeconomic turmoil inflicted by the pandemic. Where progress has already ceased to be a common goal, even in normal times, and there are few future utopias to hold onto, it is all the more difficult in times of crisis to put trust in the future. Overcoming the present crisis therefore requires – at least as urgently as vaccines – sociopolitical and economic visions for the future that can cut across existing divides and restore lasting confidence.