There’s a lot to be said for statistical analysis. Aside from the obvious, “There are three kinds of lies,” statistics help interpret the real world into manageable bits that our brains can digest. Because, if all we took in was raw data all the time, it would be difficult to make sense of anything.
Once information [from sensory organs] is processed to a degree, an attention filter decides how important the signal is and which cognitive processes it should be made available to. For example, although your brain processes every blade of grass when you look down at your shoes, a healthy attention filter prevents you from noticing them individually. In contrast, you might pick out your name, even when spoken in a noisy room. There are many stages of processing, and the results of processing are modulated by attention repeatedly.
Statistics works much the same way that our brains filter out “noise”. By collecting data points from related information, we can visualize or understand more complicated systems of data that may otherwise be beyond our grasp.
When we look at a positive trend in the stock market followed by a precipitous decline of share values it can look like the world is coming to an end. But if we retrace the historical data points of the market we recognize its cyclical nature and understand that, at some point, the decline will cease and the market will rise again.
Mark Twain was attributed with the quote as saying, “History doesn’t repeat itself but it often rhymes.”
So I guess what I’m saying is while we may not have the specific facts of a situation to rely on, we can believe that there is a historical context with which we can view it. Knowing that the Spanish Influenza killed approximately 50 million people between 1918-1919 isn’t as important as recognizing that these kinds of pandemics happen, such as in 1957, 1968, and 2009. Investigating what worked and what didn’t can help us today.
And these cycles occur across all industries, geopolitical affairs, and economies. It’s just a matter of finding an applicable context to compare then to now.