How we think about the past influences how we think about the future, including what lies ahead for real estate. With many medium and long-term trends at play, not the least the curveballs thrown by the last pandemic, investors must be agile and responsive as views of the future change.

Traditional historians and deterministic views

Most traditional historians take a deterministic view of history. In their view, past events were governed by the forces of history, whether economic, psychological, or cultural.

From this perspective, the historian’s job is to understand those forces to explain how we got to where we are today. Meanwhile, they regard considering counterfactual eventualities as a frivolous activity.

As E.H. Carr, author of the 1961 book “What is History?” wrote, “Dragging into prominence the forces which have triumphed and thrusting into the background those which they have swallowed up is the essence of the historian’s job.”

A deterministic view of history is attractive. It makes the past more explicable and suggests a reason for how the past has played out. It offers the comfort of certainty. And comfort helps popularize historical books and TV shows.

Challenging determinism: acknowledging change and human agency

However, Niall Ferguson argues that, while seductive, the deterministic view of history is deeply flawed. He states in his book “Civilization,” “It ignores the role of contingency in human affairs, and it fails to appreciate the power of human agency.” A more accurate view of history acknowledges the role of both chance and human choice in shaping the course of events.

Ferguson argues, “The search for universal laws of history is futile.” Instead, we should see the present as one of many potential eventualities that various tipping points and competing factors could have shaped.

The power of contingency and unpredictability

Many find the idea that randomness played a significant role in shaping our past unnerving. To think that historical events could have played out very differently and that today’s world is a result of chance is disturbing.

Why does this matter? Because the tendency to seek comfort in a deterministic understanding of history leads us to underestimate the role of chance and the extent to which the future is unpredictable.