The old adage that hindsight is 20/20 holds that looking back at a situation or event provides a clearer understanding of the situation or event and what could have made it, or could have been, better.

Forget about better – what could have been worse as far as the South African economy during 2020 is concerned? But is it really “the economy, stupid”, as US political consultant James Carville famously said? I will leave that for you to contemplate; this piece is concerned with economic hindsight.

When you think about 2020, do you perhaps have a hindsight bias, also known as the knew-it-all-along phenomenon? This is the tendency to perceive past events as having been more predictable than they actually were. In essence, it is the belief that you would have been able to predict an event.

With respect to the South African economy, I would venture to guess you would have expected it to have been bad, for that is the very nature of the economy. What you may not have predicted is just how bad it would be. The state of the economy is best explained by the 1840s fable, The Three Little Pigs. It is about three little pigs that build three houses using different types of material. In subsequent interactions with a big bad wolf, the first two little pigs’ houses, made of straw and sticks respectively, are destroyed beyond repair. The big bad wolf is, however, unable to destroy the third little pig’s house, made of bricks. The present state of the economy may lead one to imagine that it was first built of stone and then dismantled before being reconstructed using straw and/or sticks.

But I regress. If you do not have a hindsight bias with respect to 2020, do you have a memory distortion of it? Although not a memory distortion, hindsight bias is similar to two memory distortions: the misinformation effect and false memory.

The misinformation effect occurs after an event, where new information received after the fact influences how a person remembers the event and can be called post-event misinformation. This is evidently an important issue concerning eyewitness testimony.

As for false memory, it takes place when suggestions or additional outside information is provided to distort and change people’s memory of events, which, at times, can lead to the creation of new memories that are completely false. This can also lead to false memory syndrome, which is shared by multiple people and is sometimes called the Mandela Effect. If it is not a case of bias, or a distortion, it could simply be a case of memory gaps and errors, where one remembers events that never occurred, or remembers the events differently from how they actually happened. The reasons for this include being emotionally involved in the situation.

Having considered hindsight, you should set your sights on two other ‘sights’: foresight and insight. Foresight will be the subject of the next instalment. This leaves insight, where, during the course of 2021, this column’s sole objective will be to provide a deeper understanding of the South African economy and what makes it tick.

With the South African economy in dire straits, some optimistic commentators will encourage you to take solace in the fact that, eventually, there will be an improvement; the law of averages dictates that. At times like this, remember what the economy was only a few years ago rather than a few months ago.

Before tagging the year 2020 as annus horribilis, which many believe is Latin for ‘horrible year’, when it actually means ‘terrifying year’, hold on to your hats – 2021 will be far, far worse.