Base Effect

A headline shouts that profits doubled this quarter. Perhaps the company improved brilliantly. Or perhaps last year's quarter was so bad that doubling was easy. The drama lives in the comparison, and the comparison lives in the base.

This is the base effect: every percentage has a silent partner — the starting point. A rise from a low base looks heroic; the same rise from a high base looks impossible. Growth statistics, infection rates, test scores — all are shaped as much by where they began as by what happened.

The first principle is arithmetic, not cynicism: a rate of change is a ratio, and a ratio hides its denominator.

So whenever someone shows you a percentage, ask the unfashionable question: from what base? A number without its starting point is a story missing its first chapter — and you know how misleading that can be.