According to Ray Hyman, the term “cold reading” goes back at least to William Lindsay Gresham’s 1946 novel “Nightmare Alley.” But Gresham was a dilettante of sideshows and he maintained that he didn’t make up the term, that it was common among mentalists.
http://www.lib.umd.edu/RARE/Exhibits/HardBoiled/Gresham.html
Whether the term is older than that, or whether it was invented by a believer or a skeptic, it nevertheless refers to a technique that is certainly ancient and worldwide. The technique involves making a combination of general statements that could apply with high probability to a large number of people or even to almost everyone, together with a series of incrementally narrower statements that are generated by information that comes from the specific person being read. That information can be gleaned from physical appearance, body language, scars, the choice of wrist that one wears one’s watch on, whether the person makes eye contact, what tone of voice they use to introduce themselves, or anything even more specific that stands out, such as an unusual choice of clothing, or many other things. The more of this material the reader finds through scanning the person initially, the more specific he or she can become right from the beginning, before any verbal interaction begins. The interaction, from the psychic reader’s point of view, has two goals–one is to allow the person being read to help the reader succeed (as the person generally wishes to do) and the other is to take the items he or she has observed, and the inferences he or she has been able to make about the person based upon those items of information, and to turn them into the elements of a story about the person. Most people who visit psychic readers–either privately or as part of a television audience–or who go to seances are quite prepared to do most of the work for the psychic medium, in the sense that they will try their best to connect the bits of information that come from the medium into a whole pattern in their own lives.
I don’t have the transcript or tape of the TV show in which one of the correspondents to this thread asserts that Randi said that the same reading could be given to anyone, but I would be very surprised if that is what he really said. Such a reading would be very dull, and if that is what he said, that was surely his way to comment on the dullness of the psychic’s imagination. The truth is that readings have both general statements in them that almost anyone will be able to say applies to themselves, as well as specific statements generated by interacting with the individuals who receive the readings. Randi certainly knows this. Nevertheless, a NOVA special once showed him repeating Benjamin Forer’s 1949 experiment, described in Forer’s article, “The Fallacy of Personal Validation: A Classroom Demonstration of Gullibility.” Randi, like Forer, gave each student in a psychology class a sealed envelope with that student’s name on it. He told them that inside each envelope was a personality sketch of the student that had been drawn up for each one of them by a professional psychic, based on their names and their date of birth. The students then opened the envelopes and read their personality sketches. They were then asked to rate how well the description fit them, from 0-5, with 5 being a near-perfect match. Of the twenty or so students in the class, no one rated their description as either 0, 1, or 2. Only one person rated their description as a 3. About half of everyone else rated their descriptions as a 4 and half as a 5. Then Randi had everyone pass their own descriptions to their immediate neighbors and asked them if they could rate whether their neighbors’ descriptions also applied to them.
When they exchanged descriptions, they discovered that they were all the same. In fact, studies have been done that show that the more the subjects are told that statements in such descriptions have been generated just for them, the higher the subjects will rate the statements’ accuracy. Telling them that the psychic was given only their names, for example, produces a lower judgment of accuracy than telling the subjects that the psychic was given their names and birth month, which in turn rates lower scores than those from subjects who are told that the psychic was given their names and birth month and birthdays.
In fact, all the descriptions are always the same, consisting of a collection of statements that Forer gleaned from a newsstand astrology book. They include such statements as: “You have a great need for other people to like and admire you. You have a tendency to be critical of yourself. You have a great deal of unused capacity which you have not turned to your advantage. While you have some personality weaknesses, you are generally able to compensate for them.” Etc. etc. This would seem to be more likely Randi’s point: If a psychic, in some particular case, can’t do better than a string of general statements, Randi would feel no need to offer much by way of an explanation of how she or he came up with such statements.
The difference between such a set of generalities and the more usual form of a psychic reading is not only that a striking reading mixes more specific and imaginative statements together with the general ones, but also that in a psychic reading, the statements, moving from most general to more specific, based on the subject’s responses, are shaped into a life story about the subject.
This appears to be the way it has always been done, whether it was called “cold reading” or not. For more on this, sample the material linked here:
http://www.spirithistory.com
Especially the essays on “trying the spirits” and “discovering wealth.”