What does it refer to in the following sentence? Who is the subject of would show? I struggle to understand the meaning of the sentence. (emphasis added)
We assume that the present is a much more serviceable guide to the future than a candid examination of past experience would show it to have been hitherto.
The present.
We are thinking about a number of situations where we consider what is happening now and using that as a guide to what happens in the future.
We assume (assert) that the present is serviceable guide to the future
Then we consider our past experience, and think about occasions when the "now" in the past was actually not a good guide to the "then future".
So our past experience has shown that "the present" was not a good guide, hitherto it (the present) has not been a good guide.
Yet (for no reason here explained) we assume that the present is a guide to the future. This may well be an observation as to how humans actually behave.
In this case, it refers to "the present," and the subject of would show is "a candid examination of past experience." This sentence means:
We assume that the present is a better guide to the future than a frank look at the past tells us it is.
That is, in the past until now, we have not been able to make good predictions about the future based on information we have in the present. However, we are assuming for what we are doing now that we are able to make accurate predictions about the future from the information we have in the present.
I hope that these definitions in particular will be helpful (from Oxford Dictionaries):
show
Demonstrate or prove:
"Experts say this shows the benefit of regular inspections"
[WITH CLAUSE]: "the figures show that the underlying rate of inflation continues to fall"hitherto
Until now or until the point in time under discussion:
"Hitherto part of French West Africa, Benin achieved independence in 1960"
