Thursday, October 27, 2005
The Wisdom (and Stupidity) of Crowds
If James Surowiecki's "Wisdom of Crowds" hypothesis is correct, the market would never have sudden reversals, we'd always elect the best public officials, and the most long-term-successful politicians would always follow the polls. Right?
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Comments:
Not all crowds are created equal. The author clearly defines "the wisdom of crowds" as the average of the decisions of independent individuals.
In markets and politics some individuals have a much greater then average influence on the outcome. Very few of the decisions are made by independent individuals, mostly because of how the system is organized.
The "laws of power" are very clear: Every form of organisation or goverment tends to develop (given in enough time) into a kind of aristocracy.
Any kind of democracy is inherently instable and the effort to sustain will increase with time. The more organized the democracy is, the harder it will be to sustain. In time even a small period of war or scarcity of fundamental resources will be enough to turn any old democracy in to an anarchy or an aristocracy.
Given that choice, most people would choose aristocracy above anarchy.
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In markets and politics some individuals have a much greater then average influence on the outcome. Very few of the decisions are made by independent individuals, mostly because of how the system is organized.
The "laws of power" are very clear: Every form of organisation or goverment tends to develop (given in enough time) into a kind of aristocracy.
Any kind of democracy is inherently instable and the effort to sustain will increase with time. The more organized the democracy is, the harder it will be to sustain. In time even a small period of war or scarcity of fundamental resources will be enough to turn any old democracy in to an anarchy or an aristocracy.
Given that choice, most people would choose aristocracy above anarchy.
# posted by 
: 12/31/2005 4:27 AM
: 12/31/2005 4:27 AM
