Re: Collective wisdom

["Devine, James" <jdevine@xxxxxxx>]

>In his classical contribution Condorcet (1785) described a committee as a mechanism that eÂciently aggregates decentralized information. In his famous jury theorem he argues that (i) increasing the number of informed committee members raises the probability that an appropriate decision is made and (ii) the probability of making the appropriate decision will converge to one as the number of committee members goes to infnity.< (from http://www.ecb.int/pub/wp/ecbwp256.pdf.) 

Despite this, my feeling is that the group is always right, except when it isn't. Just as the individual is always right, except when he or she isn't. But for any collective decision, only the democratic body of the collective has any legitimacy.

(One problem with this theorem is that the larger the group, the harder it is to come to a decision.) 

Jim D. 

	-----Original Message----- 
	From: Louis Proyect [mailto:lnp3@xxxxxxxxx] 
	Sent: Sun 5/23/2004 9:44 AM 
	To: PEN-L@xxxxxxxxxxxxxxxx 
	Cc: 
	Subject: [PEN-L] Collective wisdom
	
	

	NY Times Book Review, May 22, 2004
	'The Wisdom of Crowds': Problem Solving Is a Team Sport
	By SCOTT McLEMEE
	
	THE WISDOM OF CROWDS
	Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes
	Business, Economics, Societies, and Nations.
	By James Surowiecki.
	296 pp. New York: Doubleday. $24.95.
	
	Generations of advertisers and business gurus have banked on the
	premises of Sigmund Freud's ''Group Psychology and the Analysis of the
	Ego,'' a slender volume with a big argument: when people assemble en
	masse, all the raw material making up the individual psyche (libido,
	aggression, whatever) is also present, but on a gigantic scale. And the
	power for rational thought is thereby dwarfed. The crowd is considerably
	dumber than its smartest members. This explains, for example, Britney
	Spears, irrational economic exuberance and the occasional episode of
	public yearning for an authority figure to do the superego's job,
	whether by seizing state power (the fascist dictator model) or by going
	on television to say ''You're fired'' (the reality TV version).
	
	Freud merely translated the Victorian era's darkest suspicions about
	democracy into psychoanalytic jargon; the profound irrationality of
	''the mass'' was already a clichà in 1921. In ''The Wisdom of Crowds,''
	James Surowiecki, who writes a column called The Financial Page for The
	New Yorker, challenges that received wisdom. He marshals evidence from
	the social sciences indicating that people in large groups are, in
	effect, better informed and more rational than any single member might
	be. The author has a knack for translating the most algebraic of
	research papers into bright expository prose -- though the swarm of
	anecdotes at times makes it difficult to follow the progress of his
	argument.
	
	His thesis is that society is able to get along from day to day because
	people exercise a kind of rationality as a group that allows them (or
	us, rather) to handle three kinds of problems. Surowiecki defines the
	first as cognition problems: questions that have ''definitive'' or
	factual solutions. If you ask a group of people to estimate how many
	jelly beans are in a jar, for example, the average of their answers is
	likely to be much more accurate than any given individual's guess. This
	seems counterintuitive, but there is a considerable body of experimental
	evidence to support it. Aside from tests involving college sophomores,
	there are data from ''Who Wants To Be a Millionaire?'' -- where, as
	Surowiecki puts it, ''random crowds of people with nothing better to do
	on a weekday afternoon than sit in a TV studio picked the right answer
	91 percent of the time.''
	
	Slightly less eerie are the accounts of how groups solve questions of
	coordination -- for example, how pedestrians on a busy sidewalk account
	for one another's movements well enough to avoid collisions (most of the
	time, anyway).
	
	By the time the author comes to the topic of cooperation, we are not
	just in the middle of the book but at its core. There is a certain
	notion of rationality that starts from the assumption that each of us
	is, in essence, a monad designed to maximize profit and pleasure. Our
	interactions with one another are, by that light, a means of
	self-aggrandizement. If you do not kill me for my wallet at the first
	opportunity, or vice versa, that is because we are afraid of certain
	consequences we predict might be bad, like being arrested.
	
	But research consulted by Surowiecki indicates that we do in fact have
	prosocial tendencies. Given the chance to cheat, lie and freeload, fewer
	people do so than one might expect. (I, for one, am relieved.)
	
	A socialist might draw some optimistic conclusions from all of this. But
	Surowiecki's framework is decidedly capitalist. The market is a
	mechanism for translating ''the wisdom of crowds'' into optimal results,
	though things would probably improve if business leaders were a little
	less prone to thinking that, as Margaret Thatcher once put it, ''There
	is no such thing as society.'' Whether Surowiecki's book will prevent
	another Enron is very much to be doubted, but his worldview is at least
	less cynical than Victorian notions that humanity, as a group, is a dumb
	herd.
	
	
	Scott McLemee is a senior writer at The Chronicle of Higher Education.
	
	
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