Re: Collective wisdom

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

I wrote: 
>> My feeling is that [Condorcet] was saying that a jury of 12 would be more
accurate in its processing of the facts they were given  --  to make a
_binary decision_ (guilty/not guilty) -- than would be a 
 jury of 1 or 6, assuming that one of the two verdicts is actually valid. 
It's like saying "two heads are better than one, while twelve are better than
two."  Obviously, the "facts" they were given will have been limited
and biased by the attorneys and the judge, while their  interpretation
would be limited by any shared ideology or shared social position that
limited and shaped their world-views. Further, discussions about
complex theological beliefs such as the Rapture or neoclassical
economics seem to go against the assumption of binary decision-making.
Strictly speaking, the theorem assumes that the jurors vote 
independently, rather than discussing matters and voting collectively
(which is the way juries I've been on have worked).<<

Ted W writes: 
> Group dynamics are ignored.  Given a certain kind of individual
> psychology, for instance, obviously false beliefs - e.g belief in the
> possibility of Rapture - can come to be held with greater certainty the
> greater the number of individuals who share them.  Projective
> idenfication generated phantasies about the motives of excluded others
> can be reinforced by group psychology  (as in paranoid conspiracist
> theories).

right. Condorcet (like modern economists) ignored social psychology along with endogenous tastes and world views. However in his defense, it is rare to see anything in economics that actually _defends_ democracy. Economists typically _hate_ democracy, except for the attenuated and anemic kind of democracy that prevails in the US and similar countries. 

> There is an account of intersubjective decision making consistent with
> the conclusion that the realism of judgments will increase with the
> number participating in the judgment, but it requires the idea of the
> individuals as "transcendental subjects," i.e. as subjects able to
> perceive truly.  Each subject is limited in perspective by their
> location in events (their "perspective") so by increasing the 
> number of
> subjects who communicate about their perception "enlarged thinking,"
> i.e. thinking less biased by the limitations of individual 
> perspective,
> is achieved.  This is Husserl's idea of transcendental
> intersubjectivity.  The word "transcendental" in this context 
> means the
> capacity to perceive truly so it makes assumptions about the potential
> character of human experience (it elaborates experience as experience
> of internal relations, for example).

I don't think that life under capitalism typically allows such kinds of thinking to play a big role. We live in a fetishized and alienated society. 

<ellipsis>

I wrote: 
> > the way I learned the Arrow/Debreu stuff in grad school (UC-Berkeley,
then home of Debreu) was that it showed the assumptions one had to
make for competitive equilibrium to exist, and that since the
assumptions weren't realistic, the Arrow/Debreu conclusions didn't
apply. Any deductive theorem cuts both ways.<<

Ted: 
> Weintraub's account both of the beliefs held by economists with
> certainty and of the generation of this certainty by the "information"
> 'The theorem proves that ...' doesn't apply to your grad school days at
> UC-Berkeley then.

I think that Weintraub's account applies better to grad. schools that are "lower on the food chain" and more Chicagoesque in their orientation. UC-B focused on a more scientific approach than the less-prestigious and more-Chicago-type places. Of course, the most prestigious types (Debreu, etc.) tended to equate "scientific thinking" with mathematics & deductive reasoning. But even there, it's was clear that if the assumptions of a theorem were wrong, the theorem itself was irrelevant. Friedman's "positive economics" was an object of derision (at least in the mid-1970s). 

>  But it wasn't the "utility function" approach
> itself which was called in question, was it?

Utility-maximization was seen as a simplifying assumption, not as an eternal truth. However, no alternative was presented. This was different from the case of the "theory of the firm," in which the "behavioral theory" was posed as an alternative to the profit maximization assumption. It should have been the other way around: social-psychological theories of consumers should have been presented, while the behavioral theory of the firm (satisfying, etc.) is less that satisfying and deserves less attention. In other words, I think that profit-max is a better description of firms than utility-max is as a description of people. 

> What grounds are usually offered to justify restricting the discipline
> to this starting point?  Lack of realism in the assumptions said by
> some not to matter, isn't it?  

There's no real justification. The util-max "theory" is just an assumption, one that reflects the atomistic world-view of liberalism. The fact that most of economics (back then, at least) concerned the behavior of atomistic behavior of consumers is one justification, since atomistic mentality is encouraged by anonymous markets and voting processes. Whereas this assumption doesn't work with juries, where social-psychological elements are crucial, it's an okay first approximation for markets and atomized voting. Again, that's not much of a justification. 

It's Milton Friedman who says that the lack of realism in the assumptions doesn't matter. Most at UC-B rejected that. 

Despite my rejection of Friedman, I'd say that there's nothing wrong with making some simplifying assumptions (just as there's nothing wrong with abstraction) as long as one keeps the unrealistic nature of the assumptions (and the difference between abstract visions and concrete reality) in view. The problem with economists is typically that they forget that the assumption was simplifying and fall in love with their abstractions, especially when they allow the "cranking out" of pleasing results. (Intellectuals often tend to fall in love with abstractions and most economists are sub-intellectuals.) 

<ellipsis>

Jim Devine