Thursday March 5 | The Wisdom of Crowds

March 4, 2009 at 10:18 am | Posted in Coming Up | 3 Comments

We’ll talk about how a group of individuals working together for a common goal can be much more effective than the sum of the individuals on their own.
James Surowiecki
– Author, The Wisdom of Crowdsand Financial Columnist, The New Yorker

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  1. How ironic is it to be talking about the wisdom of crowds during an economic meltdown caused by irrational group thinking? Crowds clearly swing both ways. The trick is to be able to discern when group judgment is wise and when it is completely delusional.

  2. I believe certain cultural beliefs make it more or less likely that a crowd will decide wisely. I think one reason so many people bought into the housing and stock market bubbles was that Americans in recent years have gotten away from a worldview grounded in reality to one that is more fantasy oriented. The belief that we can get something for nothing has been heavily promoted by the media and over time has had a profound impact on the American public’s thinking.

    I cannot imagine Americans in the fifties ever buying into the idea that massive amounts of personal debt or other risk is a good idea. Their worldview was colored by the experience of the Great Depression. Today too many of us are either ignorant about what happened of foolishly believe it cannot happen again, making it more likely that we will repeat the mistakes of the 20’s and 30’s.

  3. Surowiecki should be appreciated for initiating a discussion about a common sense observation. Life choices don’t resemble “Who Wants to Be a Millionaire.” Someone chooses those questions as an entertainment and publicity strategy, and can calibrate the difficulty, even in the course of the game. His model applies better to the narrowed focus of profit motive as in corporate management. Here, the phenomena of group-think and hierarchical intimidation were discussed on the show. In wider political life one never knows what crisis choice comes next or how it will be framed. The public faces a MacDonald’s menu of choices after vested interest editing. (Medicine in the US also limits the complement of patient choices on several levels.) The two party system presents a great handicap of narrowed choice.

    When the wider idea of market choices is examined we encounter the narrowed choice problem again. (And those without money are not allowed to participate.) The Invisible Hand theory is made a lie when supply (what vendors choose to make and offer) is the primary determinant of demand. People understand that the “externalities” (deteriorating quality of life, a spoiled environment, unrealistic time pressures, engineered scarcity) are not accounted for under our “free market” model, but they have scant recourse under our legal system. In other words the system itself is a falsehood because it focuses only on money values and uses a “success ethic” madness as motivation.

    The Internet is not a beehive but has become primarily a commercial venue marketing again what vendors choose to offer. (ask any newspaper business office)Pop wisdom doesn’t solve the problem of “structural violence” (as presented by Dr. Paul Farmer on yesterday’s show), nor does it address the sustainability of civilization. The book discussed is purely “fun entertainment” and not a comprehensive starting point for reform. There are many other serious and in depth writings that could have been examined as an alternative to this light weight banter. (But I will trust listeners to choose those better substantive sources wisely.Sometimes public radio becomes part of the problem, because of our societal structure.)

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