The Wisdom of Crowds / Implications for Representative Democracy
- Quareness Series (5th "Lecture").
Ladies and Gentlemen,
It's a surprising fact that randomly assembled groups can outperform even the best qualified individuals in assessing the likelihood of certain kinds of outcomes e.g guessing the number of jelly beans in a jar - the average guess of a reasonably large group (of say 30 or more) is likely to be closer to the truth than any personal guess. In other words the judgment of the group may be better than the judgment of all the individuals within it, even though the judgment of the group is solely determined by the judgment of its individual members. No gambler can outperform over time the final market on a horse race (i.e. the starting price) which is shaped by the collective judgment of all the punters, however ignorant or foolish or cavalier. Even though when you bet early you are pitting your judgment against that of the "likely much better informed than the crowd" bookie, the only way to reliably make more money than the bookie can make from you is to bet early (taking a price) before the hoi polloi have had their say. In the long run the crowd always dictates the starting price, with the bookies having to surrender their own judgment. In ignorance there is indeed a kind of strength.
Is it possible that this kind of superiority of crowds to individuals can provide a form of justification for democracy?
There are, broadly speaking, two potentially strong defences for democracy:
(1) The preference based approach which insists that democracy is the best way of finding out
what people want, whether their democratic decisions are right or wrong. The problem with
this though is that there is no simple way to discern the preferences of the majority, with all
such voting procedures subject to inconsistencies and contradictions whenever there are
more than two options to choose from.
(2) The cognitive defence argues that democracies really do provide the likeliest means of
making the right political choices because they allow for the diversity of opinion and freedom
of information on which correct decision making depends. However, the difficulty here is the
widely accepted ignorance and fickleness of the masses because of which the emphasis
tends to be on elite forms of representation and a filtering of public opinion in order to
protect political decision making from the unthinking preferences of the general public.
What though if the ignornce of the masses turns out not to be a weakness? Where decision making devolves onto a small group of self consciously well informed individuals, it is likely that they will lead each other astray if they trust too much in their own judgment and merely reinforce each other's prejudices. For example the very diversity of opinion on the then proposed 2003 military action against Iraq to which the public were exposed in the British media may explain why the public had (as we now know) a better overall idea of what was going on than those in the closed secretive hothouse world of Downing Street. Although no member of the crowd could claim to be as well informed as the experts, the crowd (unlike the experts apparently) nevertheless knew that Saddam was not an immediate threat.
Of course large groups are only good at making decisions under fairly specific conditions. The members must be willing to think for themselves, must be more or less independent of one another, and the group itself should be reasonably decentralized. There must also be some means of aggregating different opinions into a collective judgment. When people start second guessing one another, when they follow one another blindly, or when they start looking for central direction, the crowd turns into a herd and herds are notoriously bad at making decisions.
As Sarowiecki said - If you ask a large enough group of diverse, independent people to make a prediction or estimate a probability, and then average those estimates, the errors each of them makes in coming up with an answer will cancel themselves out. Each person's guess you might say has two components (information and error). Subtract the error and you're left with the information.
And as Rousseau said - There is often a great difference between the will of all (what all individuals want) and the general will. The general will studies only the common interest while the will of all studies private interest, and is indeed no more than the sum of individual desires. But if we take away from these same wills the plusses and minuses which cancel each other out, the balance which remains is the general will. From the deliberations of a people properly informed, and provided its members do not have any communication among themselves, the great number of small differences will always produce a general will, and the decision will always be good.
It is true that crowds are no better than individuals at making moral judgments - such are nothing like guessing the number of jelly beans in a jar. Neither do crowds perform well when the question is not a straightforward cognitive one. And equally crowds are not well placed to judge questions that depend on having detailed knowledge of the particular circumstances of an individual, which by definition can only be known to those with some first hand acquaintance e.g. a few people might know a lot but a lot of people would know nothing at all and rumour and bias would be likely to prevail.
It would seem that many of the important questions now facing society are general problems of cognition - we need to know what we are up against in order to know how to best allocate our resources. Alternative ways for a nation to look into what could/should happen might be (a) to ask the experts and follow their advice, (b) to see the likely disagreement of experts as a reason for asking the politicians to exercise their judgment, or (c) to ask a large group of people that included not just experts and politicians but also members of the public, to give it their best guess. This latter approach would have the advantages of being open to all, decentralized, leaderless, and not having to suck up to anybody. It would pool all available information and intuition, regardless of the source, and turn it into some specific predictions. These predictions might not be right, but the inherent wisdom of crowds would suggest they are less likely to be wrong than the best estimate of any named individual.
At this stage of their evolution a real challenge for our democracies is to find ways of combining the need for decisive and timely political action with the kinds of impersonal safeguards that prevent such action from introducing permanent distortions. One way is to ensure that political assessments of risk in individual cases are subject to some meaningful form of judicial review. Another is to ensure that the advice received by government ministers from their appointed experts is debated as widely as possible by politicians from outside the government, as even the most expert advice can be a source of bias if filtered exclusively through the personal judgment of individuals. And a further way is to make sure that politicians do not ignore the instincts of the public on questions of risk, so long as those instincts have themselves been tested for bias. The reliability of public opinion in providing a guide depends on the guarantees that are generated by having a free press protected from monopoly influence and offering as wide as possible a range of political views drawn from as diverse as possible a set of information sources. This in turn depends on there being an inquisitive public driving the market for news. Alas developments and performance in our political and media sectors over recent decades have fallen well short in these respects.
Life on our planet constantly presents us with a series of challenges and I suggest to y'all that as we whizz along however imperceptively as players in the great drama of evolving, we are hard wired as a species to "learn" the future. In this spirit what may now be urgently needed are states that in essence allow for decisive political action on the part of their temporary custodian leadership, combined with judicial oversight of particular decisions, robust and diverse legislatures to debate the alternatives (and able, when necessary, to insist on applicable time limits for legislation), and a well informed and politically active public to pass its own judgment. The constitutional arrangements would then have to be in place to ensure that none of these tests of political decision making is allowed excessive influence over the way governments conduct their business i.e. to firmly foster and protect these recognisable devices of modern constitutional politics.
Sean.
Dean of Quareness.
March 2011.