The Wisdom of Crowds and Democracy

March 7, 2008

Democracy is founded on giving people the right to self-determination and the illusion that this is a good method by which to extract collective intelligence.

There is not the problem of the mob but quite the opposite: it is the massed individual stupidity which brings down the democratic endeavor.

Let us look at an example: There is a large jar filled with jelly beans—such as may be found at fairs and such—and people attempt to guess the correct number as closely as possible. What has been found is that people are usually wildly off the mark, and more often than not they follow a bias in one direction. However, the average of guesses is amazingly close to the real number.

Imagine following a standard democratic prescription, however, and merely picking the number most guessers chose (the mode) or even the middle value (the median): you would not get a good result at all! (Update: Robin Hanson (see below) says the median often gives results even better than the average, so… that would also work! :>)

Why should we then use a method this wretched to solve a problem not far off, namely that of electing our leaders?