The Wisdom of Crowds, Part 1

Here is the first part of a term paper for my Organizational Theory class:

I encourage you to read this while holding a pencil. Why the pencil? It stems from Leonard Read’s 1958 essay “I, Pencil” in which the author claims that the pencil which you now hold in your hand is nothing short of miraculous:

“I, Pencil, simple though I appear to be…have a profound lesson to teach.

Simple? Yet, not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn't it?

Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others.…There isn't a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how.”

This illustration was made famous by Milton Friedman who used the essay in Free to Choose, his paean to the unifying power of free markets. The same sentiment is echoed in the economist’s question “Who feeds Paris?” and more recently in Thomas Thwaites’ disastrous attempt to build a toaster from scratch. The central idea: No one of us is as smart as all of us.

This idea runs counter to the current trends in scientific inquiry, where experts are looked to as the purveyors of all knowledge. One example of this appeal to expertise is the World Question. At the beginning of each year, The Edge Foundation embarks on its mission to pose a question to the world's smartest people. Or as they put it, "To arrive at the edge of the world's knowledge, seek out the most complex and sophisticated minds, put them in a room together and have them ask each other the questions they are asking themselves."

This year's question: "What scientific concept would improve everybody's cognitive toolkit?" The responses are fascinating--Antifragility, Pragmamorphism, Externalities, Cumulative Error, Pareto Distributions-- if you ever wanted to drink from the science firehose, this is it. And yet, even in this most expert-based of all venues, there is a sense of collectivism.

Take, for example, the entry submitted by Matt Ridley, author and founding chairman of the International Centre for Life, entitled “Collective Intelligence”:

"Brilliant people, be they anthropologists, psychologists or economists, assume that brilliance is the key to human achievement. They vote for the cleverest people to run governments, they ask the cleverest experts to devise plans for the economy, they credit the cleverest scientists with discoveries, and they speculate on how human intelligence evolved in the first place.

They are all barking up the wrong tree. The key to human achievement is not individual intelligence at all….Human achievement is entirely a networking phenomenon. It is by putting brains together through the division of labor — through trade and specialisation — that human society stumbled upon a way to raise the living standards, carrying capacity, technological virtuosity and knowledge base of the species." 

The term ‘collective intelligence’ may bring to mind a multitude of images culled from science-fiction films and novels—from H.G. Wells’ World Brain to Star Trek’s Borg (“You will be assimilated. Resistance is futile.”)—as well as from works of philosophy—Hobbes’ Leviathan and Gregory Stock’s Metaman. In today’s market economy, however, this is how work is performed: collectively, but distributed. We are personally removed from the production of practically everything we consume each day, usually by dozens if not hundreds of steps.

When I was teaching a high school class in American history, I tried to drive this point home to my students through the following exercise: I had them record everything that they had used or consumed throughout the day, and then identify anything that they (or their families) had produced themselves. The list was always short: vegetables from the family garden, eggs from backyard chickens, maybe a homemade scarf. To further emphasize how far removed production is from consumption today, I offered a substantial prize to anyone who was currently wearing any article of clothing tagged “Made in America.” In my four years of teaching I never had to pay up.

I’m afraid that the marvel of this worldwide dispersion of effort is lost on us through its sheer normalcy. Quoting G.K. Chesterson, Read’s pencil claims, “We are perishing for want of wonder, not for want of wonders.” I am, however, willing to remit: it may well be that the efforts of thousands of people, no matter how distributed, coming together to create something as ordinary as pencil is not as impressive as I believe. After all, the process is as we might expect: higher-order entities creating something in a lower-order. But what about when it happens the other way, when lower-order entities coalesce to create something higher than themselves?