Wednesday, 9 March 2011

Uncertainty and Doubt

Every political decision, every prediction and plan, involves uncertainty and doubt. It may be impossible to fully understand the probabilities and risks involved, and each provision is also subject to the the law of unintended consequences. We would probably all prefer to trust in a gifted seer or oracle, or own a crystal ball, but unfortunately that's not the way the world works and we have ample evidence that leaders are sometimes right and sometimes wrong. But can crowds do better?
The stock market is an example of a crowd of individuals that try to predict the future. The market sets the price for a stock based on all sorts of analytical information, partial understandings and instincts but the markets are beset by irrational exuberance and paranoia, causing wild swings in valuations: bulls and bears, boom and bust. Is the democratic crowd any different?
Maybe it isn't that democracies make better decisions than dictators or appointed leaders. For example, in recent years the dictators in China have presided over the greatest increase in living standards for the greatest number of people, any time in human history. Maybe it's societies ability to change, evolve and correct its mistakes that's more important.

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