This should impress everyone, and surprise no one:
The morning I met Elaine Rich, she was sitting at the kitchen table of her small town home in suburban Maryland trying to estimate refugee flows in Syria.
It wasn’t the only question she was considering; there were others:
Will North Korea launch a new multistage missile before May 10, 2014?
Will Russian armed forces enter Kharkiv, Ukraine, by May 10? Rich’s answers to these questions would eventually be evaluated by the intelligence community, but she didn’t feel much pressure because this wasn’t her full-time gig.
“I’m just a pharmacist,” she said. “Nobody cares about me, nobody knows my name, I don’t have a professional reputation at stake. And it’s this anonymity which actually gives me freedom to make true forecasts.”
Rich does make true forecasts; she is curiously good at predicting future world events.
For the past three years, Rich and 3,000 other average people have been quietly making probability estimates about everything from Venezuelan gas subsidies to North Korean politics as part of the Good Judgment Project, an experiment put together by three well-known psychologists and some people inside the intelligence community.
According to one report, the predictions made by the Good Judgment Project are often better even than intelligence analysts with access to classified information, and many of the people involved in the project have been astonished by its success at making accurate predictions.
Gosh, if I didn’t know better, I would say that this means that having lots of people use their individual and collective judgment to analyze issues, drive trends, shape consensus and form opinions in a natural, orderly way, free of outside artificial interference, might actually lead to amazingly good outcomes. And amazingly good outcomes might be found beyond the sphere of intelligence gathering and analysis. They might even be found in the realm of economics, where allowing the wisdom of crowds to express itself might lead to the creation of something that we might call a “free market.”
Such a “free market” would put the wisdom of crowds to good use to in, say, determining prices for commodities by figuring out what the demand for that particular commodity might be, and by giving providers of certain commodities an incentive to cater to the demands of this “free market” by providing superior commodities at lower prices–by which method the providers in question might be able to make a financial profit that will help them and their workers (and help them hire more workers, to boot). As such, this “free market” would be able to expand consumer choice, lower prices in general, increase competition, and provide incentives for superior commodities of all kinds.
What an interesting idea. I wonder if we might put it into practice around the world, and not just in certain locales, where the idea may only be partially or imperfectly implemented.