A hypothesis that I love is that aggregates are “smarter”* than their constituents–be they economic markets, political structures, social networks, ecosystems, fluids or thermodynamic systems. This can be obvious such as the case in science wherein a total system is more than the sum of its parts. However, it’s especially subtle and mysterious when it comes to human affairs (because we, the constituents, are embedded in the system) leading to the following implications:
1) Markets are smarter than people.
2) Social success does not follow directly from personal giftedness.
(*later I’d love to get into a discussion about what intelligence is and how relevant it is to anything really significant, but I digress)
Along these lines we find Thomas Sowell’s excellent article (which RC posted in his article roundup). It’s so good that everyone should see it firsthand, so I’m re-posting the stand alone text.
===== How Smart Are We? © 2010 Thomas Sowell =======
Elites may have more brilliance, but they can’t have as much experience as the people whose decisions they preempt.
Many of the wonderful-sounding ideas that have been tried as government policies have failed disastrously. Because so few people bother to study history, often the same ideas and policies have been tried again, either in another country or in the same country at a later time — and with the same disastrous results.
One of the ideas that has proved to be almost impervious to evidence is the idea that wise and far-sighted people need to take control, and plan economic and social policies so that there will be a rational and just order, rather than chaos resulting from things being allowed to take their own course. It sounds so logical and plausible that demanding hard evidence would seem almost like nit-picking.
In one form or another, this idea goes back at least as far as the French Revolution in the 18th century. As J. A. Schumpeter later wrote of that era, “General well-being ought to have been the consequence,” but “instead we find misery, shame and, at the end of it all, a stream of blood.”
The same could be said of the Bolshevik Revolution and other 20th-century revolutions.
The idea that the wise and knowledgeable few need to take control of the less wise and less knowledgeable many has taken milder forms — and repeatedly with bad results as well.
One of the most easily documented examples has been economic central planning, which was tried in countries around the world at various times during the 20th century, among people of differing races and cultures, and under governments ranging from democracies to dictatorships.
The people who ran central planning agencies usually had more advanced education than the population at large, and probably higher IQs as well.
The central planners also had far more statistics and other facts at their disposal than the average person had. Moreover, there were usually specialized experts such as economists and statisticians on the staffs of the central planners, and outside consultants were available when needed. Finally, the central planners had the power of government behind them to enforce the plans they created.
It is hardly surprising that conservatives, such as Prime Minister Margaret Thatcher in Britain and Pres. Ronald Reagan in the United States, opposed this approach. What is remarkable is that, after a few decades of experience with central planning in some countries, or a few generations in others, even Communists and socialists began to repudiate this approach.
As liberals replaced central planning with more reliance on markets, their countries’ economic-growth rates almost invariably increased, often dramatically. In the largest and most recent examples — China and India — people by the millions have risen above these countries’ official poverty rates, after they freed their economies from many of their suffocating government controls.
China, where famines have repeatedly ravaged the country, now has a problem of obesity — not a good thing in itself, but a big improvement over famines.
This has implications far beyond economics. Think about it: How was it even possible that transferring decisions from elites with more education, intellect, data, and power to ordinary people could lead consistently to demonstrably better results?
One implication is that no one is smart enough to carry out social engineering, whether in the economy or in other areas where the results may not always be so easily quantifiable. We learn, not from our initial brilliance, but from trial-and-error adjustments to events as they unfold.
Science tells us that the human brain reaches its maximum potential in early adulthood. Why then are young adults so seldom capable of doing what people with more years of experience can do?
Because experience trumps brilliance.
Elites may have more brilliance, but those who make decisions for society as a whole cannot possibly have as much experience as the millions of people whose decisions they preempt. The education and intellects of the elites may lead them to have more sweeping presumptions, but that just makes them more dangerous to the freedom, as well as to the well-being, of the people as a whole.
— Thomas Sowell is a senior fellow at the Hoover Institution. © 2010 Creators Syndicate, Inc.
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