While he was cautious about applying his ideas to the field of politics, in 'The Wisdom of Crowds' James Surowiecki discussed a range of factors that point to ways in which microgovernance could be effective in delivering positive policy outcomes.

Surowiecki argued that "under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them. Groups do not need to be dominated by exceptionally intelligent people in order to be smart. Even if most of the people within a group are not especially well-informed or rational, it can still reach a collectively wise decision." [i]

He suggested that a 'smart crowd' requires diversity of opinion, independence, decentralisation and aggregation.

Diversity of opinion means that "each person should have private information, even if its just an eccentric interpretation of the known facts", while independence ensures that "people's opinions are not determined by the opinions of those around them" and therefore prevents 'group-think' and feedback loops. Decentralisation ensures that "people are able to specialise and draw on local knowledge", and aggregation means that "some mechanism exists for turning private judgments into a collective decisions". [ii]

"Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise. An intelligent group, especially when confronted with cognition problems, does not ask its members to modify their positions in order to let the group reach a decision everyone can be happy with. Instead, it figures out how to use mechanisms – like market prices, or intelligent voting systems – to aggregate and produce collective judgments that represent not what any one person in the group thinks but rather, in some sense, what they all think. Paradoxically, the best way for a group to be as smart as possible is for each person in it to think and act as independently as possible." [iii]

So how might microgovernance and a system of individually administered policy frameworks apply these ideas?

The expansion of choice through microparties and a variety of competing policies and frameworks means there is certain to be diversity of opinion. Even if only a small proportion of people are actually involved in such debate, the absolute numbers can still be expected to be large enough to contain a reasonable cross-section of the population (The importance of inclusion is noted later).

Surowiecki argues that diversity helps "because it actually adds perspectives that would otherwise be absent and because it takes away, or at least weakens, some of the destructive characteristics of group decision making" [iv].

If it is the case that "a large group of diverse individuals will come up with better and more robust forecasts and make more intelligent decisions than even the most skilled 'decision maker'" [v] then perhaps their judgments can be trusted at least as much as those of a homogenous caste of professional politicians.

Independence is defined not as isolation but "relative freedom from the influence of others" [vi]. This is important because it stops people making the same errors as each other and thereby distorting the group judgment, and also allows new information to be considered.

An additional factor that can lead to the possible distortion of judgments is the polarisation of groups.

"It means that people are constantly comparing themselves to everyone else with an eye towards maintaining their relative position within the group. In other words, if you start out in the middle and you believe the group has moved, as it were, to the right, you're inclined to shift your position to the right as well, so that relative to everyone else you're standing still. Of course, by moving to the right you're moving the group to the right, making social comparison something of a self-fulfilling prophecy. What's assumed to be real eventually becomes real." [vii]

Surowiecki suggests that while information is generally thought of as 'a good thing', "in certain circumstances, certain kinds of information actually seem to make things worse" [viii]. He cites, for example, the influence of a financial news channel in hyping the market during the stock market bubble of the 1990s.

As a potential solution, he noted experiments which suggest that "the best way to disclose information is without hype or even commentary from people in positions of power" [ix] as guiding the reader or viewer to particular parts of the information can distort decision-making and make the group 'less smart'.

This is an important point as the web tools which will allow people to choose and rank their preferred policy frameworks would also allow users to comment on them, opening a possible avenue for particularly keen or vehement commentors to influence large numbers of other people.

In part, some of this is desirable to the extent that comments might encourage citizens to think about particular pros and cons of a policy framework before supporting it. And a clustering of opinions around particular frameworks will both generate more consensus for those options and simplify the administration by reducing the number of policies being implemented.

But these points aside, the independence of choice is likely to be best protected by the individual citizen's own interests. It is unlikely that anyone would accept a policy if the experience of it was that they became worse off, or if it conflicted with important personal beliefs, simply because of a comment on a website.

Surowiecki suggests that the other two key factors, decentralisation and aggregation, are two sides of the same coin.

He says that decentralisation means that "power does not fully reside in one central location, and many of the important decisions are made by individuals based on their own local and specific knowledge rather than by an omniscient or farseeing planner" [x].

But he notes that "a decentralised system can only produce genuinely intelligent results if there's a means of aggregating the information of everyone in the system" [xi]. Surowiecki adds: "Aggregation – which could be seen as a curious form of centralisation – is therefore paradoxically important to the success of decentralisation." [xii]

A system of microgovernment would comply with these two points, both devolving choice to individuals while at the same time compiling the outcome of all those choices into a set of policies to be implemented by the state.

At the same time, the diversity of policies on offer and being implemented makes use of another of the factors identified by Surowiecki.

"What makes a system successful is its ability to recognise losers and kill them quickly. Or rather, what makes a system successful is its ability to generate lots of losers and then to recognise them as such and kill them off." [xiii]

With more public policy innovation, plus simple choice mechanisms always available (not just at election time) which can be used to reject those which fail to deliver on their promises, a range of policies can be tested and discarded as citizens wish.

While it might seem that his ideas make a strong case for one form or another of direct democracy, as noted at the start of this section, Surowiecki suggests that this is not the case.

His argument rests on the identification of three particular kinds of problems where the 'wisdom of crowds' seems able to generate solutions. These are cognition, co-ordination and co-operation problems.

A cognition problems is one which has a definitive answer, for example 'how many beans are in this jar?'

In co-operation problems, as with co-ordination problems, a good solution requires that people take what everyone else is doing into account.

"But if the mechanism is right, co-ordination problems can be solved even if each individual is single-mindedly pursuing his self-interest – in fact, in the case of price, that's what co-ordination seems to require. To solve co-operation problems – which include things like keeping the sidewalk free of snow, paying taxes and curbing pollution – the members of a group of society need to do more. They need to adopt a broader definition of self-interest than the myopic one that maximising profits in the short term demands. And they need to be able to trust those around them, because in the absence of trust the pursuit of myopic self-interest is the only strategy that makes sense." [xiv]

With these points in mind, Surowiecki says a more deliberative style of democracy which involves citizens more is an "easy target for criticism", adding:

"It seems to rest on an unrealistic conception of people's civic-mindedness. It endows deliberation with almost magical powers. And it has a schoolmarmish, eat-your-spinach air about it. Even if you accept that people are, in fact, sophisticated enough to follow complex political arguments, it's not clear that they have the patience or energy to do so..." [xv]

He also points to criticism that while an individual can decide what is best for themselves with relative ease, it is harder to form a judgment on what is good for society as a whole.

Turning to representative democracy, he suggests that the role of the 'wisdom of crowds' may be limited to monitoring the decisions of their elected politicians.

"In a representative democracy, the real question is: Are Americans likely to pick the candidate who will make the right decision? On those terms, it seems more than plausible that they are. The fact that people don't know how much the United States spends on foreign aid is no sign of their lack of intelligence. It's a sign of their lack of information, which itself is an indication of their lack of interest in political details. But the point of representative democracy is that it allows the same kind of cognitive division of labour that operates in the rest of society. Politicians can specialise and acquire the knowledge they need to make informed decisions, and citizens can monitor them to see how those decisions turn out." [xvi]

But he cautions that reliance on representatives may also have its flaws:

"Elites are just as partisan and no more devoted to the public interest than the average voter. More important, as you shrink the size of a decision-making body, you also shrink the likelihood that the final answer is right. Finally, most political decisions are not simply decisions about how to do something. They are decisions about what to do, decisions that involve values, trade-offs, and choices about what kind of society people should live in. There is no reason to think that experts are better at making those decisions than the average voter." [xvii]

Given the nature of political choices, he suggests, it is impossible to say that the policy of any one party is or is not in the public interest.

He concedes: "There's no reason to believe that crowds would be wise in most situations but suddenly become doltish in the political arena." [xviii] But Surowiecki suggests that if there is no clear answer to the question of which policy or candidate is best then these are not cognition problems "and so we should not expect them to yield themselves to the wisdom of the crowd" [xix].

So it follows from this that direct democracy is not "a way of solving cognition problems or a mechanism for revealing the public interest".

"But it is a way of dealing with (if not solving once and for all) the most fundamental problems of co-operation ad co-ordination: How do we live together? How can living together work to our mutual benefit? Democracy helps people answer those questions because the democratic experience is an experience of not getting everything you want." [xx]

However, it is not entirely clear that no policy choices are cognition problems. The issue of the best way to improve a school's performance may be amenable to such consideration, given that some policies will help and others will not.

There is also a broader point that direct democracy is not just an issue of delivering the best policy outcomes, although the arguments set out in these essays make the case that this would be the result, but also an issue of principle in relation to who ultimately has power and in what form they should exercise it.

The combinations of direct democracy through microgovernment, as set out here, is not just a means to harness the wisdom of crowds, but a mechanism to collect and aggregate them in a way which allows a state to retain its legitimacy.

This remains important because Surowiecki's favoured option of representative democracy is unsustainable for all the reasons set out in Part I.

The mechanisms which allow for individual choices about policy frameworks and the provision of information about them mean that citizens without "the patience or energy" to make constant choices need not do so, while information will be available at any point when they might change their minds.

These kinds of constitutional changes will need to be implemented.

Footnotes:

[i] Surowiecki, J. (2004), 'The Wisdom of Crowds', Abacus, London, p. XIII-XIV.

[ii] Surowiecki, J. (2004), p. 10.

[iii] Surowiecki, J. (2004), p. XIX-XX.

[iv] Surowiecki, J. (2004), p. 29.

[v] Surowiecki, J. (2004), p. 32.

[vi] Surowiecki, J. (2004), p. 41.

[vii] Surowiecki, J. (2004), p. 185.

[viii] Surowiecki, J. (2004), p. 251.

[ix] Surowiecki, J. (2004), p. 255.

[x] Surowiecki, J. (2004), p. 70-71.

[xi] Surowiecki, J. (2004), p. 74.

[xii] Surowiecki, J. (2004), p. 75.

[xiii] Surowiecki, J. (2004), p. 29.

[xiv] Surowiecki, J. (2004), pp. 110-111.

[xv] Surowiecki, J. (2004), p. 261.

[xvi] Surowiecki, J. (2004), p. 266.

[xvii] Surowiecki, J. (2004), p. 267.

[xviii] Surowiecki, J. (2004), p. 270.

[xix] Surowiecki, J. (2004), p. 270.

[xx] Surowiecki, J. (2004), p. 271.