Heaths near Nijverdal

Our invisible friend

nivtric2 Comments

Market economy

Market economies have an invisible friend called the invisible hand. In market economies, goods are distributed without the need for a planning agency. According to Adam Smith, it is as if an invisible hand makes this miracle happen. His critics, for instance, Karl Marx, did not believe in invisible friends. Not surprisingly, Marx also did not believe in God. Smith claimed that if everyone pursues his own interest, the interest of society is often best served. The followers of Marx felt that the state should plan the production and distribution of goods and services.

I’m the invisible man
Incredible how you can
See right through me

– Queen, The Invisible Man

The following story demonstrates how the invisible hand does its magic. Whether or not it is true does not matter. The story goes that the mayor of Moscow once visited London in the 1980s. Back then, Russia did not have a market economy. The mayor received a tour around the city and noticed that no one queued up for bread as everyone did in Moscow. There was an ample supply of bread at affordable prices. Somehow bread was produced in the right quantities for the preferred tastes and supplied at the right places.

The mayor was amazed about this feat, so he said to his hosts, “Back in Moscow our finest minds work day and night on the bread supply and yet there are long queues everywhere. Who is in charge of the supply of bread in London? I want to meet him!” Of course, no one was in charge. That’s the secret of the market economy. Every baker decided how much he was planning to make and sell and at what price. A few years later, Russia switched to a market economy.

The individual decisions of bakers and the businesses in the supply chain, for instance, farmers and flour mills, make this miracle happen. They all decide for themselves. If a baker could sell more than he produced, he would miss out on profits. The same is true when he has to throw away bread. And some people are willing to pay more if the bread tastes better. Hence, each baker tries to make the right amount of bread to the tastes people desire. It is in their best interest.

In Russia, the state planned how much of each item a corporation should produce. Corporations could not decide on prices. They received compensation for their costs but could not make a profit. Employees received a fixed salary. Corporations that produced more or better products and their employees did not benefit. Corporations also could not go bankrupt when they did a terrible job. That resulted in poor-quality products, a shortage of nearly everything and even outright famine from time to time.

It doesn’t always work out well

This miracle has enchanted quite a few people. They believe that everything will turn out fine if only markets can do their job. But there are many instances where a market economy doesn’t produce the best outcome for society. Economists call them market failures. One can think of the following situations:

  • We have more desires than our planet can support. A market economy may fulfil those desires at the expense of our future.
  • Many people cannot make a living in the market economy, for instance, because they lack the skills or have little bargaining power.
  • Corporations use lobbyists and bribe politicians to pass legislation that favours them.
  • A government may be a more efficient producer of products that do not benefit from competition, for instance, roads and the power grid.
  • Corporations may abuse their power and charge higher prices, most notably if they have no competitors.
  • Products can cause harm to people or the environment, but producers may not pay these costs themselves. For example, cigarettes cause health costs.

In most countries, governments interfere with the economy to deal with these market failures. These are situations where pursuing personal interests does not bring the best outcome for society. In many democratic countries, public expenses are about 50% of national income. People in these countries probably believe that a market economy does not always work best. In some areas, markets produce extremely poor outcomes, for instance health care.

An example can demonstrate why. People in the United States live as long as people in Cuba.1 Cuba is poor and does not have a market economy. The United States spends more on health care than any other country in the world. Every possible treatment is available in the United States. Still, in more than 40 countries, people live longer than in the United States.1 Cuba does not spend a lot on health care, only 10% of what the United States spends per person. Healthcare in Cuba appears efficient compared to healthcare in the United States. How can this be?

The available treatments in Cuba are free for everyone. In the United States, you may not receive treatment when you cannot afford it because the United States has a market economy. There may be other causes, for example, differences in diets in Cuba and the United States. There is no fast food in Cuba because Cuba has no market economy. Life in Cuba may be miserable, but healthcare is one of the few things Cuba has organised well.

Successful societies have market economies and governments that organise things that the market fails to do. And a market economy still needs a government to set the rules and enforce them. Governments of successful societies aim at making the market economy work better where it is beneficial for society and constraining it where it does more harm than good.

Capital

Market economy and capitalism are so closely related that many people believe them to be the same. Capitalism is about capital. Capital consists of the buildings and the machines corporations own, but also the knowledge of how to make products and how to bring them to the market. Knowledge of how to make a film entertaining might be capital for a film company. Networks of customers and suppliers can be capital too if they contribute to the success of a business. The same applies to contracts and brands. For instance, the brand Coca-Cola has a lot of value because people are willing to pay more for cola when the logo of Coca-Cola is printed on the bottle.

Building capital can be costly but in a market economy the value of capital doesn’t depend on the cost to build it but on the future income it is expected to produce. This can lead to peculiar situations. When investors have no faith in the future of a corporation because it is expected to make losses, the buildings and the machines on their own may be worth more than the corporation as a whole as those buildings and machines could be used by other corporations for more profitable purposes.

In most cases, more capital means more wealth because capital produces the things people need or desire. Corporations tend to be more profitable if they fulfil those needs and desires better. Therefore, the value of capital in a market economy often depends on how well it can fulfil the desires of consumers. Investors are willing to invest in corporations that fulfil those needs and desires because they expect to make money by doing so.

It is sometimes argued that when investors are free to invest in the corporations of their choosing, the invisible hand channels investment capital to the most useful corporations because they are the most profitable. That’s why the value of corporations is important in a market economy. Businesses ‘create value’ for investors by making consumers happy. Still, the value of a corporation might not reflect the benefits for society as a whole. For instance, if the profitability of a corporation comes from exploiting people or harming life on the planet, a high value could be a bad sign.

And capital can be useful without being profitable, for instance in the public sector. A hospital in the public sector may have no market value because it doesn’t make a profit but it can be useful nonetheless. Capital in the public sector might even be more valuable than in a market economy. For instance, making hospitals private enterprises for profit might not benefit society as a whole. Hospital care may not improve from the competition as it is often best to have one hospital serving a particular area. And patients might receive unnecessary treatments when hospitals can make a profit. Healthcare in the United States may create a lot of value for investors but it doesn’t always benefit the patients.

As there are basically two types of people, capitalists who save and invest and ordinary people who borrow and spend, it is hardly surprising that capitalists tend to be wealthier than ordinary people. Capitalism can create wealth because it is the capitalists who finance the investments in the corporations that make the items ordinary people enjoy, but this wealth is often unevenly distributed. From a moral perspective, it is a problem that poverty still exists when there could be enough for everyone. So the question that still remains is how to make the economy work better for the benefit of all?

Featured image: Our invisible friend photographed in the moorlands near Nijverdal. Jürgen Eissink (2018). Wikimedia Commons. Public Domain.

1. Life expectancy per country 2017. World Population Review. [link]

The newspaper Pravda dated 29 May 1919

Strife

nivtricLeave a comment

My sister Mary Anne was an ordinary kid with a social life, friends and later boyfriends, and social skills. And I was a peculiar child, a loner and a bit strange, and having a social disadvantage, which is probably Asperger’s Syndrome. My sister didn’t take life as seriously as I did. She was more pragmatic and had a more flexible arrangement with the truth. Perhaps, not surprisingly, my sister later became a fashion saleswoman and was good at her job. In sales, you shouldn’t care about the truth. ‘That looks good on you.’ That’s a lie! Nothing looks good on me. I am far too sexy for any clothing. And so, I was upset when it came out that Saint Nicholas (Santa Claus) didn’t exist. Everyone had lied to me for years. It was already hard to fathom that people could lie occasionally.

Mary Anne was two years younger and promised she would still believe in Saint Nicholas if he brought her presents. I was rigid when it came down to the truth. Most people lie if that suits them. I was different. My sister was amazed at how I kept strictly to the facts, even when it harmed my interests. ‘ An Enasniël never lies,’ she said more than once. These were her exact words. She added an article to my name and said, ‘An Enasniël.’ Perhaps that was to stress that I was a specimen of a highly peculiar species, of which she only knew one. But I wasn’t perfectly honest. I still remember an instance when I cheated. I once arranged a few letters before the beginning of a Scrabble game to pick them up, make a word, and get extra points.

Mary Anne had a way of nagging me. It began early. She followed me wherever I went as soon as she could walk and was set free from the kids’ box. Probably, she didn’t intend to annoy me at first, but when she suddenly became my constant companion, it felt intrusive. Perhaps she craved attention, and my frustrated reactions fulfilled that desire. And so, she went on and on, and Mary Anne became adept at soliciting vexed responses. It went from bad to worse and escalated into protracted strife.

Whenever there was a conflict, my mother blamed me. I was older and should be wiser. That changed once she caught on to how these conflicts started and escalated, as Mary Anne usually was the culprit. She never showed remorse and pulled out all the stops. She could become angry if she didn’t get her way. So, she did get her way. On one occasion, Mary Anne smashed a chair at me so fiercely that its leg broke on my shoulder. Was it blind anger, or did she aim for my head? That is unclear. Perhaps she had aimed for my head and not thought of the consequences. My mother later said that she had terrorised the family. She usually got what she wanted in this way. And so, home was a war zone as well. I was always plotting and scheming to get back at her.

My cousin Rob and I started a new club, The Company, a spy club. Rob’s brothers joined the club. We could get our hands on a set of walkie-talkies, and we hid in the alleys in Haaksbergen, talking to each other over the radio. We thought of ourselves as spies, so Rob and I wrote each other letters in code. My tree garden in a fallow backyard behind the shed became our headquarters. I built a hut, made a lookout post so we could survey the area, and erected a flagpole to raise our flag.

Mary Anne and her friends soon invaded this land. And they made a hut of their own. It took a long time to get them out. I had to be careful because she could become enraged, take up a shovel or a hoe and come after me, and then you had to run for your life. I wasn’t violent or mean. These silly wars weren’t worth any injuries. Mary Anne’s best friend, Dorothee, was once indignant after I had shot a cork at her legs using a sawn-off bicycle pump on this land and hit her trousers with it. I split up the tree garden, introduced a border, and retook the land after my sister lost interest in her stake.

And I found a way to get back at her. Rob and I started a funny newspaper, The Big Company Newspaper. It had a lot of fiction in which we named Mary Anne and her friends Dorothee and Ellen as ‘The Morons’. We didn’t use their names but called them Moron M, Moron D, and Moron E. We were constantly ‘fighting’ The Morons. The war against morons was our primary mission. We fought hard, for instance, by reading my sister’s secret diary and writing about it in the newspaper. Later, after some people had complained about the word morons, which wasn’t nice indeed, we renamed The Morons into The Wokkels after a particular potato crisp and named them Wokkel M, Wokkel D, and Wokkel E, respectively. Wokkel sounds like mokkel, the Dutch for bitch, and you only had to turn the W upside down to get at that word.

Occasionally, the newspaper reporting had a remote relationship to facts. I made up most of the stories while Rob took care of the drawings. Mary Anne practised horse riding and played hockey. These were elite sports for the upper class. Even though we had different political opinions, as Rob was left-wing while I was right-wing, we were both anti-posh and anti-elite. In the rag, Mary Anne spoke with a posh accent, or as the Dutch would say, with a hot potato in her mouth. To stress the nature of our newspaper, the fictitious Bureau van Lulkoek (Bullshit Agency) issued it. It was fake news, so we labelled it as fake news. People take the written word seriously, whether it is a tweet from Paris Hilton or the Bible. You can never be careful enough. You can’t have people take nonsense seriously.

We were thirteen when we began and eighteen when we stopped. The rag started childish and rude, but over time, it grew funnier, and my sister became, not entirely a side-show, but definitely of lesser importance. The paper began to feature fantasy stories about us fighting organised crime and other groups in the neighbourhood. We outwitted everyone, including the CIA, the KGB, and the mafia. We always came out victorious because of odd coincidences and the stupidity of our opponents, who usually attacked each other, so we didn’t have to do anything to win.

One of the stories we added was an account of an expedition led by Dr Livingstone, the grandson of the famous Dr Livingstone, to the so-called mountains near Nijverdal, where cannibals hid in the forests. They were German soldiers who had stayed there since World War II and were unaware that the war had ended. Not all expedition members returned whole. We also mocked advertisements. The newspaper featured Roweco, a corporation selling light bulbs and robots. And there was Geopondex, a producer of automatic spear throwers. Its advertising slogan was, ‘Otiosity is our quality,’ a catchy phrase. We sold those newspapers to pay for the materials. These were the early 1980s, so we didn’t use computers. We used a typewriter, paper, and special rub-on fonts to create newspaper headlines.

To give you a glimpse of the kind of buffoonery the funny newspaper was about, I cite one article in its entirety. To understand the story, you need to know that at age fifteen, I invented a new game, chessers, a combination of checkers and chess, but I was the only person playing it. The tale itself is entirely fictional, so it didn’t happen. So, here it goes,

The world championship chessers, which is a merger of chess and checkers, took place in the sports hall of Nijverdal. It started on Saturday, 11 May, and continued on Monday, 13 May. The current world champion, Mr. E Drogoel, had to compete against a Roweco chessers robot due to a lack of human opponents. The main prize consisted of a cash prize of f 0.05 (€ 0.02) and a challenge cup made of pure tin with a height of two millimetres. The fight was rather slow and tedious. Half of the audience, Mr. Drogoel’s father and mother, left the hall. After six moves, the robot gave up because its batteries were empty. Mr. E Drogoel then received the trophy from the director, Mr. E Drogoel, of the Dutch Chessers Promotion Committee (DCPC). After that, the public relations officer of DCPC, Mr. E Drogoel, gave a speech about the fascinating aspects of chessers. After this mediocre performance, the remaining two-person audience, namely the journalist from Nieuwsblad de Grootcompagnie and the reporter from Radio Huunt (an imaginary local radio station), started throwing rotten eggs, tomatoes, beer bottles and car parts.

My mother criticised my childish behaviour. Once, I disturbed Mary Anne’s birthday party with a smoking device. I also had hidden a microphone in her room. After all, we had a spy club. We hardly ever made recordings, and the ones we did were so poor that I couldn’t make out what she and her friends were saying. However, being able to make a recording gave me a sense of power. The newspaper reported what they supposedly said during their secret meetings in that room. I also placed devices in my room that would throw Lego blocks at her if my sister entered to plunder my piggy bank. Still, my sister and I often played together. We played games like Who Is It, chess and Stratego. Mary Anne became the chess champion at her school. She later said it was because we played so much chess together. Our mutual understanding improved once we became adults.

It still doesn’t explain the situation well enough. Copies of the newspaper reveal a great deal of hatred towards my sister. It would be better to clarify this further by referencing a few specific events. Instead of listing incidents, it might be better to mention a few similar events suggesting a pattern. When my sister went to kindergarten, we bicycled to school together because her school was next to mine, allowing my mother to stay home. Mary Anne once ran into a flat tyre on our way to school. I set her on the back seat of my bicycle and took her to school. I took her bicycle with me, expecting to bring her back home this way. When school finished, my bicycle and my sister were gone. Her bicycle with the flat tyre was still there. I had to walk home, a stretch of 1,5 kilometres.

You might think it was just an incident. After all, Mary Anne was five or six. Perhaps she didn’t know better. That was what my parents thought, so they didn’t punish her. I had received punishments for lesser offences, like a severe spanking for singing in bed around five AM. And the affair with the flat tyre was not a mere incident. I already knew that. More than a decade later, my sister had taken my bicycle to go out and had run into a flat tyre. She left it that way in the shed. I asked her repeatedly to fix the bicycle or bring it to the repair shop, but she didn’t. When my sister needed her bicycle, I took it and went out. She scolded me and came furiously after me, but I was on a bicycle, thus much faster.

When I was a teenager, I saved money for the future, but Mary Anne was short of cash, likely because she wanted to go out with friends or buy candy. To finance her expenses, she stole money from my piggy bank. I noticed money disappearing, but I needed proof before telling my mother. It was time to set up a trap. After receiving the pocket money, I told my mother in my sister’s presence so she could hear it, ‘I will bring this money to the piggy bank now.’ After doing that, I returned and said, ‘I will now go out to the tree garden in the backyard and will be away for at least an hour.’

Then, I positioned myself outside the house near the front door window to observe the entrance of my room and started lurking. And after fifteen minutes, bingo! I slipped inside, went upstairs and waited for
my sister to come out. I then asked her to empty her sacks, which she refused. A wrestle unfolded, and I cleared her pockets myself, thereby retrieving a sum of 2,25 guilders. And lo and behold, that same amount had gone missing from my piggy bank. I told my mother, but also, this time, she didn’t punish Mary Anne, perhaps out of fear of what my sister might do.

And again, you might think she was just a teenager short of cash. But that was not the whole truth. Years later, when my parents were married for twenty-five years, Mary Anne and I bought a stereo set together as a present for them. It cost 1,000 guilders, but my sister had no money, so she borrowed her share, 500 guilders, from me. She promised to pay back once she had some money herself. Time passed, and my sister did get a job. And so, I asked her nicely several times to give me my money back, which she never did. And then, when we were at my parents’ house, she proudly announced she was saving 250 guilders per month to buy a home with her fancy man, Marcel, who later became her husband. I was furious and made a scene, and finally, I did get my money back. These incidents reflect a disregard for me that was always there. My parents never took action against it, so I had to fend for myself. Many people have suffered far more, but unlike them, I must explain myself to you. I know that many people have suffered far worse than I ever did, but unlike them, I must explain myself to you.

We also had two white rabbits when we were teenagers. My sister later revealed how we got them. When my parents were on a journey, my grandfather came to look after us. She talked my grandfather into buying these rabbits and a rabbit hutch by telling him it was something her parents had agreed to, which was a lie, which she also said. She knew my parents would disapprove, and she still seemed proud of her deception, so when my parents returned, the rabbits were there and stayed. She was an animal lover, or so she proclaimed, and she reproached my father for being a hunter, calling him a murderer, but I had to clean up the hutch. My sister was a popular kid, while I was not. She could get away with things I could not. She often made my life miserable, and the funny newspaper brought it into balance.

We also had two white rabbits when we were teenagers. My sister later revealed how we got them. When my parents were on a journey, my grandfather came to look after us. She talked my grandfather into buying these rabbits and a rabbit hutch by telling him it was something her parents had agreed to, which was a lie, which she also said. She knew my parents would disapprove, and she still seemed proud of her deception, so when my parents returned, the rabbits were there and stayed. She was an animal lover, or so she proclaimed, and she reproached my father for being a hunter, calling him a murderer, but I had to clean up the hutch. My sister was a popular kid, while I was not. She could get away with things I could not. And the funny newspaper brought it into balance.

A final titbit underscores my sister’s character. She had a red-haired boyfriend, Peter, for several years until he broke up with her to date another girl. That was his mistake—never make Mary Anne angry! She schemed to have him back, luring him into a break-up with the other girl and becoming her girlfriend again so she could dump him for revenge. My sister was mean and excessively domineering.

I hate to write about it because it makes my sister look bad. There are no hard feelings. She has changed quite a lot and isn’t like that today anymore. The same is true for me. And now, my sister is in a miserable situation because she has a brain tumour, which she handles with more spirit and optimism than I would have done, so I don’t want to make her life more miserable than it already is. But my mission seems to be the kind that justifies any means and requires you to know the conditions that shaped me. At the time, my sister didn’t seem like preparation for my future.

The story depicts actual events but contains fictitious names.

Latest revision: 2 August 2025

Featured image: The newspaper Pravda (Russian for The Truth) dated 29 May 1919. RIA Novosti archive. Wikimedia Commons. Public Domain.

What’s the use of politics?

nivtricLeave a comment

Politics is worthless many people agree. For that reason, the use of politicians may need some clarification. Humans became the dominant animal species because they cooperate in large numbers in a flexible way. This makes us unique in the animal world. Some animals such as ants and bees can cooperate in large numbers, but they are not flexible in the ways they do that. Their cooperation is based on their genetic code. Social animals like chimpanzees, elephants, wolves and dolphins can cooperate more flexibly, but not in very large numbers. Cooperation in a chimpanzee band, an elephant band or a wolf pack is based on the intimate familiarity of the band members.1

Language is a tool for human cooperation. Animals have languages too. Animals can communicate about the whereabouts of food or enemies. Only, human language is used for many more things. Most notably, humans gossip and talk about what other people are doing and thinking. This gives them better information about other people in the group so that they can develop more sophisticated ways of cooperating. Apes like chimpanzees, baboons and gorillas all show interest in social information, but they have trouble gossiping because their languages don’t allow for that.1

The truly unique feature of human language is not gossip, but its ability to transmit information about imaginary things. All forms of large-scale human cooperation, such as nation-states, churches, cities and corporations, are rooted in fictions that exist only in the collective imagination of human beings. Myths, like the existence of gods, laws, corporations and nation-states, gave humans the unprecedented ability to cooperate flexibly in very large numbers. For example, churches are based on common religious beliefs. Religious beliefs make it possible that Christians who never met before can do things together like going on a crusade or building a hospital.1

Religions and ideologies have a lot in common. You could call them myths or models of reality. Religions as well as ideologies maintain there is a superhuman order of universal laws that govern the world, which should guide human actions. For example, Buddhists believe that the law of nature was discovered by Siddhartha Gautama. Communists believe that the laws of nature were discovered by Karl Marx. Like other religions, Communism had its holy scriptures and prophetic books such as Das Kapital, which prophesied that history would soon end with the inevitable victory of the proletariat over the capitalist system.1

So what does this have to do with politics? In democracies, people can decide about what needs to be done and determine who should do what. Politics involves discussing collective imaginations such as laws, nation-states, religions and ideologies to determine what course of action should be taken as well as gossip to determine who should do what, for instance, who is going to be the leader of a political party or a nation. Many people nowadays believe that democracy is the best political system, even though democracy has disadvantages too.

Politicians may not do what they promised their voters to do. There might be an intense political struggle. And politics might result in poor decisions when voters don’t like the measures that need to be taken. In times of upheaval, people might opt for someone who promises to take drastic action, for instance when the economy has collapsed or when insurgents and criminals wreak havoc. The most notorious example in history was the rise of Adolf Hitler. The suffering of the Germans during the Great Depression and the inability of politicians to relieve their plight helped Hitler to grab power.

Even in stable and established democracies, citizens may have little faith in politicians. The politicians in parliament do not represent the makeup of the population at large. People who like to talk, like lawyers and teachers tend to be overrepresented. Engineers who know how systems work tend to be underrepresented, which may explain why laws often fail to meet the intended objectives. The same applies to poor people and people with little education, which may explain why their interests are often neglected. Perhaps giving citizens more responsibility via direct democracy can help to solve these issues.

Featured image: House Of Commons in the United Kingdom. Parliament.uk. [link]

1. A Brief History Of Humankind. Yuval Noah Harari (2014). Harvil Secker.

Texel Rommelpot Tulips View West.

Wisdom of Crowds and Mass Delusions

nivtricLeave a comment

Emergent properties

How well groups make decisions depends on how their members share information and form opinions. In this regard, there are two opposing ideas: the wisdom of crowds versus mass delusions. As a collective, we know far more than any individual, but collectives can act more stupidly than most individuals would alone. You can more easily reason with individuals than with groups. Shared beliefs hold a group together and define its identity. Hence, groups are likelier to stick to their beliefs than individuals when confronted with evidence that they are wrong. Groups know more, but are also less rational than most of their members would be on their own. As the number of individuals in a group increases, their knowledge increases while their wisdom decreases.

Why is that? Groups aren’t merely the sum of their members. Groups have what experts call emergent properties. These are properties that emerge when individuals form a group. These properties seemingly appear out of nowhere. An individual water molecule can’t generate a wave, but billions of water molecules in a lake can. One cell doesn’t make a horse or a rabbit, but billions of cells do. A group of starlings can fly in intriguing patterns, which a single starling can’t. A single neuron can’t produce awareness. These properties emerge from the properties of the individuals. Individuals have properties that determine what they can do in groups, so a group of starlings can fly in intriguing patterns, while a group of humans can’t. And a group of water molecules can’t become a rabbit.

Collective intelligence

Collectives cooperate and achieve much more than individuals. And they can process more information, which the experts call collective intelligence. Their strength lies in their cooperation and in sharing knowledge. Bees and ants demonstrate collective intelligence. They share information about where to find food and use it collectively. Bees build beehives using a sophisticated division of labour, while ants can collectively defeat enemies many times their size.1

It is a natural behaviour of bees and ants. Ants also demonstrate what can go wrong with collective intelligence. They follow each other’s trails. If an ant accidentally walks in a circle, an entire colony might follow it. They could end up walking in circles until they die. In this case, otherwise beneficial behaviour goes wrong with fatal consequences. That is collective stupidity.1 We cooperate based on shared beliefs, which can be incorrect. Usually, our beliefs are beneficial. They strengthen the group’s cohesion, which is often more crucial to our survival than being right.

Groups know more and perform better on quiz questions than individuals because they can share knowledge. In 1906, an Englishman named Francis Galton discovered a phenomenon, later dubbed the ‘wisdom of crowds’. Galton visited a livestock fair where an ox was on display. In a contest, the villagers estimated the animal’s weight. Nearly 800 people participated. No one guessed the weight of 1,198 pounds, but the average of the estimates was 1,207 pounds, thus less than 1% off the mark.

Galton concluded that the finding suggests that democracy is the best form of government. Taking every view into account in Parliament could result in the best possible decisions. At the fair, the contestants independently assessed the ox’s weight. They didn’t arrive at their estimate in a group process, which may explain why it worked so well.2 And so, the term ‘wisdom of crowds’ is deceptive because it is merely the aggregate estimate of independently thinking individuals.

No wisdom of crowds

There is no wisdom of crowds, but the stupidity of groups does exist. A single Jew can make peace with a single Palestinian, but the Jews and the Palestinians as peoples have failed to do so. Groups have collective intelligence, so they process more information than an individual. Humans are social animals rather than rational beings. Crowds can make better estimates on aggregate, but only as independent individuals, so if their members don’t influence each other.

As long as we retain an independent perspective, we can’t develop groupthink and become collectively stupid. When we influence each other, we can go collectively crazy. We desire our peers’ approval, which clouds our judgment. We are social animals who need the group to survive, so we share our group’s beliefs and don’t openly disagree when we don’t. We may share ideas we know are incorrect, so we ignore our knowledge and pass on the group’s views.

We are prone to moral panics, which undermine our rational thinking. A moral panic is a widespread feeling that some evil person or group schemes against our interests and well-being. Often, genuine concerns are causing these feelings, but the claims exaggerate the harm’s seriousness, extent, and certainty. Usually, the panic comes with false claims inciting hatred and fear. The role of moral panics is to promote group cohesion and generate collective action to remove the perceived threat.

Herd behaviour

Information often spreads through herd behaviour. We usually behave the same way.1 YouTube makes use of it. If you come across a video with ten million views, you are more likely to watch it than one with only ten views. Usually, videos with ten views are not worth watching. In most cases, herd behaviour works to our advantage. It allows individuals to survive with less knowledge by depending on collective intelligence. We can’t know everything, so it is usually better to follow the herd. That saves time and energy. Social media is prone to herd behaviour. A cat video can become more popular because it’s already in favour, while a funnier one may go unnoticed.

The same is true for markets. During the Dot-com bubble, investors piled into Internet stocks. Many investors knew these stocks were crap, but they bought them anyway because they kept rising. Groupthink can cause stock market bubbles. In 1841, Charles Mackay wrote about three financial manias: Tulipomania in the Netherlands, John Law’s Mississippi Scheme, and the South Sea Bubble. He argued that greed and fear drive financial markets and can make people act irrationally to the point that people believe a tulip is worth a mansion.3

Confidence game

Information spreads via opinion makers like influencers and can lead to mass delusions. Confident but mistaken people play a crucial role. Self-assured people aren’t always wrong, but when they are, they amplify their errors because they have followers. Most people are insecure and follow the lead of people who appear self-assured. Leaders must be self-assured. Otherwise, no one will follow them. The business of influencers on the Internet is making money out of insecure people by advertising products no one needs.

Confidence is contagious. During the Dot-com bubble, the loudest voices on Internet message boards boasted about their profits in Internet stocks, thereby pulling in more suckers. The quality of group decisions depends on how we aggregate information. To take advantage of collective intelligence, we should try to:

  • make people feel free to come forward with their information and opinions;
  • prevent groupthink or group members from becoming biased by the information or opinions of others;
  • and focus on the underlying causes rather than incidents.

That is difficult in small groups and even harder in societies. It goes against human nature. We follow confident people. And we don’t always like to hear the truth. The most successful politician in Dutch history was Mark Rutte, who became the longest-serving Prime Minister. He is jovial and cheerful. He was also the most prolific liar, and no Dutch politician had ever lied so often and with such confidence. Rutte once admitted that he had no vision, which probably is not a lie. It allowed him to remain pragmatic and make deals.

Rutte’s talents are now coming in handy as he has become the Secretary General of NATO. So far, he has succeeded in keeping the United States on board by praising Donald Trump for being a master strategist. Humans cooperate based on fairy tales, so lying is in our nature. We even learn to believe the lies, so that they become the truth to us. But if our leaders are friendly, visionless, pragmatic deal-makers, who lie to stay in power, we are surely doomed, given the magnitude of the problems humanity faces.

Collective action

Large groups struggle with collective action problems. The larger the group, the less effective it becomes at addressing challenges. Today, humanity faces global collective action problems, most notably the looming technological-ecological apocalypse and the increasing likelihood of another world war. It has become impossible to hide our incompetence in addressing them. The inconvenient truth is:

  • It is unlikely that we can save ourselves, as the wit of a single worm already exceeds the collective wisdom of humankind. You would make better decisions if you were the leader of the world, even if your judgment is subpar.
  • We must agree on what to do. In cases of fundamental disagreements, we fight. We cooperate based on fairy tales. Force rather than reason is our most convincing argument. The ideas that won out often did so by force.
  • Non-contributors benefit from the group effort while enjoying the advantages of not contributing. If they get away with it, the free-loading will spread. It will undermine the group’s morale, and the collective effort will collapse.
  • Most notably, people in the West suffer from the mass delusion that individual freedom and the interplay of personal interests and preferences through markets and elections ensure the best outcome for the general good.

By withdrawing from the Paris Agreement on combating climate change, the United States has demonstrated once again that it is the land of the freeloaders. Along with our pursuit of material wealth, nation-states and individual freedom are means by which we are about to commit suicide. We can’t deal with the responsibilities that come with freedom.

The saying ‘everyone for himself and God for us all’ reveals a profound truth about ourselves. Humans aren’t capable of solving their problems because of collective action problems and mass delusions. And we are better off with a single leader with unlimited authority. Ideally, this person is like a biblical good shepherd or Plato’s philosopher king. Even someone with a mediocre vision would do, as the wit of a single worm already vastly exceeds the collective wisdom of humankind.

If you like this story, you might want to see this video:

Collective Stupidity – How Can We Avoid It? Sabine Hossenfelder.

Featured image: Texel Rommelpot Tulips View West. Txllxt (2009). Wikimedia Commons. CC BY-SA 4.0.

Latest revision: 30 October 2025

1. Collective Stupidity – How Can We Avoid It? Sabine Hossenfelder. YouTube.
2. The Wisdom of Crowds. James Surowiecki (2004). Doubleday, Anchor.
3. Extraordinary Popular Delusions and the Madness of Crowds. Charles Mackay (1841). Richard Bentley, London.

Satire on False Perspective. William Hogarth (1754).

Strange Universe

nivtricLeave a comment

The license plate number on the car that drove Franz Ferdinand to his appointment with destiny was just one of the remarkable incidents and experiences on record. In many cases, we can establish the relevant facts to the point where there is little doubt that the event has indeed occurred. We have no evidence suggesting someone has changed the licence plate. Perhaps science will explain these things in the future, as this universe may have properties we don’t yet know. Some have come up with explanations that let go of our understanding of time and cause and effect.

Our usual way of perceiving events is that something happens in a particular place at a specific time. We think of a place as a constant as time passes. Events in the past caused events happening now. And events in the present cause future events. The Allied invasion took place in Normandy on 6 June 1944. Normandy is still there, but 6 June 1944 is history. The liberation of Western Europe from German occupation is a consequence of D-Day. If D-Day had not happened, history would have taken a different turn. In this way, cause and effect work. That makes sense to us.

Perhaps, events connect in ways other than causality and time. The psychiatrist Carl Jung proposed a collective consciousness that connects all events through meaning. If you believe it, that can explain a few things, such as reincarnation accounts and premonitions. Perhaps the collective consciousness carries a deceased person’s memories into someone else or gives premonitions that come true. According to science, this is all total gibberish, not even worth a second of your thought, as it contradicts established laws of science. Only in a story can events connect via meaning.

Others think of time as a dimension, so you can travel to a time like you can travel to a place, even though nobody ever succeeded in doing that as far as we know. These ideas counter our traditional notion of cause and effect over time. But so does the theory of relativity. And the theory of relativity proved to be helpful, so we consider it to be true. Perhaps physics will one day explain premonitions.

A reference to the end date of World War I could thus have ended up on the licence plate of Franz Ferdinand’s car because of some connection we don’t yet know. No plausible explanation is available for that connection, but perhaps some property of this universe is still unexplained. And maybe both are true. All points in time might be connected in another way, while causality also applies. Physicists have to work with queer phenomena that are hard to explain. For example, light behaves like both particles and waves, but waves can’t be particles.

Alternatively, a time traveller could have put AIII 118 on the licence plate, even though the theory of relativity doesn’t allow for that. Time travel to the future may be possible, but going back in time creates logical problems. It would alter future events. And there is another fly in the ointment: chaos theory. Insignificant disturbances can have dramatic consequences. If I could go back to 1914 to screw a license plate with the combination AIII 118 on the car, that may derail the events that were about to occur, and World War I would not end on 11 November 1918 and perhaps not even have started. And sneezing can be enough to do the job, just like a butterfly in Texas can start a storm in China. It seems likely that the Austrian authorities issued the license plate. Plate AIII 118 probably came after AIII 117 and before AIII 119, so we can drop this imaginative scenario into the bin.

And look at what scientists are doing. Recent measurements confirmed the electron’s roundness to a record level of exactness. It deepened the mystery of why the universe consists of matter rather than antimatter. Any asymmetry in the electron’s shape would point to a related asymmetry in the laws of nature that could explain this feature of the cosmos.1 Scientists were baffled. Metaphysical speculation also dominates science, and scientists imagine invisible friends like gravity and electrons to describe our world. And then they discover something suggesting that some of their imaginary friends may not exist. Well, who would have thought that?

Maybe we should let our imagination run free. Anything is possible if we can think of it and corroborate it with experiments. It is how science progresses. A piece of fruit could be an apple for as long as you look at it. And it can turn into a banana once you look the other way. Scientists believe that if experiments confirm it. Some particles turn into waves when you don’t look. Scientists might even base their theories on things that are impossible but do happen because we live inside a simulation. We don’t know that, of course, because we don’t know the properties of a genuine universe.

Some laws of this universe appear ridiculous. Only why should they make sense? Nature doesn’t exist to make sense to us. We can imagine that this universe is a simulation to avoid logical difficulties. It makes more sense than apples turning into bananas. Assuming the obvious, however, can be dangerous. If it quacks, walks, and swims like a duck, it might be a great actor in a duck suit. Apples could turn into bananas when you don’t look. Of course, when you place a camera to observe them, they don’t. And one plus one might only equal two after you have solved the equation. And if faith moves mountains, this universe could be genuine as long as you believe it is.

Latest revision: 19 July 2025

Featured image: Satire on False Perspective. William Hogarth (1754). Public Domain.

1. Electrons are extremely round, a new measurement confirms. Emily Conover (2023). Science News. [link]