Obama and the Wisdom of Crowds

A reader writes:

You have mentioned "the wisdom of the crowd" as the underlying mechanism for why group decisions and democracies normally work better. Aggregate decisions that are freely made give better outcomes to more people. How was this the case in Obama's election? At the time, and even now, I was and still am unable to see how electing Obama was a benefit for the majority of Americans.

Can you shed light on this?

Thank you for your question. The wisdom of crowds means that the average decision of a crowd is generally better than the decision of any given individual. The power of competitive environments and free markets is that people can pursue different goals within them, satisfying different individual needs (1.6.2 Types of Motivations).

While a lot of different people voted for Obama for a lot of different reasons, there were three groups that were critical to his election outside of the normal Democrat/Republican divide. All of which can be gratified by his election, even while disagreeing with many if no all of his policies.

  1. Many people wanted to address a very common, long-lasting critique that America is dominated by racial prejudice. A critical percentage of Americans saw an opportunity to prove once and for all the race is not that important in the hierarchy of American values in by electing a black man as president. This is a long-term benefit. Never again can anyone say (honestly) that racial prejudice is a bar to any goal in America.

  2. An important role of the US president is being the spokesperson for the nation. One of my biggest criticisms of Bush as a commander was of his weak abilities of a communicator. In contrast to Bush, Obama presents a much more polished and professional face representing America. Obama may be wearing out his welcome in this regard, but his speaking ability was a pleasant change at first.
  3. As is usually the case in American politics, the election wasn't won by Obama and the Democrats as much as it was lost by the McCain and the Republicans. Bush's, McCain's, and the Republican Congress's embrace of big government spending lost them a critical component of their support. In a nation that where there are more conservatives then Republicans and fewer liberals than Democrats, many conservatives could no longer support Republicans who support big government spending solutions as a reflex. McCain probably would have won had he come out against the Bailouts in the final weeks of the election. By supporting them (and other government programs such as Cap and Trade that conservatives opposed), he sealed his own fate. While this meant a loss for conservatives in 2008, it has moved the Republicans back toward their base of small government, fiscal conservatism. This is what many conservatives were hoping would be the effect of refusing to support McCain.

I refrained from commenting on Obama's policies for most of his first year in office because it takes time for a President to get his feet under him. However, in the past few weeks, many of this administrations decisions have been so shockingly amateurish, that they are too perfect for the illustration of common strategic mistakes.