The Wise Guys Democracy

Modern societies are quite complex and it is virtually impossible for anyone to be completely and correctly informed on what is going on. Even assuming the access to a complete and correct set information (no fake or misleading news), understanding such a complexity requires a remarkable effort in terms of time deployed not to mention skills and abilities needed to achieve a full comprehension.

This has a relevant consequence for democratic process: we select candidates at political and administrative elections without fully understanding the consequences of our choice.

This phenomenon amplifies at least 3 common flaws of modern democracies:

1-The ability of lobbies and any other minorities with shared interests to promote policies aimed at obtaining gains for themselves at expense of the others because the less voters know and understand, the easier is to approve rules that can harm them.

2-The preference for policies with short term benefits over those with immediate costs and greater long term benefits because the balance between present costs and future gains requires time and education to be correctly assessed

3-The electoral competition based on emotional narratives and irrational beliefs rather than on pragmatic discussion of real problems because wrongly informed an poorly educated voters are the most likely target for political strategies based on emotion and ideology

How can all these problems be mitigated by social media technology?
The mechanism of social networks has proved to be quite effective for sharing information with a large number of people and to manage the individual reputation of community members.

This mean that the burden of fact checking activity and convenience assessment of public policy proposals could be conveniently split among a large number of individuals rather than carried out by a single institution and that reliability and independence of the analysis could be guaranteed by a peer review mechanism.

Assume to have a mass collaboration system similar to wikipedia with 2 main goals: 1) verify news and debunk fakes 2) perform a convenience analysis of political programs and proposals. Than imagine that this mechanism is part of a wider social network similar to Twitter so that content produced are user friendly and easy to share. Assume also to have a set of rules that grant reliability of content produced, minimization of noise and consistency of the network. Finally assume to have a compensation scheme that collects donations by users satisfied by the content found on the network and distribute rewards to those who produce them.

We may call this very peculiar social network “The Wise Guys Democracy” anddesign it for a large number of basic users that we may call “Citizens” and a limited number of “Wise Guys”. The system is based on 3 main rules:

Rule 1only wise guys can produce and edit contents (citizens can file questions and answering citizens questions is supposed to be the main driver of content production by wise guys)

Rule 2: the “wise guy” status is based on a reputation score determined by feedback received by other wise guys (administrators of the system creates the first wise guys and are supposed to monitor contents and user activity)

Rule 3: wise guys receive a reward for their activity financed with donations collected by other users (this is aimed to create a stronger incentive to wise guys )

Strong Lobbyists with deep pockets can hardly be defeated by a non profit initiative aimed at promote transparency and it would be naive to think otherwise. Nevertheless if a precise and independent assessment of any new policy proposal were available in a user friendly format it would be easier for the public to be aware of the consequences of their political choices and it would be harder for lobbyists to charge the public with unnecessary burdens.

The final target is not to have people make always the best decisions (it would be questionable how to determine what the best decision is) but to avoid as often as possible the worst ones.

The Wise Guys Democracy is a concept idea for a non profit and open source project aimed at improve transparency in political system and enhance awareness of voters regarding their choices. A more detailed description of how the project is designed will be provided in a separate post.

Originally published on Medium

Do you like these updates? subscribe my newsletter 

Are you interested in Italian banks and NPL/UTP market? Ask for a briefing  (in person or via conference call) by sending me a private message. I am also available for consulting projects on Distressed Assets pricing and Portfolio Management.

Link to my updated business profile

To get further updates Join the Linkedin Group – Entering Italian NPL Market  and follow #Liberi Di Scegliere via @blastingnews

Contents of this blog are free but time do have an opportunity cost. If like the contents and do want to reward the time deployed to produce them you can make a small donation via Paypal (if you prefere a bank wire send me a message via linkedin o Twitter)



GLG – Gerson Lehrman Group – Council Member

About Massimo Famularo

Investment Manager and Blogger Focus on Distressed Assets and Non Performing Loans Interested in Politics, Economics,
This entry was posted in Unconvenient Ideas and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s