[This is the addended version of my regular KVMR commentary which was broadcast on 4 April 2014.]
Recently our government has had some problems forecasting events critical to the conduct of America’s foreign policy. We seem to have missed the boat on calling the response of Iran in its nuclear weapons development, the reaction of Syria confronting our ‘red line’, Al Qaueda’s attack in Benghazi, Putin’s reaction to warnings about Crimea, and the list goes on.
Similar problems have been encountered for years by government and private sector economists and analysts in forecasting our economy’s response to various fiscal and monetary policies, and, of course, how people would react to new social programs offered by the feds. The bottom line is that economists, analysts, bureaucrats, and politicians are always surprised by reality when it happens.
The art of forecasting such events and responses has been a mainstay of our intelligence community, and a lot of effort has gone into coming up with new methods and processes to improve the accuracy of forecasts. Today this research has involved lots of ordinary people who are neither forecasting nor intelligence specialists. The field is loosely described as soliciting ‘the wisdom of the crowd’.
It turns out that when you ask a lot of people to estimate some outcome, and then aggregate their answers, you wind up with a surprisingly good result. This was discovered about a century ago when fair goers in England were asked to estimate the weight of a steer. It turned out that the average of the several hundred submitted estimates came within a pound of the correct weight of the well over a half ton animal. Since then this has piqued the interest of researchers, and today there are several organizations using ‘crowd sourcing’ to forecast events.