Saturday, October 3, 2009

Seeking Wisdom

A book I read a couple years ago is fairly well summarized at:

http://en.wikipedia.org/wiki/The_Wisdom_of_Crowds#Four_elements_required_to_form_a_wise_crowd

The book was written by James Surowiecki who is the staff writer at the New Yorker for the Financial Page.

It seems to me to go without saying that the pricing of farm milk could do with considerably more wisdom than has been observed.

The elements of a “wise crowd” according to James Surowiecki is:

•Diversity of opinion – Each person should have private information even if it's just an eccentric interpretation of the known facts.
•Independence - People's opinions aren't determined by the opinions of those around them.
•Decentralization -People are able to specialize and draw on local knowledge.
•Aggregation - Some mechanism exists for turning private judgments into a collective decision. (This could be an actual functioning market.)


The system used to determine farm milk price is the exact opposite of wise. The system with the supporting cheerleaders are prime examples of intellectual inbreeding.

We need to find a way price farm milk from an information rich system. Unfortunately, there is a moral dilemma in that those in power having a lot riding on continuing the status quo. At the other end of this imbalance of power are the vast majority of dairy farmers who quietly accept the check in the mail box.

1 comment:

  1. Years ago Arden Tewksbury was trying to tell farmers what was going to happen to our milkchecks. Famers would just keep on going not paying attention to what was going to happen. So when the price got low use rbst or add more cows. Shoot yourselve i the foot.
    I remember all the meetings we went to. One that really sticks in my mind is when we were at this one and our congressman and reporters were there, my daughter was in elementary school and she looked up and me and asked how come there are more reporters than farmers. What could i say. Oh by the way she is 20 now. My question is why did we let this happen?

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