The Wisdom of Crowds

I have a book called “Extraordinary Popular Delusions and the Madness of Crowds” by Charles Mackay. The book talks about the follies that crowds seem to indulge in. He covers a wide range of historic events and activities such as The South Seas Bubble, Tulipmania, The Crusades, Witch Mania, Alchemy and Fortune Telling among other things.

The book was originally published in 1841 and was reprinted as recently as last year so it has some level of popularity. It is written in the language of 1841 which makes it a difficult read for a modern reader such as myself. If you are unfamiliar with any of the topics listed above I suggest you have a look at Wiki at the least as all of them are interesting topics.

The over arching theme is of course that crowds are dumb. The words delusion and madness in the title sort of give the game away as to what Charles thinks of crowd behaviour. My personal experience of crowds seems to mirror Charles view that groups of people acting mostly in dumb ways and in ways that they as individuals would probably not.

One kind of example springs to mind, when I was at university the lectures were timetabled to finish around lunch (I forget the exact time now) and hordes of hungry students would head to the cafeteria leading to a crowd shuffling forward to enter through the main doors. To the left of the main door by approx 5m was a single door leading to the same space as the main doors. No one ever used the single door despite myself and others repeatedly walking past the crowd and through the single door. For some reason the people in the crowd were unable to observe this behaviour and modify their own to take advantage of this fact. The pull of the crowd was greater than their hunger it seems.

This propensity for crowds to act in dumb ways has always bothered me because crowds vote and my worst fears are borne out every time they elect a left wing government or a single issue candidate.
However what is up with the crowds at the moment? The break out of popular uprisings in Egypt and now Libya are examples of crowds acting for the good. (assuming you agree the countries should not be run by dictators for their own benefit) Although I guess I could argue that they are still being a bit dumb, I mean a number of people have been and continue to be killed as part of these protests. Turning up to a protest rally where you may go home dead may not be the smartest thing you ever did but clearly an example of several crowds acting for the good.

But the current crowd action which is perhaps the most interesting is what is happening around Christchurch at the moment with so many stories of spontaneous actions by groups of individuals acting in a positive and unselfish way to help those around them who are worse off. And while the likes of the Student Volunteer Army grab the headlines the little stuff of neighbours forming up to hold group BBQs or the bloke that happens to have a spring in his yard and is supplying water and the thousands of other acts of kindness that I will never hear about.

With all this good stuff about let’s hope that we can maintain our focus on the positive members of the community, the clear majority, and the media can resist the temptation to highlight the complainers who will surface shortly. The “why isn’t the government doing more brigade” who are out there waiting for their moment in the spotlight.

I also wonder why it takes a crisis to bring out the best in people?, or does it? is it just that I get to hear about it in a crisis?

So despite ample evidence that crowds are dumb, sometimes they produce fantastic results and probably this mostly speaks to us being social beings at heart. I am still a bit worried about crowds voting but clearly I should retain my faith in the human condition which in the majority is a force for good.

When is Sleeping Working ?

So the so called “sleep over case” is in the news.

First up let me declare a conflict I am effectively the employers representative for an organisation that employees people to do sleep-overs. Nothing I say here represents the views of my employer and are my own personal opinions which may or may not be reflected in my working role.

So to answer the question it is when you are sleeping on your employers premises and have your freedoms curtailed to a sufficient extent. To be more specific the courts talked about your inability to leave, your inability to say have friends over (in other words certain activities are banned) and be available to work at any time.

If we reframe this to say a shop assistant waiting for a customer we still recognise them as “working” while waiting and it is principally because the same tests apply, they can’t leave, can’t do certain things and have to work at any time when a customer arrives. The only difference they have to have their eyes open versus shut.

So I am convinced you are working when doing a sleep-over, in fact in reality despite the legal arguments all the employers were convinced which is why they paid people to do this task. What is mostly at question is the value of the work.

Having decided that the activity is work you then have to abide by our old friend the Minimum Wage Act and this is really what the decision is about, the payment of the minimum wage and not really an argument about work or not work.

Problem is we run into my gardening argument, The government and by extension the employers that it funds do not value this work at the minimum wage level (or they would already be paying it presumably). They value it at a lower level, (as best evidenced by the government threatening legislation to make this issue go away and making specific reference to not paying the amount asked for) now this lower level varies across those employers and as an aside I suspect that if IHC had valued it a bit higher it never would have gotten to this point.

I also find it interesting that despite the Union and Employees agreeing to various payments over time all this is going to be overturned which is effectively the government (via legislation) saying you are not competent to make a bargain between yourselves as we know better. Admittedly in the case of IHC the Union have apparently been discussing this for some time so they may dispute that they agreed, however they did sign up for what they have now one way or another.
But in the case of my employer this has never been an issue but we are now suffering the same outcome.

I am also interested that this is potentially not in the best interests of the employees as there are a number of definite and potential consequences stemming from this but without going into my theories on what might happen next they all amount to one thing. The amount of work available is going to reduce as the cost has now increased. Now in the best case we will find equilibrium from the status quo where the total amount paid will be the same, however there is a real risk that there will actually be a reduction in the overall amount.

Another quick reaction from some of the providers is that they are going to erode the quality of the service they provide (by grouping people into higher numbers) something that has been rightly deplored by the Disability Sector, however it is one of the predictable responses to a need to reduce costs.

So given that the total amount paid to workers will likely stay the same or reduce how did this help anyone other than high priced legal counsel, not the workers and not the vulnerable members of society that they are doing a fantastic job caring for. Oh I remember it is all part of the process.

Rome Wasn't Built in a Day...

And certainly not by a committee.

I have been listening to the radio and in quick succession I heard two articles about a failure of leadership, or at least that is what I took from the articles.

The first one was about the Australian Navy having made some bad decisions about what ships to buy or what design to use or from whom. The upshot of this is that because ships take a long time to build they are now short of the needed equipment as the old ships are now end of life and the new ones are yet to be built due to some or all of the reasons above. The Australian Navy’s issues with its ships isn’t that interesting it is what the Minister said in response to this, he said “we must ensure we have a more rigorous process when it comes to these decisions” and he will be “insisting that officials review all of their process” In other words he was going to have a stern word to the committee that stuffed things up. I mean give me a break in times past if the Navy ran out of ships the minister would have resigned and several admirals would have been keel hauled or shot. There would not have been a discussion about any process or committee, the leaders would have been held accountable.

So the next one was closer to home where there have been complaints from Principals about the quality of recently graduated teachers, specifically they do not have adequate literacy or numeracy skills to teach at a primary school level. (begs the question if they can’t read write or do arithmetic what can they do but we shall ignore that for today) When the head of the teachers college in Christchurch was asked about this, she responded that if this was the case then these individuals would have their practicing certificates tagged accordingly and this would reduce their employment chances. (note for any parents out there she didn't say eliminate) The interviewer asked the obvious question, why were these people graduating at all and why wasn’t the college teaching them this stuff to bring them up to standard. Response “we don’t teach literacy and numeracy because all our students have University Entrance which shows that they have reached the required standard in these subjects.”

So here we go again, the answer to a problem is more process, i.e. we will tag the practice certificates rather than actually fix the problem. And when challenged on the fundamental issue we get more process, i.e. "well they have UE so how is this my issue", was essentially what she said. In other words I followed the process. It is at this point where I have the urge to track this person down and say to them (very slowly no doubt so that they get it) “never mind the process you failed to achieve the outcome”

These are just two examples of how the world seems to work these days, we no longer care about outcomes we just care about following the process. I believe that this is because we no longer allow strong leaders to lead, everyone wants to have a say and nothing of any consequence was every achieved by a committee.
We need to retreat from attempting to systematise everything and begin to place a bit more trust in leaders.

The big objection to a leadership / outcome focused model is that sometimes leaders get it wrong and you get failure. (which seems unacceptable these days as well)  Well to me a few more failed student teachers wouldn’t seem to hurt (rather than the stupid PC rubbish of no one failing) and as the Australian Navy will tell you lots of process doesn’t guarantee success either.

Mary Mary Quite Contrary

How does your garden grow goes the rhyme and ignoring any issue Mary might have the garden at my house grows too much for my time or interest to keep under control. What I really need is a gardener but I don’t have one because.... potentially for a number of reasons but for now I want to look at the cost or put another way the wages I would have to pay.

New Zealand (as with a number of social reforms) was the first country in the world to introduce a minimum wage rate. This week has seen the government raise the adult minimum wage from $12.75 to $13.00. which produced the predictable claim and counter claim by the vested interest groups of unions and employers. My reflex response was to side with the employers who were running the standard supply and demand argument.

This is where my garden comes in, if I was allowed to pay someone $1 per hour and could find someone willing to work for such a paltry amount there is no doubt that I would employ a full time gardener (and likely as not a cook and housekeeper) but at $13.00 per hour I am not going to do that so there you go case proven. The artificially higher wage rate clearly limits employment opportunities and while the dollar example is not realistic somewhere along the line between $1 and $13 is the point at which I change my mind. Potentially before I reach that point someone may have been willing to do my garden but we will never know.

However I realised I was not well versed in the contrary point of view (the union commentator didn’t help he was operating strictly in sound bites and slogans) So I looked it up and here is a handy table I found on Wikipedia

Supporters of the minimum wage claim it has these effects:

1. Increases the standard of living for the poorest and most vulnerable class in society and raises average.

2. Motivates and encourages employees to work harder (unlike welfare programs and other transfer payments).

3. Stimulates consumption, by putting more money in the hands of low-income people who spend their entire paychecks.

4. Increases the work ethic of those who earn very little, as employers demand more return from the higher cost of hiring these employees.

5. Decreases the cost of government social welfare programs by increasing incomes for the lowest-paid.

6. Encourages the automation of industry.

7. Encourages people to join the workforce rather than pursuing money through illegal means, e.g., selling illegal drugs

So looking at each of these in turn

1 Seems doubtful to me as wages are a relativity exercise a 2% increase for the lowest paid is likely to trickle up to the best paid making the relative standard of living static. If you won’t buy that argument then you would have to agree that wage inflation feeds into general price inflation making the increase payment merely a compensation for inflation at best or the driver of inflation at worse.

2 Nope, not going to buy that one. People don’t work harder if you pay them more, time and time again studies have shown little correlation between pay and performance unless it is a direct system such as piece work.

3 OK I will accept this one as it is more or less my argument in rebutting number 1, but I am not sure this is a benefit for the low paid, it sounds more like a benefit for shopkeepers.

4 Err really? So every time you get a rise your boss finds ways to make you work harder (and in the process needing less of you presumably) Well I am not sure that is true for a start but this cycle between increased productivity and increased wages is the classic economic cycle and doesn’t need the government to intervene.

5 I have no real knowledge of this as a truth or otherwise but it sounds doubtful to me. Most welfare in this country is directed at non workers, not low paid workers.

6 This one I believe, as it is a substitution of labour for capital but it is really at odds with number 4. However regardless of all that how does that help the low paid, now they have no jobs, which if you recall is the argument put forward by the employers, finally it seems both sides are in agreement.

7 In the immortal words of the Tui campaign Yeah Right. People don’t sell drugs to earn $13 an hour, there are different reasons people get involved but I don’t believe for a second they are going to give it up for a $13 an hour job, especially with those nasty bosses in number 4 finding ways to make you work harder all the time.

So I remain unconvinced to say the least. While government intervention in the employment market may be useful for eliminating the worst employment practices, such as low paid child labour, it seems to become increasingly doubtful in its usefulness the closer it moves into the centre of the bell curve of employer behaviour and potentially an infringement on the "right to work" at some times.

As an aside here is the history of the Mary Mary rhyme, have a look.  http://www.rhymes.org.uk/mary_mary_quite_contrary.htm

Are Rights Optional

Article 23 of the UN Declaration of Human Rights section (1) states that we all have “the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.”


My first thought about this is that a “right” to work might be the first right I might be prepared to give up assuming of course that my “right” to my pay packet remained intact but assuming that isn’t about to happen any time soon I was wondering about the validity of this idea.

Isn’t work more of an obligation than a right or at an even lower level isn’t it necessary for survival. I mean in a world without social security type support if you didn’t work you would starve and die. The UN declaration doesn’t feel the need to spell out the “right to breath” or “right to eat” and potentially work is in the same category.

If we cast back to pre history if you didn’t get off your butt and find something to eat i.e. do some work, then you would soon reap the consequences. So along comes a barter type system where we trade based on skills but again if you didn’t have anything to trade the consequences would be dire. So moving along to our current set up and momentarily ignoring the social contracts we have now to look after the weaker members of society then surely the same imperative of “work or die” remains.

So you probably think that this is just semantics, who cares if we call it a right or just something we all have to do. Well with rights come obligations. For example if you have a right to free speech then I am obliged to allow you to speak without interference. If you don’t have this right then I am presumably justified in taking steps to shut you up if you say something I don’t want to hear.

This is the bit the intrigues me about work, if I have a right to work who carries the obligation to provide the work for me to do? And if you don’t give me some work are you not infringing on my rights? Clearly we have unemployed people in this country (I hear about them regularly on the news although I don’t know any personally) Assuming that at least some of them wish to exercise their “right to work” does that mean we are paying them hush money (in the form of the dole) to stop them suing for society breaching their rights.

Can we extend this idea, can I apply to the government for “Quiet Money” where I agree not to exercise my right to free speech and not to say inflammatory things in public in return for some cash. There are 30 UN “rights” there could be a number of them I could cash in. Article 23 again section 4 has a “right to join a trade union” and although I have serious doubts about this even being in this document (how come my right to join a golf club or a chess club is not mentioned) given that it is I am very happy to trade this off for some cash given that I have no intention of joining one.

The idea of work as a right has brought with it a whole range of obligations which have been placed on employers but given this is a voluntary role (I presume you can’t compel people to be employers although the UN declaration is silent on this point so maybe you can) (I just realised I am often compelled to be an employer via the taxes I pay but that is a whole new topic.) is this a rational approach.

As a final thought the next time some right wing politician (it tends to be them) suggests a “work for the dole” scheme just remember they are merely trying to meet our obligations as a signatory to the UN declaration and protect unemployed peoples right to work.

I Better Make This Quick

It is not that I am under any particular time pressure it is just that societies view of the world seems to be that quicker is better resulting in, amongst other things, a short attention span for most people.


I am not sure I understand this obsession with “faster” and “now”, especially with regard to the collection and dissemination of information, but all aspects of life suffer from this ideal. If for example you live in a quiet rural place your city cousins are likely to look down at your “slow pace of life” which is regarded as a bad thing (by them)

So there is one place where speed is a definite advantage and that is combat (any type, single combat or massed troops) Consider the cycle of receiving information, processing, deciding on a counter move and observing the response. If you can do this quicker than your opponent you are far more likely to win the battle, modern warfare for example is a lot about knowing where the enemy is and what they are doing so that your response is effective.

This “combat” model has been taken into the world of business, where once again you are often in competition with an opponent (or several) and your speed of decision making and ability to be agile and move to meet the market and out manoeuvre your opponent is an advantage.

However we seem to have let this mentality spill into our private lives and assume that speed is always an advantage.

Let’s look at slow, when is “slow” a good thing, well it seems to me that it is most often associated with pleasure. To chill out on a beach and read a book, to savour a lunch with friends and waste away the afternoon chatting over a glass of wine. To make love with your partner. These are some things where slow is a good thing.

So if speed is to do with combat and competition and slow is to do with pleasure, how come so much of our energy seems to be directed toward a “fast” life. I don’t know about you but my life seems to be going by much faster than I would like already so it is time to slow things down and presumably enjoy more.

In the book Catch 22 there is a character who tries to remain bored as much as possible as he has observed that time goes very slowly when he is bored and he is trying to live a long life. This might be taking things a bit far but the “slow down and smell the roses” line that we hear a bit does seem appropriate.

So sorry to take up so much time out of your busy life, or on the other hand take the time to have a coffee with someone today and ask them to share a memory of a great time with you. I bet it seldom has anything to do with a short, efficient, time bound, activity.