James Surowieki wrote:
Generations of advertisers and business gurus have banked on the premises of Sigmund Freud's ''Group Psychology and the Analysis of the Ego,'' a slender volume with a big argument: when people assemble en masse, all the raw material making up the individual psyche (libido, aggression, whatever) is also present, but on a gigantic scale. And the power for rational thought is thereby dwarfed. The crowd is considerably dumber than its smartest members. This explains, for example, Britney Spears, irrational economic exuberance and the occasional episode of public yearning for an authority figure to do the superego's job, whether by seizing state power (the fascist dictator model) or by going on television to say ''You're fired'' (the reality TV version).
This isn't Freud's argument. The result only occurs in a "psychological group." A random collection of individuals put together in a room and asked factual questions has nothing to do with the idea. Ditto for the beans in a jar "experiment" and the rest of the allegedly refuting evidence.
A group that does illustrate the idea is a lynch mob.
By the time the author comes to the topic of cooperation, we are not just in the middle of the book but at its core. There is a certain notion of rationality that starts from the assumption that each of us is, in essence, a monad designed to maximize profit and pleasure. Our interactions with one another are, by that light, a means of self-aggrandizement. If you do not kill me for my wallet at the first opportunity, or vice versa, that is because we are afraid of certain consequences we predict might be bad, like being arrested.
But research consulted by Surowiecki indicates that we do in fact have prosocial tendencies. Given the chance to cheat, lie and freeload, fewer people do so than one might expect. (I, for one, am relieved.)
This is consistent with a Freudian interpretation of the mistaken "notion of rationality" as pychopathological.
The market is a mechanism for translating ''the wisdom of crowds'' into optimal results
This isn't true. The mania induced by psychological group formation does periodically dominate financial markets. Even when this isn't so, financial markets can't produce optimal results in this sense because much of the relevant future is unknowable. The actual prices reflect conventional psychopathological ways of denying this fact.
Freud at least has the advantage that in his psychology persons aren't treated as lifeless externally related fragments of matter in motion completely determined by imposed laws. The latter ontology, which is the starting point of most of his critics (e.g. the Darwinian human sociobiologists, the mind is a brain is a computer psychologists, the behaviourists, the orthodox psychiatrists etc.), is the product of unmastered hateful sadistic destructiveness. "We murder to dissect." On the "left," this reappears in the interpretations of Marx as a "materialist" in this sense and in the immunity of such interpretations to rational refutation by the abundance of textual evidence that contradicts it.
Ted
