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David_Gerard comments on Rationality Boot Camp - Less Wrong
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I think the karma system on LessWrong works surprisingly well, as long as people remember that "Vote up" and "Vote down" means "more like this" and "less like this", rather than "agree/disagree". There are standard beliefs and some groupthink, but you can still get upvoted for quite cutting criticisms if you show in your comment that you've done your homework and understand what you're objecting to.
I don't think there's anything broken about the current system. Certainly the comments on LessWrong are exceedingly high quality in general, particularly compared to pretty much any other site.
I believe that the quality of the comments could very easily be independent of the existence of the karma system and dependent, instead, on the high quality and low number of participants. It might well be that pretty much any crude moderation system would work about as well. I remember certain Usenet groups which were quite high quality, in particular comp.ai.philosophy (I think it was called), back around 1991 or so. I had some satisfying discussions there, at quite a high level. So, it's not as though high quality conversation was not to be had in an unmoderated forum, provided the participants were sufficiently few and sufficiently good, which was I think largely achieved in that group. In larger groups there was more noise.
Karma depends on voters, so a low-population forum will not be much affected by karma. Karma really kicks in, really affects what goes on, when the number of participants goes up. And what happened at Digg and Reddit are examples of what I expect to happen anywhere where the forum explodes. Karma becomes a powerful tool of groupthink, firmly establishing an echo chamber.
I suspect this is part of the normal lifecycle of Internet forums. A Group Is Its Own Worst Enemy by Clay Shirky is the standard work on the topic.
Contrariwise, a group norm against status rankings does not stop them happening - it just means they form where you're not looking and bite you in the backside. The Tyranny of Structurelessness by Jo Freeman is the standard work on this topic.
To summarise the summary: people remain a problem.