Do you consider democracy more a preference discovery machine, that is good at finding the preferences of the population and thus gives insight into the preferences of agents. Or do you think democracy is more a mechanism of aggregating information in a wisdom of the crowds way where the input of lots and lots of people leads to good outputs.

A little more on preference vs wisdom. I don't think there is a bright line separating the two things, especially as implemented on the ground.

It seems to me that people generally believe, and state strenuously, that their preferences derive from superior wisdom. My Republican friend seems assured that if I understood how much wealth the Gov't destroys when it has resources instead of having them left in private hands, that I would, perhaps sadly, abandon many of my progressive goals for gov't because I would understand that their price is so high I would fill my electoral shopping cart less to the brim. I assure him that in a world where all children are raised wtih all the advantages of rich children that the excess human capital released could make his (rich) children at least as rich after taxes, and probably richer, than a program where he keeps his money for his children and poor children are left undeveloped. To me this is straightforward wisdom: Harvard and Yale produce great leaders whether seeded with with rich children or poor children, It is merely an excercise in science to determine what the essential features of a rich child's upbringing are that must be provided by the state to poor children to keep this virtuously productive cycle going, but the good news is we already have such great indications of success in our society.

In the absence of being able to agree on the wisdom of these various things, we argue over them. Write that story across the entire society, and mix it with thousands of other grand policy issues and petty, local policy issues that impact productivity in a local-scale way. Shake vigorously then hold an election. Surely the election is influenced by people's changing beliefs over which of the argued positions are wise and which are deluded. Surely those who are sure they are right and have the electorate turn against them will NOT agree the electorate is a wisdom-of-crowds producing machine.

But we could probably all agree that it is preference determining machine, and that most people prefer wisdom, so in a slow and clunky way, it approximates a wisdom determining machine. And it determines wisdom in that in a noisy fashion, good results that come from policies are reinforced by the voters to whom those good results flowed, EVEN when those voters are not part of an ascendant and vociferous minority. So you might never have convinced the captains of industry 100 years ago that unions needed more power, but 100 years ago voters sure as hell thought they did, and the long run result has (arguably) been a high level of quality production as, by law and then by custom, working conditions became safe, and pleasant, and respectful of the workers, who in turn were able to "join the team." So did this come about because voter preference was discovered, or because wisdom was discovered? The fact that nearly all of us hate wasting our efforts and our resources means that we largely prefer wisdom.

Of course, in my opinion, the vote also is better described as a preference machine than a wisdom machine when we look at some more extreme issues. Race in the U.S. (the mindkiller, but I think at least the two of us can keep our minds running while we talk briefly about it.) There is no question that elections in the sourthern states 60, 70 80 years ago were displaying the preference against having blacks integrated in to society. There can be little doubt also, in my opinion, that having had integration shoved down their throats, you can't find a majority anywhere for a miscegenation law, forget about banning blacks from a publicly funded state university or allowing their banning from a restaurant. Did the right answer change over that time? Probably not. It just took that long for preferences to change, and they changed partially because it was seen that having blacks included was preferrable (wisdom) and partially because hating a subgroup can only be propagated when it is propagated, and interfering with it tends to make it disappear.

Anyway, I think voting is a preference machine which because people prefer wisdom, is a slow and noisy wisdom machine.

I am reminded of the stock market about which the wise say, in the short run it is a voting (preference) machine, in the long run a weighing (wisdom) machine.