The Karma system is better than nothing, and also better than even simpler systems as Facebook's like system, but the main problem is that it is too simple.
Presumably the Karma system is supposed to at least do two things:
1) Influence posters' behaviour (e.g. if you get downvoted when writing in a certain way you're likely to change)
2) Inform readers which posts and comments to read
However, it does not perform these tasks very efficiently, the reason being that it is so very unclear what we are voting on. People apply wildly different criteria. For instance, I would guess that some have a much lower threshold for throwing a downvote than others. Also, some primarily reward people who write posts containing objective information (as pointed out above), whereas others also reward other sorts of posts.
As someone pointed out somewere, there is also a bandwagon effect when it comes to voting, so that posts/comments with upvotes/downvotes are more likely to continue to be upvoted/downvoted. This means that a certain post which a lot of people would actually find interesting can get downvoted because of bad luck: the first voter uses non-standard criteria and his vote then influences subsequent voters.
All this means that both posters and readers can't know exactly why it is that a certain post has got a certain amount of Karma. As a result, the present Karma system does not fulfil either task 1) or task 2) adequately. If you don't know why a certain post got a certain amount of Karma, how can you know how to change your writing, and how can you decide whether to read it or not?
Of course, the comments give both readers and posters a better picture of what people think of the post, but saying this is a bit beside the point. If it doesn't matter that the Karma system is less than satisfactory because you can read the comments, then why have the Karma system after all?
The main advantage of the present Karma system is its simplicity. It could be argued that more complex system would be too complicated for people to comprehend, etc. That is perhaps an argument that would be viable at Reddit and similar sites, but surely a site claiming to be "rationalist" should be able to assume that it's members can handle more complex systems.
Exactly how such a system is to be devised is an important question which should be discussed (suggestions are welcome) but I'll stop here for now.
Follow-up to: What have you recently tried, and failed at?
Related-to: Challenging the Difficult Sequence
ialdabaoth's post about blockdownvoting and its threads have prompted me to keep an eye on controversial topics and community norms on LessWrong. I noticed some things.
I was motivated: My own postings are also sometimes controversial. I know beforehand which might be (this one possibly). Why do I post them nonetheless? Do I want to wreak havoc? Or do I want to foster productive discussion of unresolved but polarized questions? Or do I want to call in question some point the community may have a blind spot on or possibly has taken something for granted too early.
Of course I see postings that provide objective information. These are almost never downvoted. Some members specialize in these. "Write a lukeprog-style post on X" is an appeal to invest time to provide a benefit (information) for the community. No problem here. Neither for a large body of 'typical' LW posts.
But some postings which I associate with newbies or aspiring rationalists (me included) which are sometimes personal, sometime objective often get a share of downvotes because they don't match some standards or norms. I mostly just don't vote these. I upvote them if I recognize that the poster has made a genuine effort I want to honor.
But progress is made by the discussion of controversial topics, where a consensus or synthesis has not (yet) been reached. Agreed - there are topics that are inherently ambiguous because different people have different values (and I don't mean politics which is abuse of topics for us-them-games). These topics can accumulate a sizeable share of downvotes. But even on these topics agreement should be possible at least on the meta-level of acceptance of the existence of different values. It is not necessary to downvote just because you have another position on this topic than taken or implied by the poster.
Beside these direct on-track controversial topics which are mostly civil with regard to voting (except possibly if a strong stance is taken by some party) we also have another kind of post - or often threads. These are posts and (sub) threads about topics like religion, recreation, politics, status, real life pragmatism, relationships, dealing with newbies and trolls (which actually is a range and precise placement is difficult initially). What is the reason for these seemingly low quality posts (measured by karma)? What keeps those posting these at LessWrong? Who are they?
I think some amount of these topics are a necessary part of a healthy community and somebody has to tend to them. Some are more inclined to do so. Maybe these are housekeeping gnomes who do not really get the reward for their work - as downvoting these topics (to limit them) cannot be differentiated from the need to handle them somehow. If you depreciate these posters you depreciate those topics. Do you want to reduce this area of LW topics which connects LW to real life and help LW to keep alive?
One can wonder why the karma mechanism hasn't driven those posters and the topics away already. As always what gets measured gets optimized. In this case the karma mechanism ensures that no <0 karma poster remains. But as long as you consistently achieve > 50% positive you can stay. This suggests that we should see long-term members at all levels between 50% to 100%. Maybe someone with access to the database could provide a histogram of users by positive percentage. Do we have (long-term) members with near 50% karma?
It can be that there are some social processes at work which reinforce downvoting near 50% (thus skewing the distribution) possibly by those who see karma as a proxy for status and further push those near 50% away (though from a status perspective this in contra-productive because this not only 'punishes' them to stay below but actually 'deletes' them thus letting the punishers sink relatively).
So obviously even long term members don't 'achieve' 99%. And this doesn't appear to be the goal. Taking Eliezer Yudkowsky as a role model we see a high karma (I'm surprised how he managed to average 100 karma per day!) and a positive rate of 94% which seems a lot. But if you look over his posts you find a surprising number of controversial posts (e.g. the recent April Fools' Day Confession).
I read this to mean that posting controversial topics is encouraged - if it doesn't get our of hand or into Main.
I read this as an example to go forward and work hard controversy (at the risk of failure). This is in the spirit of What have you recently tried, and failed at? and all the posts in the Challenging the Difficult Sequence. You can only learn from this. Hey. Loosing karma is not the end of the world (only if it falls below 0).
Remember the next time when you see someone with a 500 karma but 60% positive it means 1500 upvotes (and 2500 total) and likely contributions that actually advanced something rather than 'only' disseminating information. And they follow the role models too.
And if you are a low positive poster than take consolation from the absolute votes you got.