"Prediction Markets" and GIGO

I've been commenting on law professor Cass Sunstein's guest-postings at Lessig's blog, regarding aggregation and "prediction markets". (for whatever good it does ...). My general view is summed up by the old quote:

"On two occasions I have been asked [by members of Parliament], ``Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?'' I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question." - Charles Babbage

But I see an underlying idea in some evangelism now, that we can put into the "machine" wrong figures, and through the program WISECROWDS, the right answers will come out.

But as the saying goes, "Garbage In, Garbage Out", and usually aggregating a bunch of wrong answers leads to a wrong answer. There are indeed some extraction procedures which can find a signal amidst noise. However, accurate information can't be created if it was never there in the first place.

I'm not the only person to point this out. Several other commentators are doing so too. There's plenty of material. But I can see that skepticism is fighting the appeal of punditry. For all the supposed wonders of interactivity, there doesn't seem to be much good in going against the hot fad.

Seth Finkelstein's Infothought blog (Wikipedia, Google, censorware, and an inside view of net-politics) - Syndicate site (subscribe, RSS)