Thinking about a position I have previously defended, that collective intelligence may exert a downward pressure on the intelligence of its constituent parts, it seems it should have some implications for the selection pressure on markets with respect to the complexity of the market agents that compose them. If collective intelligence improves when its constituent parts are ‘dumber’, then an economic system, which processes information through market transactions, will function better when market actors are dumber. More complex actors’ preferences will be less well revealed by their actions, and so the aggregated information will be noisier.
This is true even given that simpler economic actors are more easily manipulable. Manipulability of actors means that actors will interpret signals in predictable ways, and react to them in predictable ways. Manipulability, then, is just a form of very effective communication, which can be abused by actors who can recognize and take advantage of it, but which also makes market information less noisy.
But there seems to be some evidence against this. IQs have improved over time, and even more so in developed countries with relatively open economies. This is weak evidence, since there has been less and less competition between different markets composed of different actors as a global market has emerged and its interconnections proliferated, and changes in nutrition, health, and the rates of violence have positive impacts that are likely to swamp any downward pressure from the market. Furthermore, the revelation of preferences is influenced more by shared worldview and equivalent levels of intelligence: for the purposes of making interactions more meaningful, it will often matter more that individuals think the same way, than it matters exactly how they think.
Other opposing evidence comes from other social-but-not-eusocial animals, such as wolves. Many social animals appear to be smarter as individuals than similar animals that do not interact socially. Wolves, flocking birds, dolphins are smarter than equivalently sized big cats, lone birds, and sharks, for example. This again may have more to do with access to nutrients, but at least it shows that whatever pressure exists cannot be very large.
This speculation is necessarily incomplete without actually looking at who is rewarded by the market, and what enterprises get selected for and copied and perpetuated. In that sense, it says more about the metaphor of market-as-brain than about the market itself. It also may count as a strike against the original assertion about how collective intelligence and individual intelligence interact.