Review, James Surowiecki, "The Wisdom of Crowds"
[Review of The Wisdom of Crowds: Why the Many Are Smarter Than the Few And How Collective Wisdom Shapes Business, Economies, Societies and Nations by James Surowiecki (Doubleday, 297 pp.) Originally appeared in the New York Post, July 11, 2004.]
* * *
Can't recall how the National Security Adviser spells her first name? Try a Google spell-check. "Condoleezza" appears on 308,000 web pages, "Condoleeza" on 76,000, and "Condolleeza" on only 261. Sure enough, the first of the three spellings, by far the winner in page "votes", is the correct one.
Given the right task to solve, aggregate amateur opinion sometimes proves more reliable than the expert kind. In 1906 the scientist Francis Galton observed that when rural English fairgoers were invited to buy a ticket and guess how much flesh an ox would yield when slaughtered, with the best guesses winning prizes, the crowd's average guess was more accurate than that of even the most knowledgeable individual farmer. Similarly, students asked to guess the number of jelly beans in a glass jar often come remarkably close to the correct number when their guesses are averaged. Writes James Surowiecki: "under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them".
For a moment you might fear Surowiecki is going to take this little insight and start hammering away with it, One Big Theory style, until he winds up convincing himself that voters as a group choose unerringly between candidates, that a poem's popularity is a sure sign of its literary merit, that employees' time is better spent in committee meetings than in mastering their individual jobs, and so forth. Not to worry: this is a much better book than that. In fact, the author almost at once begins to explore the exceptions and limits to his initial generalization -- the many ways in which the world usually falls short of providing the "right circumstances" for crowd rationality. By the end, you see why crowds got their reputation for being messy, unpredictable and easily misled in the first place.
So much the worse for the book's somewhat grand title. But so much the better for the reader, since it gives Surowiecki, whose writings on business are a reason to read The New Yorker, free rein to roam among a wide variety of topics of his choosing. For instance: why "yes-men" are so harmful in committee deliberations (it has to do with their tendency to turn an initial error into a "cascade"); why it's so hard to beat the stock market or the sports betting line; why a key to the success of Linux is precisely that it's much less decentralized and "open" than it looks; why the silly "sweeps" system continues to dominate TV ratings; why juries, political factions or artistic coteries that start out with similar leanings can talk each other into more extreme positions than any of them took originally; why the scientists with the most original contributions to make are also those who collaborate most; what game theory can tell us about Fed interest-rate decisions; and much more. Surowiecki is quite good at explaining these topics, and they're nearly all worth learning about.
The Wisdom of Crowds is selling briskly at the stores. In this case, the crowd knows what it's doing.