The Wisdom of Crowds by James Surowiecki
The title of the book The Wisdom of Crowds is interesting enough for you to pick up the book. And try to get insights into the collective wisdom of crowds. The tagline says ‘Why the many are smarter than the few’. You immediately think you are going to get the answers to questions like:
- Are Crowds wiser than individuals? If yes, how and why?
- Are they always wiser or under certain circumstances?
- Is there a theory behind crowds being wiser than individually smart people?
But unfortunately, those questions hardly get addressed.
You get interesting examples and case studies of times when crowd’s wisdom has surpassed individual wisdom. Reminds me of an old joke where a thief in court when presented with 2 witnesses who have seen him stealing says he can produce millions of people who have not seen him stealing. Some instances where seemingly experts failed but crowds were right do not make a theory. Even the examples mentioned are not analyzed properly to find out why it worked in those circumstances. Most of the times it seems a sheer coincidence. Like when the stock market punished one company out of the four responsible for a failed space shuttle. It seems the crowds pulled down stocks of one company before the experts could analyze which company was responsible.
Now no one in the crowd knew why they were doing it. It just happened, probably because of herd mentality. It may also be possible that since the share price of one company went down considerably, the experts took it as a data point to figure out who should be blamed. There is no rationale behind or co-relation between, why the crowds punished one company more than the others. And why month’s later experts found out that it was the same company that was responsible for the failure. Now crowds obviously are not rocket scientists.
There is an example of crowds guessing the weight of an Ox better than most people guessed. Now how do we justify this as the collective wisdom of crowds? The book seems like a collection of incidents where the experts probably failed. And hence the wisdom was attributed to general public or crowds. There are examples of traffic movements, how drivers adjust their driving to the rest of the drivers and traffic around them. Is this collective wisdom or is it learning to continuously adjust to the world around you? I always thought that traffic movement is nothing but a human-sized version of Brownian motion, where everyone just keeps moving in different unpredictable paths.
There are a few rules that the author tries to put together for defining The Wisdom of Crowds. But most of them are not justified by the book. Like most such books, the author picks up a theory and tries to justify the theory by picking up some real-life examples. The game theory seems to be a favorite one in last few years. And you can find many situations where the theory has been applied unconsciously.
The Wisdom of Crowds is a light read, with a collection of interesting to read examples, as long as you are not looking for a real value-add to your intellect.