on July 10, 2004
Although the subtitle to THE WISDOM OF CROWDS is an awkward mouthful, it is at least accurate: the book does an exceptional job of illuminating a remarkably wide range of material from politics, everyday life, and the business world. Surowiecki's not offering a grand unified theory of everything, but in the course of investigating how and when groups and crowds are and are not intelligent, he takes you on an exhilarating ride. You can't go more than a couple of pages without coming across some interesting factual tidbit or clever anecdote. Just a short list of stuff Surowiecki writes about includes: crowds on city sidewalks, Navy men trying to find a lost submarine, the Nielsen ratings, Google, scientists trying to find the SARS virus, the stock market, game-show audiences, fashion stores, and the C.I.A. Thankfully, though, he understands that just stringing together stories isn't enough. Instead, he fits his examples into a strong argument that holds the book together. You can get a lot out of this book just by dipping into individual chapters, but reading it from beginning to end is a powerful experience.
One of the things about the book that hasn't been much remarked on is the light it sheds on the flaws in the way the U.S. intelligence community -- and, I would argue, the Bush administration -- approaches the problem of forecasting the future and making good decisions. The book's main subject is the wisdom of crowds, but Surowiecki spends a lot of time on how groups go wrong, and his discussion of how groups make bad decisions seems to me completely relevant to our current problems. When Surowiecki delves into groupthink, into the pressure that's exerted on lower-level employees to conform, and the perils of too little diversity of opinion, he's making a broader point about what good decisions require. But in the process, he clarified for me just why the current administration did such a bad job of figuring out whether Iraq had weapons of mass destruction and of planning for the postwar period. I was surprised, but it turns out this book has a lot to say about the state we're in right now.
on July 3, 2004
It seems naive to mention it, but one of the things I liked best about Surowiecki's take on the intelligence of groups is how optimistic it is. Most of what we hear about crowds and democracy and the potential of average people offers a dismal picture. But I came away from this book in a hopeful mood, and infused with a sense of real possibility. Surowiecki is convincing on the idea that the intelligence of Google, or bettors at the race track, or the audience in "Who Wants to Be a Millionaire?" aren't peculiar anomalies, but are actually connected by the fact that they're tapping into collective wisdom. This makes me think that if we can figure out a way how to use group intelligence in a wider way -- inside companies, governments, whatever -- the decisions society as a whole makes can be improved.
Stylistically, the book is a delight. The sentences are crisp, and the stories are well-told. Occasionally, Surowiecki makes his ideas too involved and ends up in a digression. But I forgave this because it felt like the result of someone who thinks everything is interesting and wants the reader to feel the same. Wonderful stuff.
on June 28, 2004
This is one of the most entertaining and intellectually engaging books I've come across in a long while. Surowiecki has a gift for making complex ideas accessible, and he has a wonderful eye for the telling anecdote. His thesis about the intelligence of groups made up of diverse, independent decision-makers seems initially counterintuitive, but by the end of the book it seems almost obvious, because of all the evidence Surowiecki piles up on its behalf.
The book does cover a lot of ground in not very much space, and the pace of the argument is at times too fast. But the throughline of the argument is almost always clear, and the stories Surowiecki tells are often memorable. The chapter on NASA's mismanagement of the Columbia mission and the tale of how a man named John Craven relied on collective wisdom to find a lost submarine are especially striking.
This is one of those books that I expect people will still be talking about and referring to years or even decades from now. It's also a book that I hope will have a concrete impact on the way that people make decisions, since the implications of Surowiecki's argument are radical in the best way.
on June 13, 2004
I'm a big fan of James Surowiecki's "Financial Page" column in The New Yorker. He's consistently able to come up with unusual takes on seemingly familiar topics, and he has a great knack for making business stories compelling and entertaining as well as understandable. But because it's only a page long, I sometimes come away from the column wanting more, and I always wondered how Surowiecki would do if he was able to develop his ideas and arguments more fully. Luckily, "The Wisdom of Crowds" lives up to all my expectations. It's wonderfully readable, full of terrific stories, funny, and its basic argument -- that groups, under certain conditions, can make better decisions than even the smartest individuals -- is counterintuitive without being willfully contrarian.
The roots of the argument obviously stem from the way markets work -- buyers and sellers find each other and reach efficient outcomes without anyone being in charge, while the stock market (at least some of the time) does as good a job as possible of setting prices. But what I really like is the way Surowiecki extends this argument way beyond business and markets, showing how collective wisdom can be seen (and can potentially be used) in a host of other situations, including the racetrack, on the Internet, and on city streets. He also does a good job of drawing out the possible implications of this for everything from the U.S. intelligence community to the way companies are run.
This is definitely a big-idea book, but the author is cautious in laying out his evidence, and is careful to show that groups, even if they're potentially wise, are often stupid and dangerous. The chapter on small groups in particular, which focuses on NASA's mismanagement of the Columbia mission, is powerful stuff, and useful to anyone interested in how to run a meeting well (or badly, for that matter). The least satisfying part of the book is the chapter on democracy, where Surowiecki shies away from pushing his conclusion to its logical end. But on the whole, this is just a wonderful book, elegant and enlightening.
If you're interested in this book, it's also worth checking out Paul Seabright's "The Company of Strangers" and Robert Wright's "Nonzero."
on June 13, 2004
This is a very interesting book that covers many complicated subjects related to group decisions vs. individual decisions. It touches on Game theory, behavioral economics, and Decision theory. However, it is not a treaty in any of these areas. The author keeps his observations at a 10,000 feet high level. So, the book instead of being a dry tome for mathematicians is actually a very entertaining book for laypersons.
The author touches on the many aspects where crowds provide superior judgments than individuals alone. Our civilization quietly depends on many such favorable situations, These include the capital markets in general, and the stock market in particular. But, it also includes Nielsen ratings, polls, voting records. Most of the time, in all these circumstances the many give a better assessment, valuation, or judgment than the individual. The author is quick to point out that this is not always the case. Markets experience stock market bubbles where the collective judgment becomes euphoric. However, year in year out and over decades, the stock market (representing the many) beats the majority of the investment pros hands down.
The author is fascinated by the emergence of "decision markets," including the Iowa Electronic Markets for betting on Presidential election outcome that has proven more accurate than the polls. Another such example is the tradesports website that does the same, including betting on sport events, media events, international politics events. These are perfect examples where the many gather their judgment through trading values thanks to the Internet. In general, it is uncanny how accurate these decision markets are. There is really something to the saying "put your money where your mouth is."
In a nutshell, this is a very interesting and thought provoking book. It promotes democratic and decentralized decision making within corporations and government institutions. This makes good sense. The CEO or the President just can't hold that much information in their individual brains anyway. Instead, why not rely a lot more extensively on the collective wisdom generated by the aggregated sum of our own individual brilliance. Why not!
on June 13, 2004
I decided to read this book after reading an essay that Surowiecki wrote in Wired, arguing that companies and organizations in general put too much trust in the people at the very top and don't rely enough on the collective intelligence of their employees. This is exactly how things are run at the agency where I work. Information doesn't flow the way it should, decisions are made by fiat, and people are more interested in protecting their little fiefdoms than in solving problems intelligently. I was intrigued by the article's argument, but I wanted more detail.
After reading the whole book, I'm convinced that the way we do things makes our decisions worse, not better. THE WISDOM OF CROWDS mounts a great case for the virtues of letting more people have a say in decisions, and it does so in a remarkably entertaining way. I thought there was a nice balance between anecdote and analysis here, with the stories -- including a great one about finding a lost submarine, and a detailed analysis of the Columbia disaster -- really illuminating Surowiecki's arguments. Because Surowiecki is challenging the idea that only a few select people should have influence over important decisions, it may be hard for his ideas to have an impact in the corporate and government world. But I'm convinced that this should change for good the way organizations make decisions.
on May 29, 2004
This is a great, eye-opening book by one of America's best columnists. Anyone who's curious about the way things work should read it. The thesis is a provocative one, but it's by no means simplistic, as some reviews here have suggested: essentially Surowiecki argues that under the right circumstances a "crowd" (defined as a large group of independent actors) is "smarter" than the experts within it. It's a surprising idea, and one that goes against the grain-which is precisely why the book is engaging. In no sense is Surowiecki, who ranges widely acroos topics, arguing that crowds or mobs are always smart, or that the best American Idol contestant will win every time. Rather, he's offering an insightful (and almost eerie) series of explanations for solving or conceptualizing real-life problems: among other things, how to harness group knowledge to avert terrorism, to put an end to traffic, and to create a more efficient society. Throughout, Surowiecki is an ideal guide, companionable, curious, and comprehensible--and a step ahead of your own skeptical arching of the eyebrows. As a result this book really will alter the way you think about everyday life; and you'll want to talk about it with other people.
on May 27, 2004
Although this book is relatively short, it's packed with some terrific anecdotes and stories, and its argument is compelling. Surowiecki has a knack for making complicated ideas understandable, and he's also got an eye for the telling example.
The book's thesis -- that groups are often very smart, and even smarter than their smartest members -- seems, at least to me, surprising, but the evidence here (which ranges from game shows to Google to horsetrack betting) is convincing. I think an earlier reviewer misunderstood the argument Surowiecki's making. He's not saying simply that two heads are better than one, or that if you ask more people, you increase the chances that some individual in the group will know the right answer. The argument instead that the group's average judgment will be better than that of even the smartest person. Let everyone in a group have some say in a decision, and even if most of them don't know very much, their collective judgment will be brilliant. This isn't something we usually believe. On the contrary, we usually think a group's average judgment will be mediocre.
One of the strongest parts of this book, though, is how it shows that groups aren't always smart, and explains what's necessary (diversity and independence, most notably), for collective wisdom to emerge. A good chunk of it is devoted to detailing how groups go wrong -- including everything from the Bay of Pigs to the Columbia disaster to stock-market bubbles. This is very much a book about the real world, about what happens when people get together in groups, about the way imitation is both beneficial and dangerous, why we take cues from those around us, what it takes to make people brave enough to speak up when they have dissenting points of view. It's a realistic, but ultimately optimistic take on the way the world works.
on May 25, 2004
When confronted by a new and serious challenge, corporate managers bring in the "big guns". They call the smartest people they know. They get the advice of consultants and experts. They listen, but they reserve the right to decide alone, ignoring even highly-qualified advice if doesn't 'feel right' to them. What if the best advice was dangling right under the boss's box on the org chart?
In "The Wisdom of Crowds", James Surowiecki lays out the conditions under which a diverse group of non-experts can outperform mavens, wonks, and gurus - or the judgement of a solitary boss. He also talks about the conditions under which groups can produce disastrous results.
The life story of an idea can be a dry undertaking, but Surowiecki animates it. It is funny at times, and frequently sobering. He uses numerous examples, keeping the techspeak to a minimum - this is great journalism, not an econ text. He doesn't hype or oversell, but his reasoned enthusiasm for the subject is hard to resist. Read it and argue with your friends about it!
on July 3, 2004
Even after having read it, I'm still not sure what category I'd put THE WISDOM OF CROWDS in. It offers important insights into business, and helped me understand the way markets work. But it also has lots of fantastic and entertaining material about group psychology, and it's an interesting look at a host of questions about everyday life, ranging from the way crowds on a sidewalk move to traffic to the role of trust.
The book's real strength is its ability to take a complex question -- when are people in groups smart, and when are they foolish? -- and make it accessible and engaging, even to those of us without much background in the field. Surowiecki has a light touch with his ideas, and for me the book flew by (with the exception of a few pages about the NFL, which I had a hard time with). I feel as if I see the world now in a different way.