14 of 14 people found the following review helpful
5.0 out of 5 stars Relevant and surprising
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...
Published on July 10 2004 by Matthew Gleick
6 of 7 people found the following review helpful
2.0 out of 5 stars Interesting but a bit disappointing
I wanted to read this book because I have a personal interest in Prediction Markets and have read a couple of Surowiecki's columns in the New Yorker and Wired magazines on this subject. My expectation was that he would expand on his columns and get into details on how Prediction Markets can be used in a corporate or public decision making process. Unfortunately, I'm...
Published on June 28 2004
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14 of 14 people found the following review helpful
5.0 out of 5 stars Relevant and surprising,
This review is from: The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations (Hardcover)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.
6 of 7 people found the following review helpful
2.0 out of 5 stars Interesting but a bit disappointing,
By A Customer
This review is from: The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations (Hardcover)I wanted to read this book because I have a personal interest in Prediction Markets and have read a couple of Surowiecki's columns in the New Yorker and Wired magazines on this subject. My expectation was that he would expand on his columns and get into details on how Prediction Markets can be used in a corporate or public decision making process. Unfortunately, I'm going to have to agree with the more negative reviews already posted. While the first 50 pages do a good job of explaining these markets and setting the table for a detailed examination, that discussion never happens. Instead, the majority of the book is a collection of studies and anecdotes about the behavior of crowds - most of which I have some recollection of from Psychology classes taken long ago. The second half of the book focuses on what he calls Case Studies, but what I would call simply stories. There's a story about corruption of Italian soccer judges, Richard Grasso's compensation, a review of crowd theory in the movies, the retail fashion industry, the Columbia disaster, etc. Fairly interesting, but hardly instructive. My amateurish explanation for all this is that while Surowiecki may be a talented columnist, but when challenged when writing a full length book, he has neither the practical experience nor educational background to give any great insight on how to leverage the wisdom of crowds to tackle the issues of the day.
5 of 6 people found the following review helpful
1.0 out of 5 stars Disappointingly, an unconvincing intellectual muddle,
This review is from: The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations (Hardcover)Upon hearing about a book on "the wisdom of crowds", I expected it to answer three qeustions: Are crowds wise?, When are they wise?, and Why are they wise? Sadly, this book answers none of them.
Are crowds wise? Surowiecki fills his pages with unconvincing anecdotes. He has only a handful of real studies and he buries them randomly throughout the book. Worse, Surowiecki sometimes describes a study that would be easy to conduct, but instead of doing it he simply tells us what he expects the results would be. And despite the book's constant championing of dissent, Surowiecki offers no evidence that cuts against his argument. Instead, every failure of a crowd simply helps prove his thesis, since he claims it failed because it violated one of his vaugely-stated rules.
When are crowds wise? Surowiecki offers only untested speculation. He claims they need "diversity, independence, and a particular kind of decentralization" (oddly, by decentralization Surowiecki appears to mean aggregation). Surowiecki never defines any of these particularly clearly but instead gives lots of examples. This makes them useless as predictors of a crowd's intelligence which is probably why Surowiecki makes no attempt to test them.
Why are crowds wise? Surowiecki doesn't even bother to answer this one, even though it's the first half of the books subtitle. He considers the question briefly on page 10, only to spout some empty sayings (crowds are "information minus error") and wonder in amazement ("who knew ... we can collectively make so much sense") before finally concluding "You could say it's as if we've been programmed to be collectively smart."
Perhaps noticing these weaknesses, Surowiecki gets all this out of the way in the first 40% of the book. The remainder is dedicated to larger collections of anecdotes Surowiecki likens to case studies. But even they disappoint. While Surowiecki has lots of stories, few are particularly enlightening or even memorable. Surowiecki does little analysis of the stories and does not draw out larger lessons. He assumes he is right and only stops to look down upon those who disagree.
I'm especially disappointed since I expected the book to be good. I love Surowiecki's weekly column in the _New Yorker_ and I suspect he is right about a lot. But instead of making a convincing argument, Surowiecki just stirs together anecdotes from his columns. The result, not suprisingly, is an intellectual muddle.
One thing the book does teach (although not clearly) is the wisdom of _dissent_. You can ensure dissent by collecting a large group and keeping the members from talking to each other (since people are usually smart but afraid of going against the grain), by ensuring some members of the group vocally disagree (since they will force the others to better justify their positions), or by forcing them to try to justify all sides (since that will keep them from prejudging the question).
All of which makes it ironic that Surowiecki's book fails because of a lack of dissent. Nothing goes against the grain, he doesn't justify his positions, and he has clearly prejudged the question. It would seem he needs a crowd to make him wise.
5.0 out of 5 stars Engaging,
By A Customer
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.
5.0 out of 5 stars Refreshingly optimistic,
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.
5.0 out of 5 stars Essential reading,
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.
5.0 out of 5 stars PEARLS,
4.0 out of 5 stars Why The Collective Wisdom of Crowds is Right (Sometimes),
For example, the scientist Galton observed, at a fair, that a group of people who guessed the weight of an ox were, when averaged, only 1 pound off from the actual weight of the ox.
Another example are prediction markets like the Foresight Exchange on the Internet. There was another prediction market, that, as time went on in 2000, had Bush defeating Gore; this prediction market turned out to be right, and some political scientists turned out to be incorrect.
In order for the crowd to give a pretty good opinion, there are four critieria that must be satified, according to the author: 1. diversity of opinion; 2. independence of members from one another; 3. decentraliation; 4. a good method for aggregating opinions.
But here I disagree--even with these four conditions fulfilled, the crowd does not always give the correct view. For example, I am a member of Internet discussion groups. I would say that all the four conditions are pretty well satisfied, but I have hardly seen a consensus develop in the first place--and even if it did, that would not make it true.
Going back to the above examples, what made the people at the fair to nearly guess correctly the weight of the ox, or for a prediction market to correctly predict the winner of the 2000 US Presidential election, is, in a word, incentives. The participants in those cases have a stake in being correct--they can win an ox, or win some sort of status in the Internet prediction market.
I think that it is a fair generalization to make that participants, when given incentives to be correct, do tend to be correct. This is interesting.
I wonder if this "market" epistemology can be further expanded--not just in correctly predicting the weight of an ox or a Presidential election, but to determine if a certain theory is true.
By no means do I hold that a theory is true by the number of its adherents. What I am getting at is something like this: Our colleges teach economics and medicine. If these colleges were teaching seriously wrong theories of economics and medicine, then their graduates would go out into the world and fail, and even harm others. So there is a critical feedback loop: there is an incentive for good economic and medical theories to be developed in the colleges. This may also explain why we see relatively little of the pernicious influence of "political correctness" in fields like economics and medicine, as compared to subjects in the humanities.
So the trick then is create structures where the participants have incentives to be right--in all areas.
5.0 out of 5 stars Excellent,
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."
5.0 out of 5 stars The masses can be much smarter than we give it credit.,
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!
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The Wisdom of Crowds by James Surowiecki (Paperback - Aug. 16 2005)
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