300 of 329 people found the following review helpful
on June 14, 2004
In 1906, Francis Galton, known for his work on statistics and heredity, came across a weight-judging contest at the West of England Fat Stock and Poultry Exhibition. This encounter was to challenge the foundations of his life's study.
An ox was on display and for six-pence fair-goers could buy a stamped and numbered ticket, fill in their names and their guesses of the animal's weight after it had been slaughtered and dressed. The best guess received a prize.
Eight hundred people tried their luck. They were diverse. Many had no knowledge of livestock; others were butchers and farmers. In Galton's mind this was a perfect analogy for democracy. He wanted to prove the average voter was capable of very little. Yet to his surprise, when he averaged the guesses, the total came to 1197 pounds. After the ox had been slaughtered, it weighted 1198.
James Surowiecki takes Galton's counterintuitive notion and explores its ramification for business, government, science and the economy. It is a book about the world as it is. At the same time, it is a book about the world as it might be. Most of us believe that valuable nuggets of knowledge are concentrated in few minds. We believe the solution to our complex problems lies in finding the right person. When all we have to do, Surowiecki demonstrates over and over, is ask the gathered crowd.
The well-written book is divided into two parts. The first deals with theory; the second offers case studies. Believe it or not, I found it to be a page-turner. The author has that precious ability to render the complex in simple, understandable and interesting prose.
I have long been an admirer of H. L. Mencken who once wrote, "No one is this world, so far as I know, has ever lost money by underestimating the intelligence of the great masses of the plain people."
By the time I finished this book, I believed Mencken was wrong.
426 of 474 people found the following review helpful
on June 2, 2004
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 is, essentially, a thoroughly accessible and readable tome on applied behavioral economics and game theory.
I know that doesn't sound too exciting, but this actually is a fascinating book that is something of a page turner if you have even the most vestigial interest in the topic.
The premise isn't new-those who are denizens of Wall Street and know Robert Prechter's oft cited work with Elliott Wave Theory will know something of the underlying premises of the book. However, Surowiecki takes this notion and moves well beyond the confined world if inventing (though he covers that as well) to apply the principles he delineates to life in general-behavior in traffic, tracking and responding to disease, navigating the internet and so on.
The strength of the boom is Surowiecki's ability to render the underpinnings of his theoretical paradigm in easily understandable terms and examples. Additionally, the book features an excellent opening that provides a wonderful foundation as regards applied behavioral economics and game theory in general.
On the other hand, Surowiecki tends to play both sides of the street. He uses his "expert" position on the subject to configure his arguments and analysis to tilt the weight of evidence behind his theory in many cases. In other words, his familiarity with where he wants this to go influences his choices of examples. Moreover, he relies on too few examples in too many cases. For example, the world of wall Street should have provided a wealth of examples as to the validity-and the errors-inherent in his theory. His choices seem to be crafted to provide maximum support while eliminating any element of contraindication whatsoever.
So, in the end, despite the fact that Surowiecki has written a wonderfully readable book, and posited some fascinating theoretical axioms, the book feels a bit to tilted to be thoroughly honest with the subject matter in an applied arena. Surowiecki gives us much food for thought but also leaves us with reasons to doubt somewhat his objectivity and intellectual honesty. That fact detracts frm the value of the book, and that's a shame.
62 of 65 people found the following review helpful
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.
203 of 235 people found the following review helpful
on June 12, 2004
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.
27 of 29 people found the following review helpful
on December 14, 2004
Surowiecki(S)presents what is essentially a stochastic view of the wisdom of group decision making that relies implicitly on problems which are short run in nature, fixed, stationary,static,invariant,linear or where change is stable,slow,and imperceptible,like a baby growing up over time.The law of large numbers is applicable and leads essentially to a normal probability distribution as errors above and below the mean cancel each other out.All of S's examples of the superiority of crowd estimates or guesses over those of experts,like the Galton ox weighing contest,finding the Scorpion submarine,estimating the number of jelly beans in a jar,guessing a room's temperature,horse racing,sports betting,etc.,require a fixed ,unmoving target.What happens to the wisdom of the crowds when they are faced with dynamic,nonlinear,unstable and destabilizing problems such as estimating the amount,scale, or even the probability of technological change,advance,and innovation over time?How good are the guesses of the crowd about changes in consumer preferences or new types of consumer goods?How about the wisdom of crowds in decisions about war,ozone depletion,climate change,green house gases,deforestation or air pollution?How about the wisdom of crowds in the trials of Socrates and Jesus? S ignores the wisdom of John Maynard Keynes,Benoit Mandelbrot,Joseph Schumpeter and Charles P.Kindleberger ,who realized that crowd behavior in financial,stock,commodity,futures and money markets is very often based on a short run,short sighted view(pennywise,but poundfoolish)that leads to panics,manias,and crashes.S needs to supplement the present book with another book ,titled"The Stupidity of Crowds".While it is sometimes true that two heads are better than one,it is also true sometimes that there are too many cooks in the kitchen.
49 of 56 people found the following review helpful
on March 23, 2009
This "book" doesn't prove it's premise. The weight of the ox, proves nothing. Why does he even bring it up? The candy jar, as soon as the crowd is given a bit of information, they get it completely wrong. So were they smart or not? And what does it matter? Could he not find relevant real life examples?
Historical and current examples of crowd madness are disregarded completely. The only readable and informative part of the book is the story of the NASA Space Shuttle, and how the complete failure of crowd thought lead to the very sad consequences. Actually Surowiecki gives in this book more examples of failure of group thought than positives even when desperately and selectively trying the opposite, and the positives are mostly laughable and irrelevant like the ox or controversial or possibly random chance from noise (tell us about all those cases when a boat/submarine was not found!).
He mostly repeats the assertion that he has clearly shown it to be so, or that we know it to be so that groups are oh so wise, but the data, the arguments they are not there.
It's confirmation bias taken to the extreme, intellectual dishonesty, very thin in any actually relevant information.
Where would the world be without Socrates, Aristotle, Newton, James Clerk Maxwell and others? Tell me. The sort of people he tries to downplay.
Le Bon's 1895 work on crowds (that Surowiecki tries to discredit) became a sort of prophecy of the 20th century. Mussolini is said to have read it every night. Hitler directly copied large parts of it into his Meinkampf. Le Bon tried to warn us about crowds, and he was proven to be right in a very concrete manner.
Surowiecki touches none of this, while being aware of it. This is dishonesty. You look at the societies on this planet. The more we value the individual achievement, individual freedom and the less there is group thougt, group pressure, you know those things that go together with crowds, the better off the society is generally.
In the end Surowiecki manages to put together the thought structure, that informed crowds, with specific expertise, diverse in opinion, giving individuals their say, co-operative, co-ordinated, listening to each other can produce "miracles". And I agree. Finding the cause of Sars so quickly is an example. And something to keep in mind.
But that is something entirely different from "wisdom of crowds". That is wisdom of co-operating highly skilled experts.
The fact that this book has been a sort of best seller, and has recieved so many 5 star reviews praising it's non-existant content, makes me go back to Mackay, Shermer, Le Bon...
I have never burnt a book in my life, but Surowiecki is seriously tempting me. I utterly hated this book and what it represents. Strong words, but saying it as it is.
25 of 27 people found the following review helpful
on October 14, 2006
Intrigued by the relative frequency of citation of this book in the new "web 2.0" universe, I was disappointed to find only a sequence of factoids on social experiments and little in the way of analysis. From the very beginning of the book the reader is invited to agree with the central thesis (that a crowd of independent individuals does better than a smaller elite group) and it very much feels like evidence is carefully selected to reinforce the author's argument. The book could have been twice as thin without losing much of its substance. I would qualify it as a light business read, entertaining but not quite convincing if you're not part of the choir.
31 of 35 people found the following review helpful
on June 4, 2004
The book is interesting, well written, and covers much of the recent research on collective or group decision making, but it has glaring oversights. The author is most at home in economics where the book does the best at reporting research findings, but his references to social conformity are very limited despite that being at the core of the book. He completely overlooks research on the nonconscious dimension of decision making and implicit or automatic learning (at the basis of stereotypes and racial prejudice), and he neglects negative findings that groups may not outperform the best individuals in problem solving. From a reading of the book alone, one would never expect to see something like racial discrimination, the Holocaust, or the Taliban emerge in a society. Although the title refers to "societies and nations", the book only concerns the United States. Toward the end of the book, his accounts of the academic review process, the progress of science, and voting theories are naive at best. The book has no index.
22 of 24 people found the following review helpful
on June 23, 2005
I expected to hate this book but it confounded my expectations. It is a very interesting, provocative and stimulating. Even in the sections that I disagreed with there was enough interesting material to hold my attention, it was refreshing to need to question one's assumptions and to think about the points being made.
What is the Wisdom of Crowds? The book defines it rather loosely suggesting that groups make better decisions if certain conditions are met. The conditions are: diversity (to ensure that different information is used to make the decision), independence and (a certain type of) decentralisation (to ensure that no one person is dictating the decision and that people are using their own private information) together with a way of summarising the different opinions into a collective view.
This loose definition allows the book to address a huge range of topics. It does not build a coherent case attempting to support and justify the central thesis. Instead it relies on a more anecdotal approach - examining situations where crowds can be wiser and situations where they fail to be wise - it is a biography of an idea rather than a manifesto.
To provide some structure three different types of problem are identified: cognition problems, co-ordination problems and co-operation problems. However, even within these broad areas large and rather diverse sets of problems are examined; to help in the analysis a wide range to techniques are utilised including psychology, statistics and game theory. The book makes great play of the ideas being counterintuitive and surprising; in some of the examples this is true, in others it seems to be seriously stretching the point. For example, the story about finding the lost submarine is surprising, as is the speed with which the market identified the company at fault for the Space Shuttle disaster. Less surprising are the examples which boil down to applied game theory, statistics or the fundamental nature of markets.
The most important (practical) problem with the thesis is that the conditions required for the wisdom of crowds to apply are very difficult to meet. The book recognises this and devotes considerable space to situations where crowds fail to be wise because of this. For me, these are probably the best sections of the book. It is very clear that the wisdom of crowds does not mean management by committee (as committees almost always fail to meet the necessary conditions). It is also very sharp on the culture of the 'expert' and is very clear about the need for dissent and the importance of (intellectual) diversity. The section on NASA is chilling and excellent.
In spite of the issues this is still a fascinating book. There is a huge range of stories and examples about how the wisdom of crowds can work and how it can fail spectacularly. I found it a thoroughly engaging and interesting book.
17 of 18 people found the following review helpful
on February 22, 2005
It is often believed that a good remedy against the madness of groups is to give much power to extraordinary individuals. People who are aware that they cannot fully understand complex problems often believe that there are other people, more intelligent, knowledgeable and strong than they are, who do posses the answers to these problems. They are quite prepared to follow and depend on these leaders, people who do seem and or pretend to know the answers to pressing complex problems. But is this wise? No!
James Surowiecki fights the idea that group decisions can only be mad and lead to misery and that extraordinary individuals should therefore solve pressing problems. He says that the potential of groups is underestimated and the value of expertise overestimed:
"... the more power you give a single individual in the face of complexity and uncertainty, the more likely it is that bad decisions will get made".
If the circumstances are right groups can behave highly intelligent, often more intelligent than even the most intelligent individuals. Under those circumstances, groups are better at solving problems, making predictions, assessing situations accurately and deciding wisely.
The right circumstances for collective wisdom are:
1. Diversity: when arguments, views and opinions do not differ from each other they don't add anything to one another. Diversity guarantees that multiple perspectives are brought into the decision-making process and that a broader range of information is included.
2. Independence: when individual group members are strongly influenced by arguments, information, experiences and onions of others this will suppress the diversity of input into the decision-making process. This increases the likelihood of groupthink.
3. Decentralization: the chance to achieve collective wisdom is greatest when individuals get a chance to bring their own information and experience into the process. Surowiecki calls this `local experience'.
4. Aggregation: a mechanism and a process to come to an integration of the different views and opinions. It is very important to prevent there will be too much interaction before each other to strongly so that the pressure to conform may get too strong and any deviating opinions will be suppressed.
An intelligent group does not ask of its individual members to conform to the dominant view. Instead it has created a mechanism that resembles a democracy or a market. Individual group members get the opportunity to bring in their own information and opinions and are not forced to change their views. Their independence is explicitly protected.
I found this book very interesting and accessible.