Saturday, March 17, 2007

The Wisdom of Crowds: James Surowiecki

“Many hands make light work” is old hat. James Surowiecki refreshes it, with two significant variations – one, many people working on the same idea/problem can collectively think better; two, these people are not working together – they are working in parallel.

Tommy Lee Jones’s character said in Men in Black: “A person is smart. People are dumb.” I wrote The Wisdom of Crowds in part to explain why this idea is wrong.

And James Surowiecki does that persuasively, leaning on subjects as diverse as politics, defense, space exploration, business, information technology, sport, and entertainment, among others. He argues that collective wisdom almost always outweighs the wisdom of the few – even if the few are experts in that field. The concept, however, is without its detractors and exceptions, and Surowiecki is well conscious of that.

Of the myriad examples quoted in the book, my favorite one is the (unfortunately) aborted Policy Analysis Market. It truly sounds like democracy in action, where we make policy decisions democratically instead of electing someone who will do so on our behalf.

The focus on examples, both historical and contemporary, makes sure that you don’t need to be an economist or a sociologist to understand the book. And that perhaps accounts for the success of The Wisdom of Crowds and other books of its ilk, like Malcolm Gladwell’s The Tipping Point and Tim Harford’s The Undercover Economist.

Today’s era of web 2.0 and the whole trend towards collaboration is clearly based on the wisdom of crowds – we better be right.

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