Wisdom of Crowds (Surowiecki)

The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations
James Surowiecki, 2004
Knopf Doubleday
336 pp.
ISBN-13: 9780385721707

Summary
In this fascinating book, New Yorker business columnist James Surowiecki explores a deceptively simple idea: Large groups of people are smarter than an elite few, no matter how brilliant—better at solving problems, fostering innovation, coming to wise decisions, even predicting the future.

With boundless erudition and in delightfully clear prose, Surowiecki ranges across fields as diverse as popular culture, psychology, ant biology, behavioral economics, artificial intelligence, military history, and politics to show how this simple idea offers important lessons for how we live our lives, select our leaders, run our companies, and think about our world. (From the publisher.)

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Author Bio
• Birth—1967
• Where—Meriden, Connecticut, USA
• Education—B.A., University of North Carolina; graduate
   studies at Harvard University
• Currently—lives in Brooklyn, New York, NY

James Surowiecki is a staff writer at The New Yorker, where he writes the popular business column, “The Financial Page.” His work has appeared in a wide range of publications, including the New York Times, Wall Street Journal, Artforum, Wired, and Slate. He lives in Brooklyn, New York. (From the publisher.)

More
Surowiecki was born in Meriden, Connecticut and spent several childhood years in Mayaguez, Puerto Rico where he received a junior high school education from Southwestern Educational Society (SESO).

On May 5, 1979, he won the Scripps-Howard Regional Puerto Rico Spelling Bee championship. He is a 1984 graduate of Choate Rosemary Hall and a 1988 alumnus of the University of North Carolina at Chapel Hill, where he was a Morehead Scholar. Surowiecki pursued Ph.D. studies in American History on a Mellon Fellowship at Yale University before becoming a financial journalist. He lives in Brooklyn, New York and is married to Slate culture editor Meghan O'Rourke.

Before joining The New Yorker, he wrote “The Bottom Line” column for New York magazine and was a contributing editor at Fortune.

He got his start on the Internet when he was hired from graduate school by Motley Fool co-founder David Gardner, to be the Fool's editor-in-chief of its culture site on America Online, entitled "Rogue" (1995-6). As The Motley Fool closed that site down and focused on finance, the versatile Surowiecki made the switch over to become a finance writer, which he did over the succeeding three years, including being assigned to write the Fool's column on Slate from 1997-2000.

In 2002, Surowiecki edited an anthology, Best Business Crime Writing of the Year, a collection of articles from different business news sources that chronicle the fall from grace of various CEOs. In 2004, he published The Wisdom of Crowds, in which he argued that in some circumstances, large groups exhibit more intelligence than smaller, more elite groups, and that collective intelligence shapes business, economies, societies and nations. (From Wikipedia.)

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Book Reviews
The author has a knack for translating the most algebraic of research papers into bright expository prose.
New York Times Book Review

Surowiecki, who has fashioned a fascinating financial column in the New Yorker by using cutting-edge social science research to interpret market life, finds ample evidence to support his argument. He writes with command and flair, weaving together entertaining anecdotes from popular culture and business history and accessible summaries of arcane theoretical debates in behavioral economics, sociology and psychology. The Wisdom of Crowds is both intellectually challenging and a pleasure to read.
Eric Klinenberg - Washington Post

This book is not just revolutionary but essential reading for everyone.
Christian Science Monitor

Convincingly argues that under the right circumstances, it’s the crowd that’s wiser than even society’s smartest individuals. New Yorker business columnist Surowiecki enlivens his argument with dozens of illuminating anecdotes and case studies from business, social psychology, sports and everyday life.
Entertainment Weekly

While our culture generally trusts experts and distrusts the wisdom of the masses, New Yorker business columnist Surowiecki argues that "under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them." To support this almost counterintuitive proposition, Surowiecki explores problems involving cognition (we're all trying to identify a correct answer), coordination (we need to synchronize our individual activities with others) and cooperation (we have to act together despite our self-interest). His rubric, then, covers a range of problems, including driving in traffic, competing on TV game shows, maximizing stock market performance, voting for political candidates, navigating busy sidewalks, tracking SARS and designing Internet search engines like Google. If four basic conditions are met, a crowd's "collective intelligence" will produce better outcomes than a small group of experts, Surowiecki says, even if members of the crowd don't know all the facts or choose, individually, to act irrationally. "Wise crowds" need (1) diversity of opinion; (2) independence of members from one another; (3) decentralization; and (4) a good method for aggregating opinions. The diversity brings in different information; independence keeps people from being swayed by a single opinion leader; people's errors balance each other out; and including all opinions guarantees that the results are "smarter" than if a single expert had been in charge. Surowiecki's style is pleasantly informal, a tactical disguise for what might otherwise be rather dense material. He offers a great introduction to applied behavioral economics and game theory. While armchair social scientists (e.g., readers of The Tipping Point) will find this book interesting, college economics, math, statistics and finance students could really profit from spending time with Surowiecki.
Publishers Weekly

According to Surowiecki, the "simple but powerful truth" at the heart of his book is that "under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them." Surowiecki, a staff writer for the Financial Page of The New Yorker, analyzes the concept of collective wisdom and applies it to various areas of the social sciences, including economics and politics. The author examines three kinds of problems involved in collective wisdom: cognition, or problems with definite solutions; coordination, where members of a group figure out how to coordinate their behavior with one another; and cooperation, involving getting self-centered individuals to work together. Part 1 studies the three problems (cognition, coordination, and cooperation) and the factors it takes for the crowd to be wise (diversity, dependence, and a specific type of decentralization). Part 2 contains case studies illustrating both success and failure of collective intelligence. Surowiecki also draws upon studies and works of past theorists of collective intelligence, including Charles Mackay's landmark Extraordinary Popular Delusions and the Madness of Crowds. This work is an intriguing study of collective intelligence and how it works in contemporary society. —Lucy Heckman, St. John's Univ. Lib., Jamaica, NY
Library Journal

Multitudes are generally smarter than their smartest members, declares New Yorker writer Surowiecki. With his theory of the inherent sagacity of large groups, Surowiecki seems to differ with Scottish journalist Charles Mackay's 1841 classic, Extraordinary Popular Delusions and the Madness of Crowds, which dealt with such stupidities as the South Sea Bubble, tulipmania, odd styles of whiskers, and dueling. Our 21st-century author admits that there are impediments and constraints to the intelligence of large groups, usually problems of cognition, coordination, and cooperation. A group must have knowledge, Surowiecki states: not extensive knowledge, but rudimentary comprehension of basic fact with harmonized behavior by individual members. Finally, individuals must go beyond self-interest for the good of all. That's how capital markets and Google's algorithm work, and how science isolated the SARS virus. Lack of the basics leads to traffic jams, the dot-com crash, and the Columbia shuttle mission disaster. If crowds are inherently clever, a reader may be prompted to ask, just how smart is a flock of turkeys? Not very smart, certainly, but smarter, Surowiecki would assert, than the smartest turkey individual. A school of herring is going to be more intelligent than any single fish in it. All this may be less than encouraging to hot-stock analysts, high-profile CEOs, and others who sell their personal expertise for a high salary, but the author argues persuasively that collective wisdom works better than the intelligent fiat of any individual. His wide-ranging study links psychology and game theory, economics and management theory, social science and public policy. And it advances Mackay's report from times when, as the Scot put it, "knavery gathered a rich harvest from cupidity." Valuable insights regarding information cascades, crowd herding, cognitive collaboration, and group polarization. There is some individual, independent wisdom to be found here.
Kirkus Reviews

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Discussion Questions
Use our LitLovers Book Club Resources; they can help with discussions for any book:

• How to Discuss a Book (helpful discussion tips)
• Generic Discussion Questions—Fiction and Nonfiction
• Read-Think-Talk (a guided reading chart)

Also consider these LitLovers talking points to help get a discussion started for The Wisdom of Crowds:

1. In what way does Surowiecki's central proposition—that a crowd is smarter than its smartest person—seem counter-intuitive? Consider our culture, which is steeped in the twin beliefs of individualism and meritocracy.

2. What does Surowiecki mean when he says crowds are "information minus error"?

3. Care to comment on this: 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." How does that remark challenge the idea of "expert authority"? Does that mean that decisions are best made by committees?

4. What is the reason that crowds are smarter and make better decisions than individuals?

5. What are the basic problems, or obstacles, that all groups face and that must be overcome if a group is to act with intelligence?

6. What conditions must be met if groups are to reach sound decisions? How difficult are these conditions to meet?

7. Talk about how groups fail to attain wisdom? How does Surowiecki suggest this happens?

8. In terms of group failure, discuss the NASA Challenger disaster. How does that tragedy fit within this book's framework?

9. Contrast Surowiecki's theory with "group think," or crowd psychology, in which groups tend toward conformity, often to the detriment of sound decisions. What does Surowiecki believe is necessary to guard against group think?

10. Consider your personal experience with groups and organizations—personal or professional. Of those groups, do any meet the necessary conditions of Question 6? How do decisions get made in the groups you belong to?

11. The Wisdom of Crowds was written four years before the 2008 collapse of the housing bubble and subsequent global recession. How would (does) Surowiecki explain the irrational behavior of Wall Street and Main Street?

12. Which of the numerous anecdotes which Surowiecki includes in his book do you find most intriguing? Do his case studies sufficiently support his ideas? Might the author be open to the charge that he chooses only those exaples that support his position?

13. Talk about the ramifications of crowd wisdom for businesses, governance, science, and everyday life—walking down a busy sidewalk, driving in traffic, or the audience on "Who Wants to be a Millionaire?" Does the theory have application to your own life?

14. Can you think of examples where Surowiecki's therory of crowd intelligence might not apply? Say, in situations that undergo continual change—warfare, consumer preferences, growth in technology?

15. Does Surowiecki adequately justify (or prove) his thesis...at least to your satisfaction?

(Questions issued by LitLovers. Please feel free to use them, online or off, with attribution. Thanks.)

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