Home > Media > Books > James 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 - The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business,Economies, Societies and Nations
Pros: easy to read, interesting case studies, thought provoking, stimulating
Cons: not "scientific"
The Bottom Line: Recommended for anyone interested in new ideas. Crowds/markets can be effective in different situations and may be smarter than experts.
hansthemoleman's Full Review: James Surowiecki - The Wisdom of Crowds: Why the M...
BACKGROUND
The title of this book caught my attention while walking along in a bookstore. I'm fond of learning new things and being challenged by new ideas. My background is in health care, so I am interested to see how "general business"-type ideas could potentially be applied in health care. Purchased the book from Amazon.
REVIEW
The basic premise of this book is that crowds are not mindless, but that in fact, may be smarter than any individual or expert. Surowiecki identifies three types of problems and then outlines the conditions in which a "crowd" may be the best way to come-up with a solution. The types of problems include:
1. Cognition problems - problems with definitive solutions. Basically, identifying the optimal solution. An example is picking the winner of the Super Bowl or appropriately valuing the stock price of a company.
2. Coordination problems - problems where members of a group must figure out how to coordinate their behaviour with one another knowing that everyone is trying to do the same. Examples include navigating traffic or getting buyers and sellers together.
3. Cooperation problems - challenges of getting self-interested, distrustful people to work together. Examples include addressing environmental/pollution issues, paying taxes, and the notions of democracy.
The book structured as two parts - the first explaining the theory of why crowds may be smart, and the second exploring different case studies of each type of problem.
What I liked about this book was that the author clearly tries to explain each type of problem and goes through why a crowd may be smarter than you think. I must say that I was (and still am to some degree) skeptical about the premise of this book, but am open to the idea. How can a crowd (or market - see the next paragraph) be smarter than experts? It seems to go against what I would call "common sense". But, in the examples that Surowiecki provides, the crowd/market seems to be just that - smarter. He makes an interesting and persuasive case.
I also liked how the author doesn't simply state that markets/crowds are *always* better. He explicitly points out conditions in which crowds and/or markets can be less efficient and effective than individuals - basically when there is no diversity. He uses the NASA/Columbia disaster as an example.
Okay, the thing that I really disliked about this book is that the author describes a crowd as being the same thing as a "market". I wasn't made aware of this point until after reading a third of the book. So, the title may be a bit mis-leading. Surowiecki is basically saying that markets, in specific circumstances, can provide something valuable. On some level, I felt duped, but it didn't detract too much from the overall enjoyment of the book. My only other criticism of this book would be the final chapter. I felt that the final chapter on Democracy to be the weakest of the entire book - it just didn't have as much flow to it as the rest of the book, and it wasn't as convincing as some of the other chapters.
For those of you thinking, "why should I read this book", here's my answer. Surowiecki provides interesting ways in which groups/crowds/markets may be used to make improvements to things like policy development, organization of business, and sharing of information. I'll describe one case study that intrigued me. Basically, the author proposes that a "stock-market" type model could be used to better predict outcomes of future events and/or to share information within and among members of an organization. He uses the Iowa Electronic Market as an example of diverse people with partial knowledge accurately predicting the outcomes of elections. Previously, I had never heard of the Iowa Electronic Market, but Surowiecki (or at least his sources) suggest that this model could be used effectively to share information among different and diverse groups - he uses the intelligence community in the US. I just thought this idea to be an interesting way to help share information - it's certainly worth thinking about.
OVERALL RATING
Overall, I would recommend this book to anyone who is interested in being stimulated by new ideas, interested in group dynamics, interested in communicating information within organizations, or interested in trying to make better sense of daily life. Surowiecki describes several and current problems to illustrate his theory and how "crowds" can help solve them. This book isn't a *must have*, but it sure challenges you to think about things in a different way. The book is easy to read and is entertaining, while mentally stimulating at the same time.
OTHER BOOKS
If you're interested in this type of book, I would suggest that you try either "The Cathedral and the Bazaar" by Eric Raymond or "The Ingenuity Gap" by Thomas Homer-Dixon. Raymond's book is about the open source software movement, and some of the ideas presented in "The Wisdom of Crowds" sound familiar to ideas in "The Wisdom of Crowds". Homer-Dixon's book, while intriguing, is a bit difficult to get through because I find it to be very poorly written - it's as if he's *speaking* to you and so it's somewhat awkward to read. Nevertheless, the idea(s) presented are stimulating. The author refers to "The Tipping Point" by Gladwell a few times, but I haven't yet read that book, so I can't recommend it at this time.
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