Historically, the leading lights of our world have held a low opinion of the masses, dismissing them as dirty, uneducated and uncultured. But according to Mr. Surowiecki, this elitist thinking couldn't be more mistaken. It may be that individual members of the mob are dirty, uneducated and uncultured, but if the collective intelligence of the mob is tapped, it has the capacity to provide astonishingly accurate answers, in the aggregate, to questions that experts struggle to get right. How can this be? Why would a crowd understand a problem better than an even expert?
Mr. Surowiecki argues that crowds are wise because they not only filter out wildly inaccurate answers, they tap into an evolutionary truth that our brains have evolved to work optimally in a communal setting. Singly, someone might reason his way to a foolish action, but if that person is part of a crowd, he might receive advice not to commit the action, thereby moderating his behavior. Mr. Surowiecki is quick to point out that the wisdom of crowds can be deceptive. Crowds are much more susceptible to groupthink than individuals are. Not only that, they cannot solve problems that require specialized knowledge if none of their members have that knowledge. A crowd doesn't know how to do brain surgery if none of its members are neurosurgeons. And yet for all of the crowd's limitations, its powers can be exploited to unearth fascinating truths. This is no more demonstrably true than for prediction markets, which have been established to allow people to make bets on everything from electoral outcomes to terrorist attacks. The participants of these markets are a crowd and Mr. Surowiecki vividly details just how eerily accurate they can be.
The Wisdom of Crowds is a thought-provoking read which ranges from economics to human psychology, to politics in a largely successful attempt to convince the reader that there is an underutilized power in crowds. But while Mr. Surowiecki makes his case with a good balance of rationality and enthusiasm, he's forced to put so many caveats on crowd wisdom that I was left to wonder if the knowledge gleaned from crowds could ever truly be trusted. Taken as an interesting intellectual exercise, The Wisdom of Crowds is a fun and engaging read, but it feels far too ill-defined to be taken more seriously than that. The major exception to this conclusion are prediction markets, the efficacy of which are completely compelling. (3/5 Stars)
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