Delusions of the masses

The Wisdom of Crowds
July 23, 2004

Nothing in James Surowiecki's The Wisdom of Crowds so becomes it as its opening. His introduction is informative, provocative and enthralling. From then on, it's almost all downhill.

The introduction begins by recounting how, in 1906, the scientist Sir Francis Galton went to a livestock show where some 800 visitors guessed the weight of an ox. The mean of their guesses was 1,197lb. The ox weighed 1,198lb. The crowd's collective judgement was all but perfect. The introduction ends by relating how a disparate group of people located where the US submarine Scorpion sank in the north Atlantic in 1968. The craft was later found 220 yards from the spot they had collectively pinpointed, though no individual guess was nearly so accurate.

These and other seemingly inexplicable happenings lead Surowiecki to claim that crowds are wiser than individuals, as long as the crowd is diverse - comprised of people with different skills and opinions - and its members are independent of each other. In these circumstances, he contends, many heads will always be better than one because the many heads' errors cancel each other out.

But none of Surowiecki's subsequent examples is nearly as convincing as the first two: some seem irrelevant to his case, and others appear to prove the opposite. Rushing recklessly from subject to subject - the stock market, learning theory, American football, Italian football, traffic management, science (yes, the whole of science), philanthropy, business management and democracy itself - Surowiecki repeatedly reveals scant knowledge of the matter at hand. He seems unaware that all serious scientific papers are peer-reviewed; he says charitable behaviour is a product of modern capitalism, as though altruism was not key to all historic religions, and is even recognisable in animals.

Surowiecki writes a business column for The New Yorker , so his shallow grasp of investment matters is especially baffling. He lambasts fund managers for failing to beat market indices, seemingly unaware that this failure often results from over-greedy management charges. He insists there is a "right" price for stocks. This all twaddle, and there is much more of it.

Surowiecki is bewildered because the business world does not employ the wisdom of crowds to help it make decisions. But this is exactly what much market research does: it asks a group of independent, disparate people to make choices and then calculates the mean. The difficulty is that business decisions rarely relate to problems that can be simply defined, such as an ox's weight. In business, and in life, defining the exact nature of a problem is usually half the difficulty - but crowds can choose, wisely or unwisely, only between relatively straightforward options.

There are some good things. Surowiecki writes lucidly and often elegantly.

He reports the findings of some fascinating small-scale research, though he often overrates it. But he never explains exactly how the ox's weight and the submarine came to be pinpointed so precisely. Happenstance perhaps?

Maybe if this book had been written by a crowd of authors, it would have been wiser and the errors would have cancelled each other out.

Winston Fletcher is visiting professor in marketing, Westminster University, and chairman, Royal Institution.

The Wisdom of Crowds: Why the Many Are Smarter than the Few

Author - James Surowiecki
Publisher - Little, Brown
Pages - 295
Price - £16.99
ISBN - 0 316 86173 1

You've reached your article limit.

Register to continue

Registration is free and only takes a moment. Once registered you can read a total of 3 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments
Register

Have your say

Log in or register to post comments