Book Review: The Wisdom of Crowds

In "The Wisdom of Crowds", James Surowiecki argues that, under the right circumstances not only are groups intelligent, but that they are often smarter than the smartest people in them. Surowiecki disputes the notion of Charles Mackay, who wrote in 1841 that: "Men, it has been well said, think in herds...It will be seen that they go mad in herds, while they only recover their senses slowly and one by one." Or, as the French writer Gustav Le Bon said "In crowds it is stupidity and not mother wit that is accumulated." Le Bon was appalled by the rise of democracy and dismayed by the idea that ordinary people had come to wield political and cultural power which makes this book all the more interesting examination of not only the so-called "Wisdom of Crowds" but its relationship to how people should be governed. Surowiecki makes his arguments through what he calls the three types of problems groups can solve, cognition (who will win the Super Bowl this year), coordination, (how do you safely drive in heavy traffic), and cooperation (how to deal with pollution). Finally, the Surowiecki explores the right circumstances under which groups can be wise, including groups that are sufficiently large, (turns out bigger is usually better) diverse, independent and decentralized.

While full of interesting examples and case studies of wise crowds such as the weight of an ox, the location of a lost submarine, heavy traffic in London, pedestrian traffic in NYC, etc. Surowiecki's greatest contribution is in the ways we think about governing and public administration, especially in light of new technological tools. The examples of deliberative polling and deliberative democracy, election markets and even predicting disasters within a betting market are fascinating, if not controversial ideas. These thought provoking examples and supporting evidences along with an engaging writing style are the strong points of the book. However, Surowiecki doesn't go far enough into the practical application of this new idea or how to sufficiently build or leverage groups that can "operate under the right circumstances to be wise".

What "The Wisdom of Crowds" does do very well is change the thinking on the subject of representative vs. direct democracy. The conventional wisdom since the founding fathers was that the best ordinary people could do was elect intelligent individuals who reflect the values of the community, state or nation and send them to work. However, declining costs of communication and the ability to quickly aggregate and dis-aggregate vast amounts of data and information because of technology, suggests that a more direct democratic model of government is not only now possible, but also desirable. "The Wisdom of Crowds" contributes an important perspective in exploring the role technology can play in governance and public administration and to the question: can the "people" make better choices than even the smartest individuals? "The Wisdom of Crowds" is a useful read for policy analysts and public administrators.