Book Review – The Wisdom of Crowds

2009 09 – Beijing

About this time I finished reading The Wisdom of Crowds... a provocative title for anyone who has ridden a crowded rush-hour metro line.

Surowiecki delivers an accessible and thought provoking exploration of the idea that the collective knowledge of a crowd surpasses that of the best individual member of the crowd. He accepts that not all crowds (groups) are wise, but argues that there are some key criteria that facilitate a crowds wisdom:
Diversity of Opinion;
Independence;
Decentralisation; and
Aggregation.
There are some great case studies of evidence of wise and irrational crowds and the elements of their success or failure.  As you might expect from such a title, the book delivers some support for democracy and free market operations, so long as they are implemented in such a way that supports the key criteria, thereby enabling the collective wisdom of the participants to be harnessed.
I'd recommend this book to anyone.