in Journalism

The wisdom of crowds

James Surowiecki’s Financial Page in the New Yorker has become a must read, a one-page column connecting topics such as macro-economic statistics, currency policy, and Argentina’s promptness policy in clear, concise, enlightening language. He’s coming out with his first book next week, The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations. Kirkus Reviews says,

Multitudes are generally smarter than their smartest members, declares New Yorker writer Surowiecki. With his theory of the inherent sagacity of large groups, Surowiecki seems to differ with Scottish journalist Charles Mackay’s 1841 classic, Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, which dealt with such stupidities as the South Sea Bubble, tulip-mania, odd styles of whiskers, and dueling. Our 21st-century author admits that there are impediments and constraints to the intelligence of large groups, usually problems of cognition, coordination, and cooperation. A group must have knowledge, Surowiecki states: not extensive knowledge, but rudimentary comprehension of basic fact with harmonized behavior by individual members. Finally, individuals must go beyond self-interest for the good of all. That’s how capital markets and Google’s algorithm work, and how science isolated the SARS virus.

Also see his article in Wired.