The Wisdom of Crowds

James Surowiecki

New Yorker business columnist James Suroweicki demonstrates that large groups of people can be smarter than an elite few, explaining both why democracy works, and also how it goes wrong. The crowd can be wise, IF it is diverse, it has a particular kind of decentralization, and its individual members think independently.

A group made up of only people who agree with each other (such as all-conservative or all-liberal groups), or a group in which most members defer to the judgment of a few, will make bad decisions. A large and diverse group of independent-minded people, none of whom know anything about engineering, are unlikely to make good engineering decisions.

A large and diverse group of voters, however, WHEN all of them have some information (even if each of them thinks all the others are misinformed), AND they are free to disagree and contest with each other, AND their individual opinions can be aggregated in a process that produces a collective judgment -- that judgment will be a good one. Not a perfect one, but good enough to live with, and better than an elite few could have decided for them.

Another book I loved so much I thought I'd never give it up -- but somebody else wanted it. :)