It's the Aggregation, Stupid!

Abstract

The Wisdom of Crowds: Why the Many Are Smarter than the Few and How Collective Wisdom Shapes Business, Economies, Societies, and Nations. By James Surowiecki.* New York: Doubleday, 2004. Pp. 296. $24.95. "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." So wrote Charles Mackay in the Preface to his Extraordinary Popular Delusions and the Madness of Crowds, a work that aimed to catalogue mass delusions from the Crusades to witch hunts, the South Sea bubble to the tulip craze, alchemy to fortune telling. Mackay's study of the irrational behavior of crowds was unusually detailed, but it hardly stands alone. Over two thousand years earlier, Socrates had complained to Crito, "Would that the majority could inflict the greatest evils, for they would then be capable of the greatest good, and that would be fine, but now they cannot do either. They cannot make a man either wise or foolish, but they inflict things haphazardly." Nineteenth-century social theorist Gustave Le Bon was even more dismissive: This very fact that crowds possess in common ordinary qualities explains why they can never accomplish acts demanding a high degree of intelligence. The decisions affecting matters of general interest come to by an assembly of men of distinction, but specialists in different walks of life, are not sensibly superior to the decisions that would be adopted by a gathering of imbeciles. The truth is, they can only bring to bear in common on the work in hand those mediocre qualities which are the birthright of every average individual. In crowds it is stupidity and not mother-wit that is accumulated.