October 16, 2022

Wisdom of crowds – James Surowiecki

By Patrick Chabannes

“Independence of opinion is both an essential ingredient for collectively wise decisions and one of the hardest things to keep intact.”
With intelligence and clarity James Surowiecki introduces us to the Smart Mobs. The Crowd, you, me, the human race beyond the forms of societies, particular cultures has a group intelligence. 
Thanks to the examples applied to the theoretical studies, you will no longer look at crowds, groups, teams, companies and organisations in the same way. Indeed, you will try to understand them by analysing their composition in the light of the theory of collective intelligence and perhaps you will see the strength and the limits of direct democracy.

“In a liberal society, authority has only a limited impact on the actions of individual citizens. As a result, many problems need to be solved from below, not from above. And the heart of the matter is the same: how to get overall action without dictating to anyone what to do, to get effective and coordinated overall action.

“Diversity, in itself, has value, and therefore the mere fact of composing a diverse group makes it more capable of solving a problem.”
The author describes the three types of wisdom that see the Crowd superior to the expert: Cognition, Coordination and Cooperation – and the three conditions necessary for its application:

1) Diversity
Scott Page, University of Michigan, has highlighted that “diversity, in itself, has value, and so the mere fact of composing a diverse group makes it more capable of solving a problem”.
Skills, age, psychological profile, life course or culture are agents of Diversity. A society made up of people from the same socio-economic background and education, however intelligent, will be less effective than a diverse group. In the diverse group, brains rub together and creativity emerges. In the homogeneous group, individuals often work together, resulting in mistakes and loss of efficiency.

2) Independence
“Independence of opinion is both an essential ingredient for collectively wise decisions and one of the hardest things to keep intact.
The smartest groups are therefore made up of people of different views with the requirement of independence…. A person can be biased or even irrational. As long as everyone retains independent judgment, that person will not dumb down the group.

About the information’s cascade
“The more influence members of the group have on each other and the more contact they have with each other, the less likely the group’s decisions are to be wise.”
The chapter on the concept of the Information Cascade should be read, where it is demonstrated how voluntarily or involuntarily a piece of information or an idea is adopted by the Crowd when it gives up its freedom and independence of judgement. Marketing and propaganda has the Cascade as its main lever. 

3) Decentralisation and aggregation
Tacit Knowledge, a concept of Friedrich Hayek, “is knowledge that is difficult to summarise or to transmit to others because it is attached to a place, a profession or an experience, but it is nonetheless of great value”.
Knowing how to aggregate Tacitus’ knowledge is paradigm! Linux is a pure example.
“Balance between the local and the global. A decentralised system only produces truly intelligent results if there is a way to aggregate all the information in the system.

Coordination and conventions
“Conventions are the basis of order and stability, that’s obvious. But in the course of a day, they reduce the cognitive work we have to do, and that is not the least important.

The Ultimatum Game. 
“The key to cooperation is the shadow of the future.”
Let’s take two people. Give one €10 and nothing to the other. The owner proposes a split which, if accepted, sees the parties leave with the sums divided as proposed and, if refused, sees both parties parting with empty hands. The outcome of the game is astonishing. It does not depend on the amount at stake. The most frequent offers are for €5!!! Cooperation.

Believing in the intelligence of the Crowds is believing in Man, in freedom, in independence and decentralisation. Liberalism is not an ideological construction. It is life at the heart of our world made up of exchanges and social relations whose engines are trust, cooperation and freedom. 

Thank you to Frédéric who introduced me to this book and opened up my horizons. I hope you enjoy reading it.

Anchor Books, New York, 2005, ISBN: 0-385-72170-6, 284 pages.