[Marxism] Collective wisdom

[Louis Proyect <lnp3@xxxxxxxxx>]

NY Times Book Review, May 22, 2004
'The Wisdom of Crowds': Problem Solving Is a Team Sport
By SCOTT McLEMEE

THE WISDOM OF CROWDS
Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes 
Business, Economics, Societies, and Nations.
By James Surowiecki.
296 pp. New York: Doubleday. $24.95.

Generations of advertisers and business gurus have banked on the 
premises of Sigmund Freud's ''Group Psychology and the Analysis of the 
Ego,'' a slender volume with a big argument: when people assemble en 
masse, all the raw material making up the individual psyche (libido, 
aggression, whatever) is also present, but on a gigantic scale. And the 
power for rational thought is thereby dwarfed. The crowd is considerably 
dumber than its smartest members. This explains, for example, Britney 
Spears, irrational economic exuberance and the occasional episode of 
public yearning for an authority figure to do the superego's job, 
whether by seizing state power (the fascist dictator model) or by going 
on television to say ''You're fired'' (the reality TV version).

Freud merely translated the Victorian era's darkest suspicions about 
democracy into psychoanalytic jargon; the profound irrationality of 
''the mass'' was already a cliché in 1921. In ''The Wisdom of Crowds,'' 
James Surowiecki, who writes a column called The Financial Page for The 
New Yorker, challenges that received wisdom. He marshals evidence from 
the social sciences indicating that people in large groups are, in 
effect, better informed and more rational than any single member might 
be. The author has a knack for translating the most algebraic of 
research papers into bright expository prose -- though the swarm of 
anecdotes at times makes it difficult to follow the progress of his 
argument.

His thesis is that society is able to get along from day to day because 
people exercise a kind of rationality as a group that allows them (or 
us, rather) to handle three kinds of problems. Surowiecki defines the 
first as cognition problems: questions that have ''definitive'' or 
factual solutions. If you ask a group of people to estimate how many 
jelly beans are in a jar, for example, the average of their answers is 
likely to be much more accurate than any given individual's guess. This 
seems counterintuitive, but there is a considerable body of experimental 
evidence to support it. Aside from tests involving college sophomores, 
there are data from ''Who Wants To Be a Millionaire?'' -- where, as 
Surowiecki puts it, ''random crowds of people with nothing better to do 
on a weekday afternoon than sit in a TV studio picked the right answer 
91 percent of the time.''

Slightly less eerie are the accounts of how groups solve questions of 
coordination -- for example, how pedestrians on a busy sidewalk account 
for one another's movements well enough to avoid collisions (most of the 
time, anyway).

By the time the author comes to the topic of cooperation, we are not 
just in the middle of the book but at its core. There is a certain 
notion of rationality that starts from the assumption that each of us 
is, in essence, a monad designed to maximize profit and pleasure. Our 
interactions with one another are, by that light, a means of 
self-aggrandizement. If you do not kill me for my wallet at the first 
opportunity, or vice versa, that is because we are afraid of certain 
consequences we predict might be bad, like being arrested.

But research consulted by Surowiecki indicates that we do in fact have 
prosocial tendencies. Given the chance to cheat, lie and freeload, fewer 
people do so than one might expect. (I, for one, am relieved.)

A socialist might draw some optimistic conclusions from all of this. But 
Surowiecki's framework is decidedly capitalist. The market is a 
mechanism for translating ''the wisdom of crowds'' into optimal results, 
though things would probably improve if business leaders were a little 
less prone to thinking that, as Margaret Thatcher once put it, ''There 
is no such thing as society.'' Whether Surowiecki's book will prevent 
another Enron is very much to be doubted, but his worldview is at least 
less cynical than Victorian notions that humanity, as a group, is a dumb 
herd.


Scott McLemee is a senior writer at The Chronicle of Higher Education.


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