Originally published at: https://blog.12min.com/the-wisdom-of-crowds-summary/
Why the Many Are Smarter Than the Few and How ...Have you ever wondered how an amateur crowd could behave like an expert on discernment, coordination and relations queries?
Today’s democracy, which puts together distinct, self-reliant, decentralized perspectives, is apparently the informative form of government.
Who Should Read "The Wisdom of Crowds"? And Why?Once in awhile, people have to abandon their habits, beliefs or theories not only to make room for new ones but also because they’ve become old and unproductive. Try not to impose your viewpoints on anyone, be polite and tender when you explain your theories or methods.
These days, the internet has somehow managed to connect us with every person in the world. In all four parts of the Earth, we can communicate, cooperate and relate.
Many books disregard the importance of the collective opinion. Since the beginning of the 21st century, the individualism, and its features are being enforced by the society.
James Surowiecki encourages everyone to understand the real power of crowds, by realizing their accuracy in managing their every-day situation.
About James Michael SurowieckiJames Michael Surowiecki is an American journalist, columnist and a staff writer who currently works at The New Yorker, (writes his popular entrepreneurial columns, "The Financial Page"). He was born on April 30, 1967, in Meriden, Connecticut, U.S.
Despite being born in the US, he spent much of his time in Puerto Rico, where he grew up and educated himself. In 1988 James obtained his college degree from the University of North Carolina at Chapel Hill.
As a journalist, he has written many columns for Wall Street Journal; Foreign Affairs; New York Times; The Motley Fool; etc. He momentarily lives in Brooklyn with his wife.
"The Wisdom of Crowds Summary"At the beginning of the 20th century, a young scientist known as Francis Galton came to a remarkable discovery in unusual nonscientiﬁc settings: Fat Stock and Poultry - West England.
Despite his early non-scientific revelations, Galton spent his time and career learning about human characteristics and their evolvement. This work has left him persuaded that the only path to social health and accountability was to give the power into the hands of the aristocracy or elite.
According to him, education and parental upbringing have a huge influence on person’s behavior, so the first thing an individual should do was to manage somehow to control these tendencies and sensations.
Yet, his social background led him to a whole new level of firmly suggested ideas that such elitism is foolish if applied extremely because the crowds have the last word.
For instance: Galton reminds its readers of one unusual situation. One day at the livestock fair, the people have organized a contest. All the participants would have to presume the weight of a live ox – precisely or as close as possible after butchering!
There was a lot of excitement; the contestants started purchasing tickets on which they submitted their guesses.
Galton only wanted to demonstrate that an ordinary fairgoer would not even come close to the precise number or very far off the mark. The results shocked Francis, not only that he was the mistaken one but also the crowds concisely expressed their knowledge.
After he counted and compared the crowd’s guesses and saw the big picture, Galton was shocked.
He realized that the group had predicted the weight of an average ox - almost perfectly - close to a bull’s eye.
Strange circumstances and even more outlandish outcomes, it is not something paradoxical it is real.
“The Wisdom of Crowds” best-selling book examines the apparent anomaly that shows why crowds composed of non-experts (ordinary people) are collectively smarter than an individual or small groups (teams) of experts.
We underrate the crowds, which deserves the status of an autonomous and decentralized body. Individual judgments aggregated into one analysis are the dominant force regarding accuracy or precision.
James Surowiecki- a columnist and a writer by profession also acknowledged this theory as well. He stands for productive thinking in a group which can quickly comprehend the value and impact of skillful experiments, discoveries, and unique anecdotes.
This essential insight represents the modern ﬁnancial investment theory and method, placing its priority on the difﬁculties of knowing or understanding the market.
As a comprehensive and well-written masterpiece, it surely is recommended to anyone.
Key Lessons from “The Wisdom of Crowds”1. Find out your true intentions 2. Diversity is not always the same as uniqueness 3. Crowds must be decentralized
Find out your true intentionsSelf-sufficiency supports the wisdom of crowds in two ways: it counters the correlation of adverse decisions from leading everyone in the wrong direction. And, it also guarantees a range of individual views, from conservative to modern and unconventional.
Diversity is not always the same as uniquenessAsk yourself – what is the bee's method for ﬁnding food?
They certainly do not coordinate with people. Instead, they rely on their capabilities to find the best prospects for ﬂowers, bees scout all the time; they seek or search for flowers. The ultimate objective is to find nectar.
Crowds must be decentralizedFor instance, America’s intelligence and defense system is known to be decentralized. Various of different agencies collect and analyze information individually.
These agencies don’t coordinate with one another to assemble valuable pieces of information that would help them to predict and possibly even prevent a new September 11 kind of attack.
Even though in this case – centralization may be the solution, on the other hand, crowds are efficient only if they are decentralized.
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“The Wisdom of Crowds” Quotes[bctt tweet="Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise." username="get12min"]
[bctt tweet=“It may be, in the end, that a good society is defined more by how people treat strangers than by how they treat those they know.” username=“get12min”]
[bctt tweet=" Groups that are too much alike find it harder to keep learning, because each member is bringing less and less new information to the table. Homogeneous groups are great at doing what they do well, but they become progressively less able to investigate alternatives." username=“get12min”]
[bctt tweet=“Under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them.” username=“get12min”]
[bctt tweet=“Sometimes the messiest approach is the wisest.” username=“get12min”]
Our Critical ReviewIt all started with Francis Galton’s conclusion in 1906; he realized - a crowd composed of ordinary people is more reliable in guessing or discovering, then a group of experts in a particular field.
Many people are not so amazed by this book, which does not seem reasonable to us, because of the well-explained methods and ideas representing the modern ﬁnancial literature.