The Wisdom of the Crowd

Today while the snow fell in Holyoke, we watched Sunday Morning on CBS. The lead piece was about the wisdom of crowds, how time after time, a large group of people can be wiser than any single person. One example: a crowd in olden days guessed the weight of an ox. A mathematician averaged all of the guesses, then produced a number 1177 pounds–the real weight was 1178.

James Suroweicki was profiled, he writes an economics column in the New Yorker. He looked at how stocks are picked, and how we can gather information about which stocks will go up by using the wisdom of crowds. Anita Albersy, a Harvard trained economist, has a website that predicts which movies will be successful. Surfers can bet on which movies will win the Oscar. Again and again the predictions are right.

But the lesson is that the experts are not always right. Suroweicki attributed the spectacular failure of the 1960 Bay of Pigs invasion of Cuba as an example of a president surrounded by ‘yes men.’ The sycophants did not realize how bad the idea was until it was all over and they looked very bad, since the Cubans did not rise up and throw out Castro.