Wisdom of Crowds

The idea — coined by writer James Surowiecki — that aggregated judgment across a diverse group can outperform any single member. Across Kyle’s reading the concept appears mainly to mark a distinction that gets abused. In The Death of Expertise, Tom Nichols argues the internet conflates “the perfectly reasonable idea of… ‘the wisdom of crowds’ with the completely unreasonable idea that the crowds are wise because each member of the mob is also wise.” Surowiecki’s own caveat is quoted: “cognitive diversity” helps, but assembling “a group of diverse but thoroughly uninformed people” does not make their collective wisdom “smarter than an expert’s.” This is the epistemic split that anchors Voice of the People — wisdom of crowds is not the same as “the crowds are wise.”

The same tension recurs as a decision-making question elsewhere. In Amazon Unbound, Albert Price frames the Amazon Studios dilemma as “Do you trust storytellers, or do you trust data; the ingenuity of artists or the wisdom of the crowd?” — noting that Seinfeld and Breaking Bad were unpopular at first, so crowd-sourced creative concepts are suspect. And in The Unbundling of Venture Capital - Research, Kyle notes that power in venture has shifted “less by the discretion of gatekeepers and more by the wisdom of crowds” — here treated as a genuine structural force rather than a fallacy.

Context: “The Wisdom of Crowds” is a 2004 book by James Surowiecki arguing that, under the right conditions (diversity, independence, decentralization, aggregation), large groups can make better estimates and decisions than experts.

Where this appears

• The Death of Expertise — Nichols’s central use: crowdsourcing knowledge conflates Surowiecki’s “wisdom of crowds” with the false claim that “the crowds are wise.”
• Amazon Unbound — Albert Price’s storytellers-vs-data dilemma; crowd-sourced creative concepts as suspect.
• The Unbundling of Venture Capital - Research — power in venture shifting toward “the wisdom of crowds” over gatekeeper discretion.
• Voice of the People — the page that anchors the “wisdom of crowds ≠ crowds are wise” distinction.
• A Hedge Fund Manager Put… (tweet) — Joel Greenblatt’s jelly-bean experiment at Google isolates the independence condition: a silent written round averaged 1,771 against 1,776 actual, and the same room guessing aloud collapsed to 850.