The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations

The Wisdom of Crowds, first published in 2004, marries discoveries in economics and sociology to describe the phenomenon of crowd intelligence. The book notes that large groups of people typically make better, more accurate decisions than even the most informed solitary experts. When crowds satisfy specific conditions, they can solve complex problems, make wise decisions, and even predict the future.

Authored by finance journalist James Surowiecki, The Wisdom of Crowds immediately gained traction among both business professionals and general audiences, becoming a New York Times bestseller. It remains one of Surowiecki’s most recognizable and influential works.

This guide refers to the August 2004 edition published by Anchor Books.

Summary

Surowiecki opens The Wisdom of Crowds with anecdotes that dramatize his central claim: When diverse, independent individuals contribute to a decision-making process, the group as a whole can outperform even specialists. At a county fair in 1906, scientist Francis Galton assumed that ordinary people’s guesses at the weight of an ox would be wildly inaccurate compared to experts’ guesses. Instead, the average of the nearly 800 guesses came within one pound of the true weight.

Surowiecki then recounts the 1968 disappearance of the US submarine Scorpion. With little data, naval officer John Craven assembled mathematicians, salvage workers, and submarine experts, asking each to make independent guesses about its location. By averaging their answers, the team pinpointed the wreck site within a few hundred yards, closer than any single estimate. Surowiecki highlights how the “wisdom of crowds” emerges not from consensus or leadership but from aggregating many independent judgments into one collective result.

The Wisdom of Crowds argues that, under the right conditions, groups consistently make better decisions than individual experts. Surowiecki frames this as a challenge to the conventional wisdom of “chasing the expert,” showing that collective intelligence can be more accurate, more resilient, and more innovative (24). To be “wise,” a crowd must meet three conditions: It must be diverse (drawing from different perspectives and backgrounds), independent (with individuals forming opinions without being swayed by others), and decentralized (so decisions don’t flow from one central authority). When these conditions are met, collective judgment can outperform even the most qualified specialists.

Surowiecki defines “crowds” broadly. They may be formal groups, such as corporate boards or scientific teams, or looser collectives, such as markets or voters, who may not realize they’re acting in concert. He distinguishes between three types of problems that crowds address: cognition problems (finding a single correct answer), coordination problems (aligning behavior across many individuals), and cooperation problems (getting self-interested or distrustful people to work together).

Chapters 1-6 illustrate these principles with case studies. Surowiecki shows that television audiences on Who Wants to Be a Millionaire? outperform “phone-a-friend” experts; that bees’ waggle dances reveal how diversity of exploration creates better coordination; and that failed decisions like the Bay of Pigs invasion demonstrate what happens when dissent and diversity are stifled. He stresses that independence is fragile: Information cascades, social proof, and herding can quickly turn group wisdom into group folly.

Chapters 7-12 extend the theory to real-world institutions. Surowiecki explores how traffic jams expose the limits of coordination in dense, diverse systems; how global scientific collaboration on SARS shows decentralization at its best; and how small groups like NASA’s Columbia shuttle team illustrate the dangers of polarization and premature consensus. He then examines markets as powerful aggregators of dispersed information, explaining both their efficiency and their vulnerability to bubbles when independence collapses. Finally, he considers democracy itself as a form of crowd wisdom—imperfect, but more robust than technocratic rule precisely because it distributes judgment across millions of independent voters.