Posted by: Roger Pielke, Jr.
A while back I wrote about The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies, and Nations, by James Surowiecki (Doubleday, 296 pp., $24.95).
In today’s Financial Times a regular columnist, John Kay, a British economist, discusses the wisdom of crowds, and of experts (subscription required but the essay is available free here). An excerpt:
“So the crowd is more likely to be right about things that do not matter, like guessing the weight of an ox or the number of jelly beans in a jar, and the expert is more likely to be right about things that do matter, like flying an aircraft or brain surgery. Where good judgments are important to us, we select people who are likely to be good at making these judgments and train them until they are very good at making these judgments. There are flight academies and medical schools, but no university offers a course on how to guess the weight of an ox or count the number of jelly beans in a jar… it is a mistake to place too much confidence in either great men or the market… Be sceptical: ask why you should buy what others want to sell. Discount the conventional wisdom. Be wise to conflicts of interest. There is wisdom in crowds, but more often wisdom in the wise. And you can beat the market, but not as often as the crowd would have you believe.”