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

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Vacation, n., time spent reading while away from home

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Posting has been light because I’m nearing the end of the quarter at school, and I am in the final stages of a very big project. And posting will probably continue to be light because I’ll be heading off on vacation as soon as school is done. I’m thinking about taking my laptop with me, but even if I do, I’m not sure how close I’ll be to the Internet. I’m excited about this vacation (we’ll be joining my family at the beach in North Carolina) not just because it’ll be a much needed break from school, but also because there’s no place I’d rather read than on vacation. On a proper vacation there are seemingly endless hours to spend with your books. I also love the way certain reading experiences become associated with certain exotic locales – and by “exotic” I mean simply “not home.” For example, last summer Mrs. Millions both read Walker Percy’s classic The Moviegoer during our honey moon in St. Maarten. The unfamiliarity of that island paradise mingled with the humidity of New Orleans where Percy’s Binx Bolling is trying to keep “despair” at bay. The book and the place where I read it combined to form a peculiar sort of dreamy memory that I love. Though I haven’t even gotten the suitcase out of the closet, I already know which four books I’ll be taking with me. I plan to finish The Count of Monte Cristo on the plane ride there. I’ve been enjoying the book immensely, by the way. After that I’m going to read Belly, a debut novel by Lisa Selin Davis that will be coming out later this summer. The publisher’s publicity compares her writing to that of Jane Smiley and Richard Russo. I’m also bringing a couple of nonfiction books: David Lipsky’s account of following a class of cadets through West Point, Absolutely American. Lipsky was originally assigned to write an article for Rolling Stone about the military academy but ended up sticking with the story for four years. I’m also bringing The Wisdom of Crowds by James Surowiecki, the resident business writer at the New Yorker. The book’s premise, which is borrowed from the world of economics, is that the collective choices of large populations of people are often correct, and that it’s even possible, by setting up what amounts to a futures market for ideas, to use this effect to predict the future. A good example of this is a futures market where one can bet on who will be elected president. Such markets have been very good predictors of actual events over the years. None of these books particularly strike me as “summer reading,” but I’ll just be happy that it’s summer and that my only obligation is to read.

Books of the Boom

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I caught a few minutes of Fresh Air on NPR while I was out running a quick errand today. Terri Gross was interviewing David Denby, the New Yorker film critic who has a new book out. The book is called American Sucker and it is a memoir of the boom years. In 2000 Denby and his wife split, and he decided that he wanted to keep the Upper West Side apartment that had been their home for many years. In order to do this, Denby hatched a plan to buy out his wife’s share of the apartment. Lacking the funds to make the apartment his and cast adrift by the collapse of his marriage, Denby threw himself wholeheartedly into the mania of the stock market boom with the hopes that he, like so many others seemed to be doing, could hit it big. It would be the solution to all of his problems. A sort of addiction to his quest set in and American Sucker was the result. Today, Terri Gross, in her way, was trying to get him to relate his experience to some classic gambling films, Denby being a film critic and all. Denby, however, begged off and mentioned two interesting books that he feels are most analogous to the way he felt during his ordeal. Dostoevsky’s The Gambler and a somewhat forgotten Victorian classic by Anthony Trollope, The Way We Live Now, to Denby’s mind, best portray a sense of monetary desperation in the midst of a boom. I’m hoping that over the next few years there will be more books that look at the boom of the late nineties through a literary lens. It was a strange and fascinating time. Denby’s colleague at the New Yorker, James Surowiecki has penned a less personal book about business and money called The Wisdom of Crowds which is slated to come out at the end of May. A quick look reveals that Surowiecki has put together a readable tome meant to illustrate a principle that many economists hold dear: the idea that decisions can be made, problems can be solved, and the future can be predicted by the market. Imagine the Nasdaq but replace companies with possible outcomes. At the end of the day the outcome that is trading at the highest level is probably the correct answer to whatever problem was trying to be solved. Using markets you can, as Surowiecki terms it, unlock the “wisdom of crowds.” Last summer there was much public outcry when it was announced that one of our government agencies was considering setting a market that was meant to predict future terrorist attacks. The idea of people profiting off of this sort of speculation was abhorrent to many people and the plans were shelved, but, in The Wisdom of Crowds, Surowiecki will likely argue that the plan would have worked.

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