James Surowiecki

The smartest groups, then, are made up of people with diverse perspectives who are able to stay independent of each other.

On the simplest level, telecommuting makes it harder for people to have the kinds of informal interactions that are crucial to the way knowledge moves through an organization. The role that hallway chat plays in driving new ideas has become a cliche of business writing, but that doesn't make it less true.

The history of the Internet is, in part, a series of opportunities missed: the major record labels let Apple take over the digital-music business; Blockbuster refused to buy Netflix for a mere fifty million dollars; Excite turned down the chance to acquire Google for less than a million dollars.

In a world where companies increasingly know about their business in real time, it makes no sense that public reporting mostly follows the old quarterly schedule. Companies sit on vital information until reporting day, at which point the market goes crazy.

Linux is a complex example of the wisdom of crowds. It's a good example in the sense that it shows you can set people to work in a decentralized way - that is, without anyone really directing their efforts in a particular direction - and still trust that they're going to come up with good answers.

It's a familiar truism that at any one moment, financial markets are dominated by either fear or greed. But the healthiest markets are those that are animated by both fear and greed at the same time.

The essence of procrastination lies in not doing what you think you should be doing, a mental contortion that surely accounts for the great psychic toll the habit takes on people. This is the perplexing thing about procrastination: although it seems to involve avoiding unpleasant tasks, indulging in it generally doesn't make people happy.

Groups are only smart when there is a balance between the information that everyone in the group shares and the information that each of the members of the group holds privately. It's the combination of all those pieces of independent information, some of them right, some of the wrong, that keeps the group wise.

Corporations hope that the right concept will turn things around overnight. This is what you might call the crash-diet approach: starve yourself for a few days and you'll be thin for life.

Politically speaking, it's always easier to shell out money for a disaster that has already happened, with clearly identifiable victims, than to invest money in protecting against something that may or may not happen in the future.

The value of a currency is, ultimately, what someone will give you for it - whether in food, fuel, assets, or labor. And that's always and everywhere a subjective decision.

In part because individual judgement is not accurate enough or consistent enough, cognitive diversity is essential to good decision making.

Solyndra's failure isn't a reason for the government to give up on alternative energy, any more than the failure of Pets.com during the Internet bubble means that venture capital should steer clear of tech projects.

Intellectual-property rules are clearly necessary to spur innovation: if every invention could be stolen, or every new drug immediately copied, few people would invest in innovation. But too much protection can strangle competition and can limit what economists call 'incremental innovation' - innovations that build, in some way, on others.

I started in business journalism from the outside, so when I started writing about markets and business, I was struck by the fact that markets seemed to work well even though people are often irrational, lack good information and are not perfect in the way they think about decisions.

All things being equal, letting people make decisions for themselves will produce smarter outcomes, collectively, than relying on government planners.

A long-term crisis, after a certain point, no longer seems like a crisis. It seems like the way things are.

If small groups are included in the decision-making process, then they should be allowed to make decisions. If an organization sets up teams and then uses them for purely advisory purposes, it loses the true advantage that a team has: namely, collective wisdom.

Paradoxically, the best way for a group to be smart is for each person in it to think and act as independently as possible.

Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise.