James surowiecki quotes

Bubbles and crashes are textbook examples of collective decision making gone wrong. In a bubble, all of the conditions that make groups intelligent - independence, diversity, private judgement-disappear.

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.

Popular as Keynesian fiscal policy may be, many economists are skeptical that it works. They argue that fine-tuning the economy is a virtually impossible task, and that fiscal-stimulus programs are usually too small, and arrive too late, to make a difference.

The fundamental problem with banks is what it's always been: they're in the business of banking, and banking, whether plain vanilla or incredibly sophisticated, is inherently risky.

Downsizing itself is an inevitable part of any creatively destructive economy.

Pop music thrives on repetition. You know a song's a hit when you've heard it so often that you'll be happy never to hear it again.

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.

For a crowd to be smart, the people in it need to be not only diverse in their perspectives but also, relatively speaking, independent of each other. In other words, you need people to be thinking for themselves, rather than following the lead of those around them.

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

Breaking tasks down into smaller sub-tasks can be very useful.

A consumer-finance agency is a good thing, but it would do well to teach consumers a simple lesson: if you don't understand the deal you're making, don't make it.

But, if recent history has taught us anything, it’s that self-regulation doesn’t work in finance, and that worries about reputation are a weak deterrent to corporate malfeasance.

The important thing about groupthink is that it works not so much by censoring dissent as by making dissent seem somehow improbable.

Now, modern economies have a very effective mechanism for deciding if salaries are really too high: it's called the free market. That's how most people's salaries are set, after all, including those of major-league baseball players and European soccer players.

There are certainly valid reasons for taking a company private, and it's also possible that C.E.O.s perform better when monitored by a small number of owners in a private company rather than by the dispersed and often uninterested shareholders of a public corporation.

Real politics is messy and morally ambiguous and doesn't make for a compelling thriller.

Art collecting has traditionally been the domain of wealthy individuals in search of rewards beyond the purely financial.

Standards wars involve lots of variables, and understanding them often seems more an art than a science. They generally involve just two big players, and end in a winner-take-all situation.

It may be that the very qualities that help people get ahead are the ones that make them ill-suited for managing crises. It's hard to prepare for the worst when you think you're the best.

Of course, plenty of people don't think that guaranteeing affordable health insurance is a core responsibility of government.

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.

You can't fuel real economic growth with indiscriminate credit. You can only fuel it with well-allocated, long-term investment.

Unlike fuel-economy standards, the most common method of reducing demand for oil over the past thirty years, a gas tax doesn't tell people what kind of car to drive. It simply raises the price of gasoline and lets people adjust their behavior accordingly.

If you thought the advent of the Internet, the spread of cheap and efficient information technology, and the growing fragmentation of the consumer market were all going to help smaller companies thrive at the expense of the slow-moving giants of the Fortune 500, apparently you were wrong.

To be sure, if you watch CNBC all day long you'll pick up some interesting news about particular companies and the economy as a whole. Unfortunately, to get to the useful information, you have to wade through reams of useless stuff, with little guidance on how to distinguish between the two.

One of the problems that exacerbates procrastination is the feeling that you have lots of different things to do and no clear sense of which matter more, when they should be done, etc.

One key to successful group decisions is getting people to pay much less attention to what everyone else is saying.

In the business world, bad news is usually good news - for somebody else.

Corporate welfare isn't necessarily a bad thing.

The ban on sports betting does exactly what Prohibition did. It makes criminals rich.

Companies often become victims of their own mythologies.

Speculators get a bad rap. In the popular imagination they're greedy, heedless, and amoral, adept at price manipulations and dirty tricks. In reality, they often play a key role in making markets run smoothly.

Movies' mistrust of capitalism is almost as old as the medium itself.

If companies tell us more, insider trading will be worth less.

The smartest groups, then, are made up of people with diverse perspectives who are able to stay independent of each other. Independence doesn't imply rationality or impartiality, though. You can be biased and irrational, but as long as you're independent, you won't make the group any dumber.

Technological innovation has dramatically lowered the cost of computing, making it possible for large numbers of consumers to own powerful new technologies at reasonably low prices.

When Americans are asked to rank professions in terms of honesty and ethics, insurance agents routinely end up near the bottom of the list - somewhere between politicians and car salesmen. Generally, insurers are seen as clever hucksters who prey on insecurity and ignorance to sell people what they don't need at prices they shouldn't have to pay.

On Wall Street, fraudulent schemes tend to thrive during economic booms, and to blow up when times turn tough.

In confusing stock options with ownership, corporations confuse trappings with substance.

Self-dealing, essentially, occurs when managers run companies to line their own pockets instead of those of the companies' owners. It's been a perennial problem in American capitalism and became a real dilemma when America moved toward a model in which corporations would be run by professional managers who had only small ownership stakes.

This intelligence, or what I'll call "the wisdom of crowds," is at work in the world in many different guises. It's the reason the Internet search engine Google can scan a billion Web pages and find the one page that has the exact piece of information you were looking for. It's the reason it's so hard to make money betting on NFL games, and it helps explain why, for the past fifteen years, a few hundred amateur traders in the middle of Iowa have done a better job of predicting election results than Gallup polls have.

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.

I think there is clearly a connection between free time and procrastination. The more you have of the former, all things being equal, the more likely you are to procrastinate.

The world's central banks and the International Monetary Fund still have vaults full of bullion, even though currencies are no longer backed by gold. Governments hold on to it as a kind of magic symbol, a way of reassuring people that their money is real.

The financial crisis of 2008 was not caused by investment banks betting against the housing market in 2007. It was caused by the fact that too few investors - including all of the big investment banks - bet too heavily on the housing market in the years before 2007.

Nike used to be known as Blue Ribbon Sports. What's now Sara Lee used to be Consolidated Foods. And Exxon was once Standard Oil Company of New Jersey. These were name changes that worked. But for all the ones that do, there are 10 or 20 that don't.

As technology improves, on-screen avatars look more and more like real people. When they start looking too real, though, we pull away. These almost-humans aren't quite right; they look creepy, like zombies.

No decision-making system is going to guarantee corporate success. The strategic decisions that corporations have to make are of mind-numbing complexity. But we know that the more power you give a single individual in the face of complexity and uncertainty, the more likely it is that bad decisions will get made.

In order to work well, markets need a basic level of trust.

Markets work best when there's lots of information available and a historical track record to go on; they excel at predicting things like horse races, election outcomes, and box-office results. But they're bad at predicting things like who will be the next Supreme Court nominee, as that depends on the whim of the president.

The stock market has an insidious effect on C.E.O.s' moods, because of its impact not just on their companies but on their own bank accounts.

Capitalism, after all, is no fun when real failure becomes a possibility.

The business of America shouldn't be subsidizing business.

When all is said and done, cheap gas is an illusion, because our reliance on gas creates a whole series of costs that aren't factored in to the pump price - among them congestion, pollution, and increased risk of accidents.

Making loans and fighting poverty are normally two of the least glamorous pursuits around, but put the two together and you have an economic innovation that has become not just popular but downright chic. The innovation - microfinance - involves making small loans to poor entrepreneurs, usually in developing countries.

The fact that cognitive diversity matters does not mean that if you assemble a group of diverse but thoroughly uninformed people, their collective wisdom will be smarter than an expert's. But if you can assemble a diverse group of people who possess varying degrees of knowledge and insight, you're better off entrusting it with major decisions rather than leaving them in the hands of one or two people, no matter how smart those people are.

From a social point of view, it's beneficial that homeownership encourages commitment to a given town or city. But, from an economic point of view, it's good for people to be able to leave places where there's less work and move to places where there's more.

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

Congressional Republicans themselves have vehemently defended the idea that preexisting conditions should not be used to deny people insurance.

The profit motive, indecorous though it may seem, may represent the best chance the poor have to reap some of globalization's benefits.

In conditions of uncertainty, humans, like other animals, herd together for protection.

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.

In terms of productivity - that is, how much a worker produces in an hour - there's little difference between the U.S., France, and Germany. But since more people work in America, and since they work so many more hours, Americans create more wealth.

The problem is that groups are only smart when the people in them are as independent as possible. This is the paradox of the wisdom of crowds.

Since the Protestant majority in Northern Ireland wants to remain a part of Great Britain, and since Ireland itself has shown little interest in reunification, the IRA's prospects for success through political channels have always been limited.

Of course, presidents are always blamed or rewarded for the state of the economy.

We assume that good-looking people are smarter and more effective than they really are, and that homely people are the reverse.

In industries where a lot of competitors are selling the same product - mangoes, gasoline, DVD players - price is the easiest way to distinguish yourself. The hope is that if you cut prices enough you can increase your market share, and even your profits. But this works only if your competitors won't, or can't, follow suit.

Technology is supposed to make our lives easier, allowing us to do things more quickly and efficiently. But too often it seems to make things harder, leaving us with fifty-button remote controls, digital cameras with hundreds of mysterious features and book-length manuals, and cars with dashboard systems worthy of the space shuttle.

Unlike most government programs, Social Security and, in part, Medicare are funded by payroll taxes dedicated specifically to them. Some of the tax revenue pays for current benefits; anything that's left over goes into trust funds for the future. The programs were designed this way for political reasons.

Academics, who work for long periods in a self-directed fashion, may be especially prone to putting things off: surveys suggest that the vast majority of college students procrastinate, and articles in the literature of procrastination often allude to the author's own problems with finishing the piece.

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

Companies, like people, don't much like to change.

You might think of consumption as a fairly passive activity, but buying new products and services is actually pretty risky, at least if you value your time and money.

Lack of confidence, sometimes alternating with unrealistic dreams of heroic success, often leads to procrastination, and many studies suggest that procrastinators are self-handicappers: rather than risk failure, they prefer to create conditions that make success impossible, a reflex that of course creates a vicious cycle.

Political risk is hard to manage because so much comes down to the personal choices of policymakers, whether prime ministers or heads of central banks.

What the investment community does like is short-term measures designed to boost share prices.

Older people do a better job of managing their impulses, and so they're better able to put off putting off.

Unfortunately, there is something of a flaw in this idealized picture of the way the scientific community discovers truth. And the flaw is that most scientific work never gets noticed. Study after study has shown that most scientific papers are read by almost no one, while a small number of papers are read by many people.

Being unemployed is even more disastrous for individuals than you'd expect. Aside from the obvious harm - poverty, difficulty paying off debts - it seems to directly affect people's health, particularly that of older workers.

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

Framing effects can be very influential, and to the degree that you can think of a task as close rather than distant, you're more likely to actually get it done.

Sometimes you have to destroy your business in order to save it.

In the heart of the Great Depression, millions of American workers did something they'd never done before: they joined a union. Emboldened by the passage of the Wagner Act, which made collective bargaining easier, unions organized industries across the country, remaking the economy.

If being the biggest company was a guarantee of success, we'd all be using IBM computers and driving GM cars.

The desire for reinvention seems to arise most often when companies hear the siren call of synergy and start to expand beyond their core businesses.

The truth is that the United States doesn't need, and shouldn't have, a debt ceiling. Every other democratic country, with the exception of Denmark, does fine without one.

Lower oil prices won't, by themselves, topple the mullahs in Iran. But it's significant that, historically, when oil prices have been low, Iranian reformers have been ascendant and radicals relatively subdued, and vice versa when prices have been high.

Sometimes even a smart crowd will make a mistake.

I do think that procrastination evolved in humans for good reasons. If you're trying to stay alive as a human being on the savanna 20,000 years ago, worrying about what's right behind that bush is a lot more important than worrying about what might happen three weeks from now.

The U.S. is excellent at importing cheap products from the rest of the world. Let's try importing some human capital instead.

The typical American corporation is a shareholders' republic the same way that China is a peoples' republic.

The Xbox 360 is the best game console ever designed. It's fast and powerful - games look as good on the 360 as on high-end PCs that cost six times as much. It's easy to navigate and has lots of useful secondary features - the ability to play digital video, stream MP3s, and so on.

If private-equity firms are as good at remaking companies as they claim, they don't need tax loopholes to make money.

The paradox of Steve Jobs's career is that he had no interest in listening to consumers - he was famously dismissive of market research - yet nonetheless had an amazing sense of what consumers actually wanted.

The history of the Internet is, in part, a series of opportunities missed.

Until the nineteen-seventies, Western countries paid little attention to corruption overseas, and bribery was seen as an unpleasant but necessary part of doing business there. In some European countries, businesses were even allowed to deduct bribes as an expense.

What corporations fear is the phenomenon now known, rather inelegantly, as 'commoditization.' What the term means is simply the conversion of the market for a given product into a commodity market, which is characterized by declining prices and profit margins, increasing competition, and lowered barriers to entry.

Defense contractors are able to reap tremendous profits while rarely confronting the risks for which those profits are supposed to be the reward.

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

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.

Developing countries often have hypertrophied bureaucracies, requiring businesses to deal with enormous amounts of red tape.

Punk rock has never really had much patience with musical virtuosity. Actually, it'd be more accurate to say that for most of its history, punk has been actively hostile to virtuosity.

Moviegoers love the intricacies of a crime all the more when it's for a good cause.

Auto repair, piloting, skiing, perhaps even management: these are skills that yield to application, hard work, and native talent. But forecasting an uncertain future and deciding the best course of action in the face of that future are much less likely to do so. And much of what we've seen so far suggests that a large group of diverse individuals will come up with better and more robust forecasts and make more intelligent decisions than even the most skilled "decision maker."

Patrimonial capitalism's legacy is that many people see reform as a euphemism for corruption and self-dealing.

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.

If army ants are wandering around and they get lost, they start to follow a simple rule:Just do what the ant in front of you does. The ants eventually end up in a circle. There's this famous example of one that was 1,200 feet long and lasted for two days; the ants just kept marching around and around in a circle until they died.

The Internet has become a remarkable fount of economic and social innovation largely because it's been an archetypal level playing field, on which even sites with little or no money behind them - blogs, say, or Wikipedia - can become influential.

The challenge for capitalism is that the things that breed trust also breed the environment for fraud.

When Americans think of college these days, the first word that often comes to mind is 'debt.' And from 'debt' it's just a short hop to other unpleasant words, like 'payola,' 'kickback,' and 'bribery.'

Steve Jobs was rare: a C.E.O. who actually had a huge impact on his company's fortunes. Contrary to corporate mythology, most C.E.O.s could be easily replaced, if not by your average Joe, then by your average executive vice-president. But Jobs genuinely earned the label of superstar.

Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromising. An intelligent group, especially when confronted with cognition problems, does not ask its members to modify their positions in order to let the group reach a decision everyone can be happy with. Instead…the best way for a group to be smart is for each person in it to think and act as independently as possible.

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

In practice, downsizing is too often about cutting your work force while keeping your business the same, and doing so not by investments in productivity-enhancing technology, but by making people pull 80-hour weeks and bringing in temps to fill the gap.

In American politics, 'Europe' is usually a code word for 'big government.'

What an economy really wants, after all, is not more investment per se but better investment. It wants capital to flow to companies that will create value - not in the form of a rising stock price but in the form of more goods for less cost, more jobs, and rising wages - by enhancing productivity.

Publishers, naturally, loathe used books and have developed strategies to depress the secondhand market. They bring out new, even more expensive editions of popular textbooks every three to four years, in a classic cycle of planned obsolescence.

Tough times have always lent themselves to nativist sentiments and closed-door policies. But in the case of highly skilled immigrants these policies are a recipe for stagnation.

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.

Flexible supply chains are great for multinationals and consumers. But they erode already thin profit margins in developing-world factories and foster a pell-mell work environment in which getting the order out the door is the only thing that matters.

Workers who come to the U.S. see their wages and their standard of living boosted sharply simply by crossing the border. That's a good thing, and one of the best arguments for immigration reform, even if you'll rarely hear a politician make it.

The reason advertising is governed by fear, after all, is that most agencies rely on just a few clients to bring in the lion's share of their revenues.