James Surowiecki Quotes

Independence is important to intelligent decision making for two reasons. First, it keeps the mistakes that people make from becoming correlated. Errors in individual judgment won't wreck the group's collective judgment as long as those errors aren't systematically pointing in the same direction. One of the quickest ways to make people's judgments systematically biased is to make them dependent on each other for information.

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.

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.

Discussions of health care in the U.S. usually focus on insurance companies, but, whatever their problems, they're not the main driver of health-care inflation: providers are.

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.

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

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

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

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.

Being out of a job can erode people's confidence and their sense of possibility; and employers, often unfairly, tend to take long-term unemployment as a signal that something is wrong.

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

It may be, in the end, that a good society is defined more by how people treat strangers than by how they treat those they know.

Medical tourism can be considered a kind of import: instead of the product coming to the consumer, as it does with cars or sneakers, the consumer is going to the product.

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.

The business of America shouldn't be subsidizing business.

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

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.

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.

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

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

Wall Street has come a long way from the insider-dominated world that was blown apart by the Great Depression.

I typically don't adopt the ascetic approach. In part, that's because I do use the Net for research even as I'm writing (to check facts, or so on). But I think it's also because I find the possibility of distraction comforting.

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.

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 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.

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.

In the days when corporate downsizing was all the rage, Wall Street took a lot of flak for judging companies too harshly and setting the bar for corporate performance so high that executives felt their only option was to slash payrolls.

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.

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

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.

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 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.

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.

Groups that are too much alike find it harder to keep learning, because each member is bringing less and less new information to the table. Homogeneous groups are great at doing what they do well, but they become progressively less able to investigate alternatives.

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.

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.

Addictive behavior is kind of the inverse of procrastination: procrastination is about not being able to do what you want to do, addiction about not being able to not do what you don't want to do (drink, use drugs, etc.)

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.

Most of the work on multitasking suggests that it generally makes you less efficient, not more.

In effect, dividing your attention means that neither (or none) of the things you're working on is really getting the full effect of your intelligence, and that it in the end takes you longer than it would if you did one thing at a time.

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

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.

Disasters redistribute money from taxpayers to construction workers, from insurance companies to homeowners, and even from those who once lived in the destroyed city to those who replace them. It's remarkable that this redistribution can happen so smoothly and quickly, with devastated regions reinventing themselves in a matter of months.

For most Americans, work is central to their experience of the world, and the corporation is one of the fundamental institutions of American life, with an enormous impact, for good and ill, on how we live, think, and feel.

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.

There's no debt limit in the Constitution.

A general principle of good taxation is that similar jobs, and similar kinds of compensation, should be taxed the same way: otherwise, the government is effectively subsidizing some jobs over others.

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 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.

If you work for Google or Apple, stock options give you a chance to share in the increasing value of the company. In the N.F.L., nothing like this happens; the players, though rich, are just working stiffs like the rest of us.

Meeting external deadlines is much harder than meeting internal ones. On the other hand, internal deadlines sometimes don't feel real, and are therefore easy to evade.

Under the right circumstances, groups are remarkably smart - smarter even sometimes than the smartest people in them.

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.

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.

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.

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.

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.

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.

Companies have long gathered data to break down their customer base into specific segments. Now political parties have become adept at micro-targeting, too, using data on shopping habits, leisure activities, voting histories, charity donations, and so on, in order to pinpoint likely supporters and the type of appeal most likely to win them over.

Besides great climates and lovely beaches, California and Greece share a fondness for dysfunctional politics and feckless budgeting.

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.

Life insurance became popular only when insurance companies stopped emphasizing it as a good investment and sold it instead as a symbolic commitment by fathers to the future well-being of their families.

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

Behavioral economists have shown that a sizable percentage of people are willing to pay real money to punish people who are taking from a common pot but not contributing to it. Just to insure that shirkers get what they deserve, we are prepared to make ourselves poorer.

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.

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.

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

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.

I think people don't understand compound interest because typically no one ever explains it to them and the level of financial literacy in the US is very low.

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

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

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.

Of course, politicians always say they're just describing their opponents' positions, even if they are in fact offering absurd caricatures, if not outright lies.

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

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

If someone really wants my company's business, why shouldn't he be able to do everything he can - including paying me off - to get that business? Because bribery encourages people to make decisions based on the wrong criteria, which means in the business world that it distorts the efficient allocation of resources.

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

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.

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.

Companies often become victims of their own mythologies.

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

There does seem to be some evidence that as people get older, they procrastinate less, perhaps because they feel the pressure of time more.

Traditionally, tours were a means of promoting a record. Today, the record promotes the tour.

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.

The fact that industries wax and wane is a reality of any economic system that wants to remain dynamic and responsive to people's changing tastes.

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

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.

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.

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.

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

I do think to some extent multitasking is a way of fooling ourselves that we're being exceptionally efficient.

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

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

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.

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.

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

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.

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.

The basic idea here is that for most people will power is a limited resource: if we spend lots of energy controlling our impulses in one area, it becomes harder to control our impulses in others. Or, as the psychologist Roy Baumeister puts it, will power is like a muscle: overuse temporarily exhausts it.