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

Businesses that have gone through an episode of hyperinflation become understandably alert to the threat of it: at the first hint of inflation, they're likely to increase prices, since they've learned that if they don't, and inflation hits, their businesses will be wrecked.

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

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

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.

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.

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.