The real magic of folksonomies–and the reason sites like del.icio.us can create so much value with so little hired labor–is that they require no effort from users beyond their local work of tagging pages for themselves. It just happens that the by-product of that work is a very useful system for organizing information. This distinguishes del.icio.us from other high-profile Web 2.0 sites like Wikipedia and Digg, which people contribute to without reaping any obvious personal benefit.

Schachter thinks the fact that del.icio.us does not rely on the selflessness of its users makes it more robust than it might otherwise be. “Im not a big believer in expecting a large number of people to act in an altruistic fashion,” he says. “You want to rely on people to do what they do.” The echoes of Adam Smith are unmistakable: del.icio.us is a system that, like a healthy market, turns individual self-interest into collective good.

Del.icio.us now has more than 300,000 registered users, and it generates as much traffic in a single day as it did in its entire first year. But even as tagging has become an industry buzzword that businesses are straining to associate themselves with, Schachter is confronting the fact that the vast majority of people on the Web don’t tag at all–and probably have never even heard of tagging. So how does he expand his sites audience? “You have to solve a problem that people actually have,” Schachter says. “But it’s not always a problem that they know they have, so that’s tricky.” He remains more focused on the site’s value to the individual than on its folksonomic aspects, because to him, helping individuals store and recall information is far more important than classifying the Web. And it may well be individual value that’s most likely to keep del.icio.us growing.

Regardless of what happens, Schachter has already shown that out of the seeming chaos of hundreds of thousands of independent and eccentric judgments, order and wisdom can emerge. And if you think about del.icio.us in terms of his idea of making memory scalable, he’s also helped create a rather remarkable social memory system, in which all of us are able to find more and better information than we would on our own. As Schachter puts it, “The one who stashes a page doesn’t have to be the one who ends up recalling it. Del.icio.us is a storer of one’s own attention. But it also means you can share it with others.” And that ability will only become more valuable over time. “The better you understand the world, the better you’ll do,” Schachter says. “I really think that in the end, more understanding wins.”