Information is Surprise; Wealth is Knowledge

listen to George Gilder

There’s an interview with Wealth and Poverty guy George Gilder up at Epoch Times. You can listen to the podcast or read the text: I’m a reader guy.

In the interview Gilder recycles his basic ideas. I read the interview because Gilder’s ideas are difficult and I’m not sure that I understand them.

For instance: Information is Surprise. What does that really mean?

The key proposition [in information theory] that emerges is that information is surprise. It’s unexpected bits. That’s how Shannon defined it. If everything I say today you already understand, no information is being communicated. The principle that information is surprise is fundamental to the computer age.

In the old days, information was imposed upon an analog tone.

Plus:

[People] imagine that information is some determinist expertise, a science, as if science can predict the future. But the great insight of capitalism and of free economies is to accommodate surprise, entrepreneurial surprise. Human creativity always comes as a surprise to us. If it didn’t, we wouldn’t need it, and socialism would work, planning would work.

You can apply that to vision. Your eyes are processing billions of bits of information every moment. Information is the unexpected movement detected by the corner of your eye. Perhaps a humming-bird darting out of nowhere, or a sabre-toothed tiger about to pounce on you. That’s information.

Next step: Wealth is Knowledge.

That Neanderthal in his cave, as Thomas Sowell pointed out years ago, had all the physical resources we have today. All the difference between our age and the Stone Age is the growth of knowledge.

Next step: Economic Growth is Learning.

[It’s the learning curve.] The most fully established principle in business strategy is that with every doubling of total units sold, costs drop between 20 and 30 per cent in all fields, whether it’s poultry, eggs, microchip transistors, lines of software code, or trucking miles, it doesn’t matter. The learning curve is absolutely essential.

Finally: Money is Time.

When everything else grows abundant, and I believe we live in a world of super abundance now, what remains scarce is time, those hours and minutes we spend to earn the money to purchase goods and services. The real foundation of value is time.

Got that? Here’s the wrap-up.

So, wealth is knowledge, growth is learning, money is time, and information is surprise. And those principles apply in biology, and also in cryptography, which is another great theory that Claude Shannon developed during the war. His cryptography system was suppressed and classified during the war.

Yeah. The one thing we forget to do first time out was to encrypt the internet.

And so, when they built the internet, they built it on his information theory, but without his foundation in cryptography. That’s what we’re trying to restore today in a new global internet with a blockchain support[.]

This all applies to the current flap about AI. If AI is just recycling data and serving up the conventional wisdom then it isn’t generating information. But if it does something new, that is information. Or it might be a mistake: disinformation.