At Forbes.com, Jerry Bowyer interviews George Gilder on his new book Knowledge and Power (HT: AOI Observer). The long Q&A, titled “George Gilder Has A Very Big, Economy Boosting Idea” is very much worth a read. Here’s a snip:
Jerry: “So the market system is the operating system at best, but it’s not the user. That the entrepreneur uses an operating system called the market economy: there’s hardware to it, there’re rails and canals and buildings and factories; there’s software to it, in the sense that there’s operating system software equivalent to DOS or Windows or Linux or whatever, but that thing just lies there dormant until a user sits down at the keyboard and starts changing things, and that user’s the entrepreneur.”
George: “That’s right. And those operating systems themselves in turn were generated by other inventors and entrepreneurs and programmers. Every logical scheme and every machine requires an oracle, as Turing put it. The only thing Turing could say about that oracle, and he italicized it, is that it cannot be a machine. A machine is an orderly system, and all information is disorder; it’s disruption; it’s surprise.”
Jerry: “So, the basic operating system or the machine or whatever you want to call it, it has to have an order precisely so you can identify it, precisely so that you can filter it out so you can see the signal.”
George: “That’s right. That’s exactly true. The way they put it in Information Theory is to say that it takes a low-entropy, no-surprises carrier to bear high-entropy, surprising content. Any influence from the carrier to the content is called ‘noise’. In an economy, that low-entropy carrier is constitutional government, and contract law, and the rules of the road as Hayek defined them. Property rights are absolutely indispensable, they’re essential.”
Jerry: “Stable family?”
George: “Stable families are a further crucial institution that project the economy into the future. Without stable families, people aren’t oriented toward a long-term future embodied in children.”
Jerry: “So, is the problem with progressive ideologies that they want to introduce the change, the dynamism of society, into the carrier instead of into the signal?”
George: “That’s right. That’s a very good way to put it. It’s not precisely in those terms but that’s a good summation of the theme of Knowledge and Power. One of the themes is that the illegitimate effort of lawyers and politicians to manipulate the law in order to advance their own interests is a kind of cancer of capitalism. When entrepreneurship is addressed not to falsifiable experiments of enterprise but to guaranteed ventures of law and political power, that’s the great disorder of our time.”
