Most Americans don’t understand economics. And they don’t understand it because it is boring. Economics has been labeled the “dismal science” mainly because so many economists have turned the drama of human entrepreneurship into a series of stock phrases, statistic equations, and nonsensical memes.
In his new book, Knowledge and Power, economist and philosopher George Gilder liberates capitalism from the chains of economic jargon. Capitalism, he writes, is not about supply and demand or command and control: it is about information. More specifically, it is about surprise – new information being added to the system, changing it in mind-bending and stupefying ways. The term “information theory” is drawn from the world of technology, Gilder explains: “information is not order but surprise….[information] is entropy. It is disorder, deformations of order, disruptions of equilibrium. It is indeterminism and surprise. And entropy is freedom of choice. This insight is at the heart of the information theory of capitalism.”
Most economists focus almost entirely on the conditions of equilibrium: how do we achieve full employment? How do we prevent recessions? How can government intervene in the economy to help certain segments of the market?
But this is the opposite of how economics should work. Both on the right and on the left, everyone focuses on the system, rather than on providing the stability in structure that allows free radicals to change the world. The heroes of this vision are either consumers, on the one hand, or no one, on the other.