In late December, George Gilder’s blog had an excerpt from his January Gilder Report: “Law Number One of the Telecosm“. to assist those who aren’t subscribers of Gilder, Forbes published all ten of Gilder’s laws.
I liked Gilder’s citation of Claude Shannon, who defined information in terms of surprise – the change from the normal state. Of course, when you stop to think about it, that is precidely the principle behind compression algorithms.
Gilder extends this to say that in networking, the carrier needs to be predictable to permit the information to be distinguished from noise.
The heart of capitalism is creativity. Creativity, as Albert Hirshmann of Princeton once wrote, always comes as a surprise to us. If it didn’t we would not need it. Socialism would work. But the upside surprises of creativity require a low entropy environment of predictable property rights, taxes and other business laws ultimately based on trust in a moral order. All these conditions are essential to an entrepreneurial economy.
An interesting article – with observations certain to provide fodder for coffee-time chats this week.