Why Information Grows: The Evolution of Order, from Atoms to Economies
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So what makes our planet special is not that it is a singularity of matter or energy, but that it is a singularity of physical order, or information.
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Ernst Mach, maintained that science should focus only on relationships among directly observable quantities. Additional theoretical constructs, like Boltzmann’s atoms, were not allowed.
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During the Second World War competing armies developed a need to communicate using secret codes. These codes motivated efforts to decode intercepted messages, jump-starting the mathematical study of information.
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Mathematicians continued to formalize the idea of information, but they framed their efforts in the context of communication technologies, transcending the efforts to decipher intercepted messages. The mathematicians who triumphed became known as the world’s first information theorists or cyberneticists.
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Information was neither microscopic nor macroscopic.3 It could be inscribed sparsely on clay tablets or packed densely in a strand of DNA.
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as the idea of information became more popular, we slowly began to forget about the physicality of information that had troubled Boltzmann.
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Humans, and some machines, have the ability to interpret messages and infuse them with meaning. But what travels through the wires or electromagnetic waves is not that meaning. It is simpler. It is just information.
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Meaning is the interpretation that a knowledge agent, such as a human, gives to a message, but it is different from the physical order that carries the message, and different from the message itself.
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Information, when understood in its broad meaning as physical order, is what our economy produces. It is the only thing we produce, whether we are biological cells or manufacturing plants. This is because information is not restricted to messages. It is inherent in all the physical objects we produce: bicycles, buildings, streetlamps, blenders, hair dryers, shoes, chandeliers, harvesting machines, and underwear are all made of information.
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out-of-equilibrium systems, the accumulation of information in solids, and the ability of matter to compute. Together these three mechanisms contribute to the growth of information
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Cities, firms, and teams are the embodiment of the pockets where our species accumulates the capacity to produce information.
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According to Claude Shannon, the father of information theory, information is a measure of the minimum volume of communication required to uniquely specify a message.
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In Boltzmann’s definition of entropy, entropy is the multiplicity of equivalent states;
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entropy, even though commonly associated with disorder, is not exactly a measure of disorder.
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entropy can increase without increasing disorder.
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The entropy of the gas increases with the size of the box because there are more ways in which we can arrange the gas particles in a larger box. Yet the gas in the larger box is not more disordered than the one in the smaller box.
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Shannon was concerned with communicating the microstate of a system, such as an individual tweet or the arrangement of people sitting in our hypothetical stadium, so he equated information with entropy (often using those words as synonyms).
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In a physical system, information is the opposite of entropy, as it involves uncommon and highly correlated configurations that are difficult to arrive at.
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the irreversibility of time is connected to a universal march from order to disorder.
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systems composed of many particles tended toward states that had as little information as possible. This is what is known as the second law of thermodynamics,
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As time goes by, the universe moves from rare configurations to common ones,
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The energy of the sun and the nuclear decay taking place in the Earth’s core drive our planet out of equilibrium, providing the energy required for information to emerge.
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Prigogine showed that the steady states that matter reaches in systems that are out of equilibrium tend to be organized. After chaos there is information.
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out-of-equilibrium systems self-organize into steady states in which order emerges spontaneously, minimizing the destruction of information.
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by combining the ideas of Prigogine and Schrödinger, we can understand where information comes from (the steady state of non-equilibrium systems) and why it sticks around (because it is stored in solids).
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For information to truly grow, the universe needs one more trick. This is the ability of matter to process information, or the ability of matter to compute.
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Highly interacting out-of-equilibrium systems, whether they are trees reacting to the change of seasons or chemical systems processing information about the inputs they receive, teach us that matter can compute. These systems tell us that computation precedes the origins of life just as much as information does.
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Life is a consequence of the ability of matter to compute.
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the universe has some tricks up its sleeve that allow information to emerge in well-defined pockets. These are pockets where free energy is abundant, but also where the range of temperatures is mild enough for solids to exist, as information lasts longer when preserved in solids.
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Inadequate institutions and technologies can trample our ability to form the networks we need to accumulate knowledge and knowhow, limiting the rate at which we can make information grow.
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Economic development is not the ability to buy but the ability to make.
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Hugh and Ed are considered special not because they had the “idea” of robotic limbs or brain-computer interfaces but because they are carving the path through which these fantasies are becoming a reality.
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it is common for people to confuse the value of products with the value of the knowledge and knowhow needed to make them, or to confuse knowledge and knowhow with ideas.
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the economy is the collective system by which humans make information grow.
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markets do not make us richer but wiser, since they produce wealth as long as they give us indirect access to the practical uses of the knowledge and imagination that our species has been able to accumulate.
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the knowledge amplification powers of the economy are essential to liberate the creative capacities that allow our species to create new products—which
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This division of knowledge and knowhow, not just labor, is what endows networks of people with fantastic capacities,
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even though the information available in books can help us speed up the accumulation of knowledge and knowhow, knowledge and knowhow are not present in books.
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The social nature of learning makes the accumulation of knowledge and knowhow geographically biased. People learn from people,
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At the individual level, the experiential and social nature of learning slows down the accumulation of knowledge and knowhow.
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The idea of scale economies is that the per-unit cost of items decreases as we make more of them.
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When the external transactions become less costly than the internal transactions, firms stop growing, since it is better for them to buy things from the market than to produce these internally.
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Extreme bureaucracy generates large networks connecting many people but few personbytes.
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the complexity of computers, which encompasses not just hardware but software and online services as well, requires the existence of networks of firms.
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In the case of health care, an inverse relationship between the administrative burden and the quality of care has been documented, suggesting that an excess of management and administration is not helping these networks improve their ability to put knowledge and knowhow to good use.
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accumulating large volumes of knowledge and knowhow is difficult because it requires evolving the networks that embody that knowledge and knowhow.
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an understanding of human networks based solely on economic considerations is incomplete.
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our interactions, even those that are professional, are constrained by whom we know and by the slow dynamics of relationship building.
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The view of labor markets that twentieth-century economists grew accustomed to, however, was one in which preexisting social networks did not play a role. Instead, labor allocation was assumed to be the result of supply and demand forces that drove labor markets to equilibrium as wages communicated information about the excess supply and demand of the skills needed by each firm and those embodied in each worker.
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Granovetter observed that preexisting social networks, rather than market forces, were the primary means by which people found jobs.
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