Applying the Information Theory to COVID-19

Promising examples inside… [Gilder's Daily Prophecy] April 21, 2020 [UNSUBSCRIBE]( | [ARCHIVES]( Video Message From George Gilder [Gilder](One of George Gilder’s colleagues thinks he’s discovered the real scandal behind what he calls an “outsider trading” scandal…  [A “glitch” caused by Wall Street’s machines and algorithms.](  But once you discover the simple way to exploit this glitch… you could have the chance to pocket $1,458… $5,000… and even $6,475…  Sometimes in as little as a week’s time… sometimes even in a single day.  George sat down and recorded [a special message about it here.](  But time is of the essence… this page will be pulled down at 9:30 tomorrow morning.  [Click here to watch George’s message.]( Applying the Information Theory to COVID-19 [George Gilder]Dear Daily Prophecy Reader, “Wealth is knowledge, growth is learning, and money is time.” Those are the assumptions behind most of my prophecies here. But what do these ideas have to do with the coronavirus? What I call the “viral new–mania.” I’ll get to that. In four books, I explain the theory behind these three assumptions about wealth, growth, and money. The payoff is an information theory of economics that applies to industrial and commercial events the axioms that Claude Shannon expounded in 1948 as a theory of communications. From defining the bit and byte and the concepts of channels and codes, to the framing of information as surprise and “entropy,” Shannon’s theory and mathematical matrix underlies much of modern network and computer technology. I extend it from technology to the economic system that produces it. I treat economic activity as information proceeding down a channel in the presence of noise and defined by its surprising content or “news,” measured as “entropy” or unexpected bits. The key to growth is entrepreneurial creativity. As Princeton’s Albert Hirschman wrote: “Creativity always comes as a surprise to us. If it didn’t, we wouldn’t need it, and planning [socialism] would work.” At the heart of the information theory of economics is the measurement of both information in a message and creativity in an economy by their degree of surprisal or degrees of freedom. America’s #1 Futurist George Gilder’s 2020 Prediction Will Stun You �€œWe’re headed for a potential [$16.8 trillion reboot](,” he says. This “reboot” could create the largest wealth generation in decades. And it has nothing to do with politics, the pandemic, or the Fed. [Click this link]( to see how to tap into this wealth revolution and learn how it could make you very…very…rich. Diamonds are Formed Under Pressure A test of any new theory is how it works in a crisis. Today, the political order has clearly made a crisis out of a virus. Barron’s columnist Randall Forsyth depicts the effects as a “Historic Economic Crisis,” asking “Could GDP fall 40%?” Gee, who knows what the conventional economic data will say? Since government spending is part of GDP and governments are “spending” orgiastically, perhaps GDP could understate the real damage. With airline flights down 95% and much of retailing closed, the private sector may be suffering a nominal contraction even more severe than the estimates. The information theory tells us, however, that the only enduring effects are a loss of knowledge and a suppression of learning. A temporary suspension of activity may shut down shops without appreciably impairing the stores of knowledge in the economy. Compensating for the restriction of learning from existing projects and enterprises may be new exigencies of learning impelled by the medical crisis. Valuable learning (real economic growth) may well come from the process of developing vaccines and other remedies for the virus attacks that have afflicted humans throughout our history. Drone technology and other delivery methods are advancing faster in the face of the restaurant and retail shutdowns. The need to summon quick and effective responses to threats of disease and even bio war will spur machine learning and artificial intelligence. A promising example is Google’s use of machine learning to calculate protein folds in AlphaFold. In addition, The Scientist reports on a recent exaflop (10 to the 18th floating point operations per second) boom in the computations of Folding@Home. Launched by Stanford University chemistry professor Vijay Pande, it is a platform for the crowdsourcing of computer power for the calculation of protein folds, needed for the development of vaccines for the coronavirus. Harvesting unused compute power from graphics processors in gaming machines and laptops, Folding@Home participation surged from 30,000 in February to 400,000 in March and has since increased by a further 300,000, according to [Ars Technica](. It now has a peak performance of 1.5 exaFLOPS, making it seven times faster than the world’s most powerful supercomputer. From Zoom to Kahn Academy to Fold@Home, much of the population has found itself learning how to use the new communications and conferencing tools of the internet. Closing the schools and colleges was a mistake because it retarded the spread of viral “herd immunity” among non–vulnerable young people. But the economy may benefit if online education and home schools relieve millennials “herd immunity” to reason and common sense and release their creativity on the frontiers of the new economy. If knowledge and learning are not halted by the crisis, what happens to money as time? Nearly all the huge declines of income and GDP reflect disorders and losses of time. Rents, mortgages, fixed costs, debts and bonds all are governed by time. The commitments all assumed that economic time would not stop — that governments would enforce contracts and property rights rather than nullify them. Government surprises undermine the low entropy carriers that enable high entropy creativity in enterprise. Capricious government guarantees of private sector outcomes — "picking winners” — attempt to make certain and predictable what is intrinsically uncertain: entrepreneurial creativity. Meanwhile, these exertions of government power render uncertain and surprising what should be regular and reliable: the rule of law. Today’s Prophecy The lockdown was a shocking exercise of capricious governmental power. Thus, trillions of dollars in various stimuli and insurance payments might represent a reasonable compensation for its high entropy intervention. But stealing time from the future can work only if people believe that growth will return and even accelerate and thus ensure that the debts can be repaid. That depends on low entropy carriers — regularities of law and order that enable resumption of the surprises of creativity and learning. Manipulation of interest rates by central banks ignores the role of information and surprise in economic advance. Interest rates represent the average return on the assets of the economy, but offer only crude guidance to entrepreneurs seeking the surprising returns of profit. Entrepreneurial profit is information entropy rather than the average or blended return of a controlled interest rate. The information theory suggests that real growth and wealth have not suffered in the crisis. Investors should not assume that this crash is comparable to the crash of 2008 when an eclipse of entrepreneurial knowledge rendered many banks and their securities opaque. The impact of this year’s virus crisis has focused on money as time. Therefore, economic revival should be swift and sure when the crisis ends. Investors should be alert to the likelihood of a boom ahead as the viral new–mania abates and entrepreneurship takes off. Regards, [George Gilder] George Gilder Editor, Gilder's Daily Prophecy P.S. Speaking of crisis… One of my colleagues made a discovery a while back, one that I'm calling an “outsider trading” scandal. It's a “glitch” caused by Wall Street’s machines and algorithms, and once you exploit these “glitches” you could have the potential to see gains of $1,458, $5,000, and even $6,475. Some in as little as a week’s time... Sometimes in as little as a day. I recorded a special message to talk more about it. [Click here to learn more about what I call the “outsider trading” scandal.]( Are You Ready for the Great Depression of 2020? [Gilder](According to some economists we’re already in a recession… But now a former CIA and Pentagon advisor is saying this is just the beginning of something much, much worse. And he’s urging Americans to take these FIVE STEPS to protect their wealth and their loved one. 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