Seeing China through the Lens of the Information Theory of Economics

Learning and surprise is what drives growth, not government planning [Gilder's Daily Prophecy] March 11, 2021 [UNSUBSCRIBE]( | [ARCHIVES]( The EV Story Nobody's Talking About? [money arrow]( is reporting, "Tesla Rallies as Investors Welcome All-at-Once S&P 500 Debut." And The Wall Street Journal is calling their S&P 500 news a "Game Changer." But there may be one key piece of the Tesla story the media isn’t covering… And according to our research, if they announce a partnership, as one leading technologist expects… It could deliver gains of up to 1,000% in the next 3 months! [Click here now to get more urgent details before it’s too late.]( [Warning] Do you enjoy receiving Gilder's Daily Prophecy? Please [Click Here Now]( so we know to continue sending you Gilder's Daily Prophecy for free! Seeing China through the Lens of the Information Theory of Economics [George Gilder]Dear Daily Prophecy Reader, As I and my colleague Richard Vigilante have explained in previous Prophecies, baseless is the myth that the Chinese government planned or directed the astonishing rise of the Chinese economy after the death of Mao. Capitalism grew up in China before the government knew what was happening. Chinese capitalism does owe an enormous debt to the great Deng Xiaoping, along with Reagan and Netanyahu among the greatest statesmen of the latter 20th century. But Deng’s accomplishment had nothing to do with planning. Quite the opposite, he resolutely refused to plan, or even to claim, that he, or anyone, could program the future. Deng’s great accomplishment was that he became a convert to what we would call the “information theory of economics,” though he never used the term. In information economics, we recognize that all economic growth is the result of learning, rather than the accumulation of material goods. Lessons from Neanderthal’s For the first law of the Information Theory of Economics, I have often quoted Tom Sowell’s lapidary apercu, “The Neanderthal in his cave had all the same natural resources as we do. What distinguishes our age from the stone age is entirely the growth of knowledge.” That neanderthal lacked the knowhow to turn those resources into wealth. Centuries of learning — much of it in the past two centuries — account for all the difference between his world and ours. Deng was a young leader in the Chinese civil war won by the Communists in 1949. He swiftly rose in the Party leadership. Then came the formative event of Deng’s career. He was being deposed from the Chinese leadership during the Cultural Revolution. He was ostracized, arrested, and condemned to “reeducation” including years of service as a manual laborer. These punishments, however, were not the key to what Deng learned. The key was the nature of the cultural revolution itself. For more than a decade, the Cultural Revolution represented the triumph of ideology over information. When ideology rules, as we are seeing at home today with COVID and climate delusions, fact and argument lose their power. Careful adherence to slogans and politically acceptable speech replace public debate. Such programmed speech is the opposite of information. As my readers know, only the surprising, the unexpected counts as information. No message that could be readily predicted by the receiver adds to our knowledge. Ideologically dictated speech holds no surprises. The whole point of political correctness is to adhere to the approved script. Perhaps at first because he suffered so deeply from the Chinese version of political correctness, Deng came to see what a disaster the political suppression of information was for China. The Chinese people were starving because the Chinese economy was starved for information. In the face of ideology learning was impossible. [Biggest innovation since the Internet]( These weird devices are about to appear all over America [computer chip]( to America’s top tech futurist – dubbed the “Tech Prophet” by Forbes – millions of these strange little devices are about to appear in every corner of our country… including your home. What are they? And why did one tech insider with connections to Apple and Microsoft claim they’ll “rewrite the rules of what’s possible?” [Find out more right here.]( [This Government Ruling could change your life forever]( The Next Great Slogan Rehabilitated shortly before Mao died, Deng found himself in the inner circle of Chinese leadership after the Gang of Four was dispatched. He began to preach a new vision of a learning-based economy, but carefully couched in socialist rhetoric. The points he made would have seemed almost trivial, absurdly obvious in the West at the time. His first great slogan was “seek truth from facts.” This he could portray as Maoist, because Mao had once used the phrase, however hypocritically. By facts he meant very specifically the results of practical experiment. Boldly he confessed to his colleagues, his nation, and the world, that neither he nor anyone in the Party knew how to run a modern economy, therefor experiments were in order. His next great slogan at first blush seems anti-information. He proclaimed “no debate.” What he meant though was that solutions would not be discovered via the endless, onanistic debates of politburo ideologues. Don’t debate to death the question of what is “more Marxist” or more “Maoist.” Try things. Try many things. See what works. It was this empirical approach — in defiance of the top-down dictates of state capitalism — that gave the peasants room to maneuver. They learned to try experiments that, though still technically illegal, gained political protection from the spirit of experimentation propagated by Deng. This spirit cannot be found in the official legislation or even party resolutions of the them, which relentlessly urged state ownership and denounced private enterprise. Today’s Prophecy Deng’s revolution, though opposite in spirit to the revolution from which he had suffered, had this in common: they were both essentially cultural revolutions, not legal programs. The law was always catching up with the peasants and the town entrepreneurs, never leading. And that is China’s main competitive advantage over the US today. In the economic realm at least, Chinese culture has blossomed while our has declined. The Chinese advantage derives not from stealing our technology but from imitating our culture while we have been abandoning it. In 1978 while Deng was coming to power, “seek truth from facts” was so ingrained in American life that we could hardly see an alternative. Today our own cultural revolutionaries increasingly forbid it. That is why, regardless of what the American sages and economists may claim in their delusions of a continuing American rationality, why we are falling behind China. In America, we have called in the clowns of ideology and correctitude. We have allowed the Biden gang of pronoun mutants in masks to rob the central bank. We now worship the clowns and imitate their masks. In China, they still, very privately, laugh at them. Regards, [George Gilder] George Gilder Editor, Gilder's Daily Prophecy [Richard Vigilante] Richard Vigilante Senior Analyst, Gilder's Daily Prophecy 04ghd74j - 3b95 - dt38 - 43vg - g7sp38gt [code]( this 32-digit code? While it’s just for illustrative purposes, it’s the prototype for a brand-new digital infrastructure that is set to replace the “old internet” as we know it. Act now to be early on the “new internet”… [Continue Reading >>]( [Three founders Publishing]( To end your Gilder's Daily Prophecy e-mail subscription and associated external offers sent from Gilder's Daily Prophecy, feel free to [click here](. If you are having trouble receiving your Gilder's Daily Prophecy subscription, you can ensure its arrival in your mailbox by [whitelisting Gilder's Daily Prophecy](. Gilder's Daily Prophecy is committed to protecting and respecting your privacy. Please read [our Privacy Statement.]( For any further comments or concerns please email us at GildersDailyProphecy@threefounderspublishing.com. Three Founders Publishing, LLC. 808 Saint Paul Street, Baltimore MD 21202. Nothing in this e-mail should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after online publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. © 2021 Three Founders Publishing, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Three Founders Publishing, LLC. EMAIL REFERENCE ID: 401GDPED01