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Showing 1-10 of 108 reviews(Verified Purchases). See all 132 reviews
on October 20, 2013
The old paradigm of economic growth can be summed up as the combination of population (labour) growth and labour productivity growth. Invention, innovation, organizational change, and regulation, were all embodied in the productivity component in this old model. This component was exogenous to the model, and does not provide an endogenous explanation of growth.
I was hoping that the incorporation of information theory within the growth model would start to address this shortcoming of exogenous productivity. Shannon had a metric for measuring the information content within a communication. One can think of a trend line for a statistical series as an attempt to separate the signal (information) from the noise in a statistical series. I thought Gilder might extend these ideas. The book did not take this tack.
The statement in the book, that production was really a rearrangement of more basic material elements within the world, rather the creation of something new, is suggestive. The imagery that production is the first layer in a multi-layer process, and that invention, innovation, and creative thought, are in a higher level, starts to provide an insight as to how these creative processes might work; namely focusing on the production level and consciously thinking of new ways to provide the same product, or rearrange the material elements of an existing product, to serve a new purpose. The development of this line of thinking might facilitate more innovation.
The demographic trends in developed countries will not support higher standards of living without substantive productivity gains.
Current trends in productivity growth are unlikely to offset the foreseen demographic decline in labour supply.
We need more effective methods of fostering productivity to counter the above scenario.
I was hoping that Gilder would provide some insights into such developments. He did not. Hence the shortfall in expectations.
But the book was still worth reading even if it did not deliver all I was seeking.
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on May 31, 2013
Gilder's latest work is destined to be a classic similar to Wealth and Poverty. Gilder's theme centers around the nature of information theory applied to physics, chemistry, biology and economics where "the word becomes flesh" is a uni-directional phenomena. Gilder's mastery of this topic, peppered with an almost autobiographical approach to his life's writings makes for an extremely cerebral, thoughtful assessment of world economics history in light of today's global dynamics. Black swans and other "surprise" elements of the altruistic nature of entrepreneurs is uniquely captured and placed into a context that make it timeless, even with George's unique first person case study reviews of Jacobs' Qualcomm up through new entrants in immunology biotech life sciences.

My only reservation in a "like" versus "love" on the Amazon five star rating is George's mastery of the English language outpaces mine, so I have to keep a dictionary close by. Several other http://www.gildertech.com board subscribers also cited this to be the case.

With a unique forward by Andy Kessler (George's long time friend and colleague), over 30 pages of end notes, a "tendentious glossary" (which Gilder shared with his online http://www.gildertech.com board subscribers in April), an extensive index and highly relevant content germane to current global dynamics, I highly recommend this book for everyone's library who cares about the universe and how we fit into this amazing information model.

John Hoben
Spencerport, NY USA
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on June 13, 2014
This to me is a critically important contribution towards understanding just where the rubber meets the road economically and ideologically. Texts like this don't necessarily offer new or unknown ideas per se. This work however does frame and explain fundamental truths long believed but never previously given adequate context or sufficiently detailed. It takes disparate individual notions and melds them into a collective and unifying whole.

That said, to this reader, the language utilized was too often indirect where it need not be. I would describe it as often excessively academic or self-congratulatory. Too much time is spent criticizing known or assumed falsehoods rather than emphasizing and providing greater edification of the right.

As a struggling entrepreneur myself, Mr Gilder's evolved perspective both fortifies and emboldens. The assurances he provides about the vital role played by entrepreneurs lessens the trevails that I imagine follow this type of risk taking for any so inclined. Though a less than easy read it is a welcome addition to the field.
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on January 9, 2014
Writing in the tradition of Confucius and other philosophers who sought to understand how order could emerge out of apparent chaos, George Gilder makes a compelling case in this book that, as the global economy grows ever bigger, the central role of information becomes all the more critical. Actions that distort or suppress information, such as misguided or arbitrary regulations, market (eg money, interest rate) manipulation, or punitive taxation thus have the power to do damage much farther and wider than is generally appreciated. Conversely, if information is allowed to flow free of such distortions, within a robust yet passive transmission mechanism of rule of transparent law and clear property rights, its power to stimulate vast technological leaps forward through entrepreneurial activity has never been greater. Sure, the world faces challenges ranging from excessive debts, demographics and environmental concerns, but if the flow of information is allowed to work its magic--by its very nature obscured from view--even the seemingly most intractable problems of our time will be solved through purposeful, informed human action. Intuitively, we all know that we make better decisions when better informed. George Gilder demonstrates convincingly that the complex systems of economy and society are ultimately no different, but that they must be left to inform themselves, rather than to be somehow arbitrarily planned or directed from above.
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on December 16, 2013
This is the best book on economic theory and entrepreneurship that I've read. Gilder is very thorough in dealing with this topic and he incorporates many references from other noted authors and explains why their theorys are valid or invalid. He supports his theory with many examples - some in great detail - over decades and many major economic events. One of the most eye-opening revelations to me was learning what some of the current economic thought leaders are teaching and preaching in some of the most prestigious institutions - and it is so contrary to reason and common sense that I struggle to think how anyone could embrace that thinking. But once you accept that most of the current government elite have been educated with those errant theories, you can understand why the current policies have been put in place, and why they are having such a damaging effect on our economy.
Gilder, on the other hand puts up such a strong case for his theory of Knowledge that anyone of sound common sense will agree that it is indeed the truth - the way things actually operate. It's reality, and it supported thoughts I've held for many years. It is a bit lofty and abstract at times and I was glad to have read it on my Kindle, because Gilder's vocabulary far exceeds mine, but I was able to keep up with the help of the built in dictionary. I wish everyone who truly wants to see America succeed would read this book. This should be required reading for every elected official and college student. We need an electorate in the United States that is soundly educated in Economics, among other subjects, or I fear for our future. I hope this book serves to elevate the Economic I.Q. of our country.
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on July 8, 2013
The "science" of economics is far from settled, especially because the role of the entrepreneur does not even appear in traditional economics. Gilder is a gifted writer and has a good nose for finding important new developments. Some of his applications of information theory are not very well nailed down, but his insights are genuinely new and point to a new direction to extend economics out of its current "equilibrium seeking" prison to take into account innovation. Since any layman observer can see that innovations are what drive the economy's growth, it is time for the economists to add entrepreneurs to their thinking and realize that a healthy economy is always out of equilibrium because of the input of entrepreneurs.
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on March 2, 2016
As mentioned in one of the other reviews, the useful portions of this book could be written as a brief magazine article. Most of the book is dedicated to separate pet projects such as the author's view on energy policy without any supporting facts.
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on January 24, 2016
After reading a multitude of books on economic theory over the last 30 years, including those assigned for both undergrad and graduate level economics and finance courses, I must declare that "Knowledge and Power" is the most complete and insightful explanation of how economies truly work in the real world. Gilder nails it in this book by building upon many of the supply-side principles he advocated in "Wealth and Poverty" over a generation ago, articulating the role of entropy and tech innovation that he highlighted in "Microcosm" and "Life After Television" in the late 80s, and expanding on the vital role of entrepreneurship and transformational risk-taking that he profiled with real-life stories in "Recapturing The Spirit Of Enterprise" in the early 1990s. In "Knowledge and Power," Gilder successfully assembles a unified economic theory built from the most profound elements of his previous work and presented in a manner that is both contemporary and timeless.

I have read most all of Gilder's previous books and with that context I can distill the central theme of this man's view of economics and innovation as being a full embrace of "dynamism" above all else. In this sense, Gilder is reminiscent of Schumpeter and the force known as "Schumpeter's Gale" that brings about growth and waves of progress by destroying the outdated and inefficient status quo that precedes it. Indeed, Gilder loathes static states in terms of economic progress precisely because they contain no new information. For Gilder, the discovery of "news" through "surprises" that he describes as "high-entropy" is the spark that generates the growth of industries, creation of entrepreneurial wealth, and, ultimately, goods, services, methods, and fortunes that lead to higher standards of living for everyone on the planet.

There are few authors and thinkers out there with the talent and big-picture understanding of economics of George Gilder. He is literally in a class unto himself and uniquely capable of conveying his ideas in a concise, passionate, and clear way. "Knowledge and Power" is truly one of those books that will change your perspective about economics and how economies actually grow. This is not only my favorite of Gilder's books, it is one of my favorite books ever.
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on August 8, 2014
With luck this will be one of the most influential books of the decade. This is a very different take on what's going on in markets,and it's take squares with my experience as a start up guy (six) and as a CPA providing advice to businesses.This is not an easy read. I have a background in finance, and I have to think to follow him, and this isn't about finance, though that is an important component.
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on October 28, 2013
I rarely read books from cover to cover but this one has kept my interest.

The central question Gilder considers is the essentially same one that evolutionary biology ought to be answering, but often tries to sidestep:

"What is the nature of variation? Exactly where does change come from?"

He uses Shannon's theory of information as a backbone of his book. His thesis is that wealth is for the most part information and knowledge about how to use material things. Actual wealth is not found in things that can be easily weighed and measured.

Gilder says the chief error of modern economists is identical to the chief error of the biologists: Assuming that all the inputs are random, when in fact they are as far from random as you could get.

In information theory, new information is "surprise" - a new pattern that no formula could have ever predicted. This has much parallel to his work in the Discovery Institute, because in biological evolution, it's a new sequence that has never been before, which creates novel features. In business, it's a completely new product, a new solution that nobody has thought of before.

Gilder hammers home the point that the truly new product or new solution is not merely the result of consumers asking for stuff and then getting it. In 1900 that would have been "faster horses" instead of cars; in 1980 that would have been "more phone booths" instead of everyone owning a smart phone. What really drives economic growth is the small percentage of innovators and inventors who create truly new, unexpected and often un-asked for things.

His book advocates this as a particular new version of "supply side economics." He says, of course you can quantify existing demand, but you cannot quantify unpredictable innovations, things where as soon as you show it to people they want it (like the iPad) - even though 5 minutes earlier they could have never specifically told you they wanted it.

This is 100% consistent with my own experience with market research. One can always do a better job of asking people what they want and delivering it, and that is optimization. But creating a wholly new experience, that's what I refer to as "alchemy." There is always an element of magic.

5-7 years ago you could build an entire business around optimization; you could just take an existing business and optimize it and be successful. In 2013 that is hardly ever good enough. In 2013 you have to do something truly innovative to get people to open their wallets.

So my #1 focus for the last 2-3 years has been on the question of "How do you systematically achieve alchemy, rather than merely doing optimization?" I seriously doubt that there is simply a math formula or algorithm for it, although tools that generate permutations of ideas do exist.

Gilder discusses Godel's incompleteness theorem as having definitively proven that no system can articulate its own assumptions, that it always takes something unexpected from the outside to generate novelty. In everyday experience, it's the ability to ask a question that nobody's asked before, and then get a really good answer.

Gilder's criticism of conventional economics is that it attempts to reduce economics to a materialistic formula. When in reality the inner workings are far more complex than that.

Gilder points out how wealth is increasingly not land or farms or factories but the ability to apply knowledge in an ingenious contextual way. He talks about how Bill Gates is tied to the mast of the ship of Microsoft - if he ever leaves, the stock will hugely tank because the real asset is... BILL. Having watched all kinds of companies get acquired and then destroyed by their new owners (like the business I helped build in 1997-2001) I wholeheartedly agree.

Gilder makes a prescient remark about how bureaucrats and social engineers always assume they can "capture" wealth, by taxing people or businesses or regulating things. But the above example about Microsoft proves you can rarely do it successfully, because while the government can seize Microsoft's assets, it can't seize Bill Gates' mind or his experience or his will to succeed.

Gilder points out that the bureaucratic belief that you can do this is simply a materialistic assumption - people think wealth is land and materials and goods, when it's really ideas and discoveries and acquired knowledge. It's the same materialism that the Discovery Institute in its own way is trying to combat.

He says that most economists think that you can't beat the market because they think it's a casino, a game of chance. But it actually is a game of skill and that's why Warren Buffet consistently beats the market. Once again I can't help but notice the parallels between this and materialistic evolutionary models. I think that the materialistic reductionist model is one of the all pervasive meta-narratives of the present age. This book applies a non-materialistic, non-reductionist model to economics. In this I think Gilder succeeds.
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