Its based ultimately on information theory. It shows an information theory that is a foundation of capitalism that capitalism is not cheaply an incentive system as most people believe. That it is an Information System dprifn driven to create knowledge, and all wealth consistencies of knowledge. And thomas, years ago, pointed out that the knee cave march had all the natural source and the physical appetite we have today. The difference between us and him is we know more. When you talk about information economic. What do you mean . Theres a revolution in the 20th century that a lot of people havent yet grasped. It was einsteins best friend. He walked to work with him for ten years, twenty years in princeton. And good proof that it is last year steven said that mathematics is the only faithbase science that can prove it. It was a revolution that was followed up by alan, who created the original abstract Computer Technology on the effort to disprove it. But instead he wanted to build an he discovered that just as mathematics is limited by incompleteness so is Computer Science. He concluded that ultimately all computers are depended on a creator when he called an oracle, which in Computer Science is a programmer. All i if was extend his insight to say that in economics, the oracle is the entrepreneur. You have a chapter in knowledge and power. Who has a website and i had writes about telecom in this that website. Its a way to say economic based on the theory. Is it a supply side economic book. Yes, it is. It shows that demand is almost devoid of information. The knowledge in the economy really is comes from the supply. The goods and services we all create and trade with one another. As thomas pointed out all economic transactions are really transactions of knowledge. Differential knowledge. Each of us knows different things, and thats really what were trading. The trerlists conceived in physic. You cant create more of it. And its all the change in progress that we enjoy comes from the advance of knowledge and learning. And theres a lot in the book about the learning curve is really the foundation of economic progress. You talk abou the Company Qualcomm in knowledge and power. Why . Qualcomm is the great company. Its really the foundation of this wireless bonanza cornucopia that we enjoy today. That really was launched by qualcomm. I was well, i was at qualcomm in the earliest period talking to andy and irwin jacobs and they introduced me to information theories. Who is clod shannon . The founder of information theory and the teacher of irwin jacobs. Founder of qualcomm. The quite insight he offered was the dwiefd information as surprise. Freedom of information in shannon is freedom of choice. The more freedom of choice that the creator has, the more information he can convey. And so shannon allows you to put freedom at the very heart of a capitalist economy. Not only is the condition for enterprise that is also a measure of information and a criteria for creativity. Shannons information theory, which is a foundation of all of these technologies we enjoy is based on freedom. Thats why freedom fest is a good place to celebrate shannon. Talking with several economists and people with opinions about the current political situation in america. And a couple of intervenes we have done here people have expressed concern about the debt that the u. S. Ask carrying and theres going to be a come up pans shortly. Do you subscribe to that . No. I think that is serious. But the great thing that this book shows if we have a knowledge economy an economy of mind, it can change as rapidly as peoples minds. The problem in the united is not that. Its socialism. And you address the problem of increasing exercise and government power to make up for government ignorance, and to displace the nojt knowledge of entrepreneurs. Thats the problem. Debt is trivial if we can surmount the problem of socialism. If we continue down the socialist path like many countries over the years it will become more supportable. The problem is socialism not that. In your chapter the outsider trading substantial you write with inside information banished from public markets, private tiers capture the wealth, gains go to the residual inside traders for legally permitted to learn the intimate fact of the company in which they yeah. Thats right. The governments effort to ban inside knowledge under fair disclosure eventually advantagishes knowledge for markets and underminds the u. S. Economy. Con stay pate the whole information process in to a few key moment disclosure like quarrelly earning statements and merger and acquisitions events of increases the incentive to do fraudulent Insider Trading and increases inside trading which would not be a problem if all the information from companies could come public. Who is your favorite economist . There are all kinds of terrific economists who i follow. Steve forbes should be president. Hes at freedom fest and an inspiration for all of us. Lucid in economics, analysts and exponent as there is. What was your relationship with milton fremont. Would he have been comfortable at freedom fest. Hes a hero at freedom fest. Hes free to choose in the heroic celebration of freedom obviously make him a great libertarian hero. However, i believe that mill to be milton had too much focus on capitalism as an incentive structure and not enough focus on the creativity of entrepreneur. He thought money had its own power. My belief is the power of money derives entirely from communitybased. Knowledge and it doesnt stimulate it. This is what is hard for a lot of people to understand. A lot of people think giving is easy. You can give stuff to people and it will benefit them. How hard it is to giving . That actually gratifies its recipients. And investment is a form of giving. You dont control the response. Youre giving your wealth to another person if a company or in a an individual in the hope that they will use your wealth productively. You cant guarantee it. And the crux of knowledge creation is no guarantee. If row have guarantees there cant be any knowledge created. Because knowledge has to be false fieble. You have to be able to fall if i your proposition. Bankrupt your company, if they cant fail they cant scweed. Succeed. Where did you grow up . How did you get started. I grew up in the western part of massachusetts, and i got my father was richard guilder, wrote a book about intangible capital way back in when he was in college, and hef killed in the Second World War ii. Went to germany in 1936 with david rockefeller, actually. And saw hitler and decided it was going to be necessary to defeat germany. There is no negotiation possible. He entered the war and lost his life as a pilot. Was he a professor at the time . No, he was a writer and actually was a entrepreneur at tiffany and co. Went to civilian flight train soggy he could enter the war when it happened. He wrote his thesis when i didnt discover until after i had written wealth and poverty intangible hayek. Its hardly a key inspiration in power. In your chapter in knowledge and power on the substantial of money. You write about austin, the president s economic adviser. The multiple profit on the deal may influence the future. Nobel nomination. In any case exhibited as little understanding of banking and financial crises as the most intemp operate tea party or occupy wall street ranter. It. Ranter. A lot of people imagine during the 2008 crisis the government officials actually knew something. Report from the actual dlik showed it was a pure fog of crisis. They didnt know anything and their solution was to exert government power as a replacement for actual knowledge, and the knowledge without in the economy. That they thought they were thwarted. As were taping the internet the market is it pretty historic highs . How do you see the economy and the market in a general sense today . In general sense, depends on program of deregulation to unleash the new company on the frontier of the economy. The Big Companies are doing fine. They have the power to fight government regulators and lawyers to negotiate their way through the amazes. Its almost impossible to have initial Public Offering today. And all economic ultimately derived not all but virtually all comes from yearial companies financed by venture capitalists, and 21 of gdp even is attributed company supported by venture capitalist. 65 of market cap comes from companieses that were launched by venture capitalists. And so if you thwart irk po it might be good for the surviving company than it has been for the future. Knowledge and power the information this is booktv on cspan2. Paul canter talked with booktv about the invisible hand and Popular Culture at freedom fest a libertarian fee. It it is twenty minutes. We want to introduce you to university of virginia professor who is also an author. Before we get to your most recent book. What do you teach athe university of virginia . I teach both in the English Department and comparative literature. I teach a World Literature survey course. One of the book that came out of the british empire. A lot of things. Written mostly about shakespeare. Can you make connection between the authors . Absolutely. Thats my profession. What is one of the connections . Well, im general interested in politic and how people perceive politics and these things go all the way from over to the american webster. So i have an essay in the new book that compares great trilogy. Take the same subject and look at the great trank i did and a American West movie. Your newest book is invisible hand in Popular Culture what are you attempting to do . Im examining the freedom in american are they looking at larger issues besides just an entertainment vehicle . I dont have a simple rule for that. Sometimes they are. I discuss davids
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