highlights from why information grows

Our planet is to information what a black hole is to matter and what a star is to energy. Our planet is where information lives, grows, and hides in an otherwise mostly barren universe.
Knowhow is different from knowledge because it involves the capacity to perform actions, which is tacit
The tacit nature of knowhow seems strange, as it makes us feel like automatons that are unaware of what we are doing. Yet there is nothing strange in that. As Marvin Minsky, one of the fathers of artificial intelligence, once said: “No computer has ever been designed that is ever aware of what it’s doing; but most of the time, we aren’t either.”
Yet unlike information, knowledge and knowhow are embodied in humans and networks of humans that have a finite capacity to embody knowledge and knowhow. The finiteness of humans and of the networks we form limits our ability to accumulate and transmit knowledge and knowhow, leading to spatial accumulations of knowledge and knowhow that result in global inequality.
As the parts that made the Bugatti were pulled apart and twisted, the information that was embodied in the Bugatti was largely destroyed. This is another way of saying that the $2.5 million worth of value was stored not in the car’s atoms but in the way those atoms were arranged. That arrangement is information.
In a physical system, information is the opposite of entropy, as it involves uncommon and highly correlated configurations that are difficult to arrive at.
In nature information is rare not only because information-rich states are uncommon but also because they are inaccessible given the way in which nature explores the possible states.
Prigogine produced many important insights, but the one that is of concern to us here is the idea that information emerges naturally in the steady states of physical systems that are out of equilibrium.
Unlike still water, whirlpools are organized structures in which the water molecules are not going in random directions, but have a speed and trajectory that is correlated with that of the water molecules traveling next to them. The information-rich state of a whirlpool emerges naturally—it is something that we get for free in an out-of-equilibrium system. Going back to our original sentence, we can say that the whirlpool is an example of information that emerges naturally in the steady state of a physical system that is out of equilibrium.
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. We can think of our planet as a little whirlpool of information in an otherwise vast and barren cosmos.
As a result, we live on a planet where information is “sticky” enough to be recombined and created. This stickiness, which is essential for the emergence of life and economies, also hinges on additional fundamental physical properties.
So what is the potential that out-of-equilibrium systems such as our bathtub whirlpool minimize? In 1947 Prigogine showed that the steady state of out-of-equilibrium systems minimizes the production of entropy. What this means is that out-of-equilibrium systems self-organize into steady states in which order emerges spontaneously, minimizing the destruction of information.
The statistical properties of non-equilibrium systems can help us understand the nonhuman origins of information but not its endurance. Yet it is the endurance of information that allows information to be recombined and allows life and the economy to emerge. The endurance of information is therefore as important as its origin, since without it the recombinations we need for information to beget more information cannot take place. Yet the endurance of information is not guaranteed in the laws that explain its origin. Once again, there must be something else going on.
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. The chemical changes encoded by these systems are modifying the information encoded in these chemical compounds, and therefore they represent a fundamental form of computation. Life is a consequence of the ability of matter to compute.
So time is irreversible in a statistical system because the chaotic nature of systems of many particles implies that an infinite amount of information would be needed to reverse the evolution of the system. This also means that statistical systems cannot go backward because there are an infinite number of paths that are compatible with any present. As statistical systems move forward, they quickly forget how to go back. This infiniteness is what Prigogine calls the entropy barrier, and it is what provides a perspective of time that is not spatialized like the theories of time advanced by Newton and Einstein. For Prigogine, the past is not just unreachable; it simply does not exist. There is no past, although there was a past. In our universe, there is no past, and no future, but only a present that is being calculated at every instant.
The main difference between apples and Apples is that the apples we eat existed first in the world and then in our heads, while the Apples we use to check our email existed first in someone’s head and then in the world.
The most poetic part of Hugh’s accomplishment, however, is not that he is walking on robotic legs but that he is walking on solidified pieces of his own imagination.
Thinking of product exports in terms of crystallized imagination tells us that we live in a world in which some countries are net importers of imagination, while others are net exporters of it. The idea of crystallized imagination tells us that a country’s export structure carries information about more than just its abundance of capital and labor. A country’s export structure is a fingerprint that tells us about the ability of people in that country to create tangible instantiations of imaginary objects, such as automobiles, espresso machines, subway cars, and motorcycles, and of course about the myriad of specific factors that are needed to create these sophisticated products. In fact, the composition of a country’s exports informs us about the knowledge and knowhow that are embodied in that country’s population.
So classic economic concepts, such as the balance of trade between two countries, seem incomplete once we reinterpret products as crystals of imagination. When we start seeing products as embodiments of human imagination, we realize that there is an alternative to the balance of trade. This is the balance of imagination, which involves the exchange of imagination that piggybacks the concoctions of atoms we buy and sell.
Yet in a world where knowledge and knowhow are trapped in social networks and are difficult to copy, we should expect large differences in countries’ abilities to crystallize imagination, since differences in the knowledge and knowhow available in a given country should be reflected in the set of products that each country is able to produce.
Knowledge and knowhow are so “heavy” that when it comes to a simple product such as a cellphone battery, it is infinitely easier to bring the lithium atoms that lie dormant in the Atacama Desert to Korea than to bring the knowledge of lithium batteries that resides in Korean scientists to the bodies of the miners who populate the Atacaman cities of Antofagasta and Calama.
Ultimately, the experiential and social nature of learning not only limits the knowledge and knowhow that individuals can achieve but also biases the accumulation of knowledge and knowhow toward what is already available in the places where these individuals reside. This implies that the accumulation of knowledge and knowhow is geographically biased.
The bottom line is that there is a clear trend showing that the most complex products tend to be produced in a few diverse countries, while simpler products tend to be produced in most countries, including those that produce only a handful of products.
The personbyte theory can also help us explain why large chunks of knowledge and knowhow are hard to accumulate and transfer, and why knowledge and knowhow are organized in the hierarchical pattern that (is expressed in the nestedness of the industryto be embodied in, and transferring or duplicating large networks is not as easy as transferring a small group of people.
Bridging social capital, as its name suggests, is the social capital that an individual has when her peers do not know each other. She can arbitrage information or goods between groups that she belongs to, and she can recombine information that is accessible only from her privileged position in a social or professional network.