How Does Your Information Garden Grow?
By Amy Willis
Physicist Cesar Hidalgo’s new book, Why Information Grows was the subject of this episode. While Hidalgo and Roberts’s ideas about information and the networks that transmit it have much in common, we’d like to continue to explore some of these ideas with you.
1. How is “information” distinct from “knowledge?” Essayist Michel de Montaigne once wrote, “We can be knowledgeable with other men’s knowledge, but we can’t be wise with other men’s wisdom.” How does Montaigne’s remark apply to the way Hidalgo thinks about knowledge and information?
2. Hidalgo emphasizes the process and importance of the accumulation of information, while Nobel laureate F.A. Hayek, seemed to emphasize something different, particularly in his famous article “The Use of Knowledge in Society.” How does Hayek’s conception of knowledge differ from Hidalgo’s?
3. Hidalgo describes the price system as follows:
So, the price system–I agree[?] it helps reveal information about supply/demand things. But there is much more to the economy than that. It’s not just about making commercial transactions. What makes an economy work at the end is that we figure out things that are worth transacting. And that’s a part, you know, of the economy that I haven’t seen that much explaining the theories in which the things that get produced, more or less are assumed to be there because they are either widgets or they are, you know, some sort of object that we assume that it’s there. And the focus has been most on the commercial transactions among those things that exist, rather than on the interactions that have to happen among people to bring things into existence.
How accurate is this description? Does it go beyond “mainstream,” or textbook, economics, or is it, as Roberts suggests, “a bit of a straw man?’ Explain.
4. When Roberts asks Hidalgo about the growth of China, he responds, “…what explains for me the growth of China is not low prices, but the relatively low price of high capacity.” What does he mean by this, and what does it suggest about the potential for continued growth in China?