The latest print edition of National Review has my review of George Gilder’s new book Knowledge and Power: The Information Theory of Capitalism and How it is Revolutionizing our World.
The review is still behind the NR wall — it will come out eventually — but here are a couple of excerpts:
+ On Knowledge versus Power:
Gilder repeats often that it’s because the authorities lack knowledge that they use power to try to impose artificial order. This ruins systems that need to adapt and change, and that need information about the real world to do so — information about the state of the market, the workability of business models, the values of consumers, and the feasibility of technologies.
The imposition of control by power instead of knowledge suppresses these streams of information, and the results are not pretty, or even sane. As Gilder describes the financial crisis:
The markets were not accumulating economic knowledge. They were trying to predict the exercise of governmental power. They were trying to second-guess Paulson, who thought he was second-guessing the markets. The government was trying to figure out what the markets thought the government would think about what the markets were thinking. With no idea of what was going on, Paulson was impotent to improve the situation in any way. So he needlessly and repeatedly made it worse.
+ Capitalism as a spiritual system:
In the end, the most important message carried by the pages of Knowledge and Power is that capitalism is a profoundly spiritual system. It allows and encourages people to be the best they can be, not only in serving their own interests and exercising their own talents, but in meeting the needs of others. It is responsible for the extraordinary achievements of the past two centuries.
Gilder’s assertion of the need for a new economic model is also an assertion of the inextricable interconnection of our economic lives and our spiritual nature. This imperative of spiritual revival is the real message of Knowledge and Power, and let us hope that that signal gets through.