Interview with George Gilder • George expresses interest i…

Interview with George Gilder

• George expresses interest in interviewing someone about Bitcoin, emphasizing its importance as an innovation in information theory and a new accounting model called triple entry bookkeeping, which enhances transaction verification and integration.

• Ronald Reagan is quoted, highlighting the shift from an Industrial Revolution economy constrained by physical resources to a knowledge economy fueled by human creativity and imagination.

• Ron Baker introduces George Gilder as a mentor and influential thinker, sharing how Gilder's work has shaped his understanding of economics.

• Gilder shares his evolving perspective on economics, arguing that it is primarily an information system rather than just an incentive system, challenging conventional views on human behavior in economic contexts.

• He asserts that creativity and surprise are essential to capitalism, claiming that genuine economic growth arises from unexpected innovations rather than predictable incentives.

• Gilder explains Claude Shannon's information theory, which defines information as unexpected bits, linking it to economic growth and entrepreneurship.

• He posits that wealth equates to knowledge, and economic growth is driven by learning, supported by learning curves that show cost reductions with increased production.

• Gilder argues that entrepreneurship involves creativity and experimentation, where businesses must be allowed to fail to learn and foster real growth, contrasting this with government guarantees that hinder innovation.

• He contends that the economy is more influenced by ideas than incentives, and that government regulations can create noise that disrupts effective communication and economic growth.

• Gilder discusses the historical significance of gold as a measure of economic activity, connecting it to the concept of time as the ultimate measure of wealth and progress.

• He concludes that manipulating money and interest rates is akin to manipulating time, which is a constant in the universe, reinforcing the idea that time governs economic activity.

• George and Ed debate the concept of charging for time in professional firms, rejecting the Marxist labor theory of value that equates time with money, and emphasizing time as a constraint influencing decisions.

• George explains that money should serve as a value measuring stick, rooted outside of what it measures, with time being the true constraint in economics that necessitates trade-offs and prioritization.

• Ed questions Bitcoin's potential growth in emerging markets and its implications for developed countries, to which George responds that Bitcoin could become a significant layer of internet software, representing a new value form based on time.

• George addresses concerns about Bitcoin's finite supply (21 million units), suggesting its granularity allows for continued economic growth without limitation, as time remains the only scarce resource.

• The conversation shifts to inequality, with George arguing that the wealth of entrepreneurs should not be compared to workers' wages, as they represent different economic phenomena, and emphasizes the importance of managing wealth for growth.

• George critiques the current financial system, noting that currency trading is the largest industry, which does not contribute to economic growth and is often volatile due to government involvement.

• Ed references George's previous work, "Wealth and Poverty," discussing the idea that demand does not create its own supply, and asks for George's views on the current inequality debate and future outlook.

• George expresses optimism about economic change, citing historical examples of rapid transformations from stagnation to growth, emphasizing that policy decisions can dramatically shift economic conditions.

• The discussion touches on behavioral economics, which George dismisses as trivial, suggesting it serves as a rationale for socialism by overemphasizing human irrationality in economic choices.

• Ron welcomes George Gilder and introduces his latest book, "The 21st Century Case for Gold: A New Information Theory," available for download in PDF format.

• Gilder critiques Milton Friedman's monetarism, arguing that Friedman was mistaken in believing that controlling the money supply could effectively regulate nominal and real GDP.

• He explains that Friedman's equation (MV=PT) relies on the assumption of constant velocity (V) of money, which he believes is no longer valid due to volatility from floating currency rates.

• Gilder asserts that velocity reflects human behavior and economic participation, making it a crucial element in understanding economic dynamics.

• He cites Friedman's admission in 2003 that targeting the money supply was ineffective, suggesting that the belief in its control is a delusion.

• Ron and Gilder discuss velocity as an expression of freedom and the necessity of a stable currency as a measuring stick for economi…