Why Information Grows: The Evolution of Order, from Atoms to Economies

by Cesar Hidalgo

Overview

"Hidalgo has made a bold attempt to synthesize a large body of cutting-edge work into a readable, slender volume. This is the future of growth theory." — Financial Times

What is economic growth? And why, historically, has it occurred in only a few places? Previous efforts to answer these questions have focused on institutions, geography, finances, and psychology. But according to MIT's antidisciplinarian Cér Hidalgo, understanding the nature of economic growth demands transcending the social sciences and including the natural sciences of information, networks, and complexity. To understand the growth of economies, Hidalgo argues, we first need to understand the growth of order.

At first glance, the universe seems hostile to order. Thermodynamics dictates that over time, order-or information-disappears. Whispers vanish in the wind just like the beauty of swirling cigarette smoke collapses into disorderly clouds. But thermodynamics also has loopholes that promote the growth of information in pockets. Although cities are all pockets where information grows, they are not all the same. For every Silicon Valley, Tokyo, and Paris, there are dozens of places with economies that accomplish little more than pulling rocks out of the ground. So, why does the US economy outstrip Brazil's, and Brazil's that of Chad? Why did the technology corridor along Boston's Route 128 languish while Silicon Valley blossomed? In each case, the key is how people, firms, and the networks they form make use of information.

Seen from Hidalgo's vantage, economies become distributed computers, made of networks of people, and the problem of economic development becomes the problem of making these computers more powerful. By uncovering the mechanisms that enable the growth of information in nature and society, Why Information Grows lays bear the origins of physical order and economic growth. Situated at the nexus of information theory, physics, sociology, and economics, this book propounds a new theory of how economies can do not just more things, but more interesting things.

Product Details

ISBN-13:	9780465096848
Publisher:	Basic Books
Publication date:	02/14/2017
Edition description:	First Trade Paper Edition
Pages:	256
Sales rank:	950,018
Product dimensions:	5.40(w) x 8.10(h) x 0.80(d)

About the Author

Cesar Hidalgo leads the Macro Connections group at the MIT Media Lab and is an Adjunct Lecturer in Public Policy at the Kennedy School. A trained physicist, he also has extensive experience in the field of economic development and has pioneered research on how big data impacts economic decision-making.

Table of Contents

Prologue: The Eternal War
Introduction: From Atoms to People to Economics

PART I
Bits in Atoms
Chapter 1. The Secret to Time Travel
Chapter 2. The Body of the Meaningless
Chapter 3. The Eternal Anomaly

PART II
Crystallized Imagination
Chapter 4. Out of Our Heads!
Chapter 5. Amplifiers

PART III
The Quantization of Knowhow
Chapter 6. This Time, It’s Personal
Chapter 7. Links Are Not Free
Chapter 8. In Links We Trust

PART IV
The Complexity of the Economy
Chapter 9. The Evolution of Economic Complexity
Chapter 10. The Sixth Substance
Chapter 11. The Marriage of Knowledge, Knowhow, and Information

PART V
Epilogue
Chapter 12. The Evolution of Physical Order, from Atoms to Economics

Acknowledgments: Bleeding Words
Notes
Index

Editorial Reviews

Finalist for the 2015 Hayek Book and Lecture Prize


"The concept of information is necessary to make sense of anything that is not a boring featureless mass, including life, mind, society, and value. Why Information Grows lucidly explains the foundations of this essential concept, while creatively applying it in exciting new ways. It is filled with interesting ideas, and a pleasure to read."
—Steven Pinker, Johnstone Professor of Psychology, Harvard University, and author of The Language Instinct and How the Mind Works


"Mr Hidalgo succeeds brilliantly in bringing his complex subject to life. His book is full of nuggets, from memorable phrases to interesting metaphors."
—Economist


"Written in an accessible and entertaining style.... Hidalgo has made a bold attempt to synthesise a large body of cutting-edge work into a readable, slender volume. This is the future of growth theory and his thought-provoking book deserves to be widely read."
—Financial Times


"Contains some innovative thinking about what drives growth that could help us to navigate the turbulence of the ever more interconnected global economy."
—Nature


"Thought-provoking...Well written and accessible, the book is full of interesting ideas that deserve to be read and discussed."
—CHOICE

"An impassioned argument for the advantages of an information-centric view of economic growth, and for understanding the different capacities of nations to provide solutions to human problems... Hidalgo persuasively demonstrates the value of this approach by placing the ideas firmly in their historical context, both in information theory and in physics... Hidalgo's perspective on economic wealth is wildly fresh and creative. Physicists will enjoy reading about familiar ideas in new ways, and will also find value in learning how these ideas can be applied fruitfully in areas seemingly far away from physics. Economists and other social scientists will find new concepts ripe for profitable use."
—Physics World


"Anybody interested in the future of mathematical theory in economics should read Cesar Hidalgo's book Why Information Grows. There are many things to like about this lucid account of the evolution of our scientific understanding of information. One of the most important may be the simplest. It illustrates what it means to think like a physicist."
—Paul Romer, founding director of the Urbanization Project at NYU Stern


"A mind-stretching, unconventional book that draws on information theory, physics, sociology and economics to explain economic growth and why it occurs in some places, not all."
—Pittsburgh Tribune-Review

"Hidalgo invites us to understand the economy in an entirely different way.... [A] novel, holistic take on the dismal science."
—Kirkus Reviews


"Why Information Grows shows us how humans infuse information into matter, making it more valuable than gold. Hidalgo's work brilliantly spotlights the true alchemy of the twenty-first century and its impact from economic complexity to national competitiveness."
—Albert-Laszlo Barabasi, Distinguished Professor and Director of Northeastern University's Center for Complex Network Research, and author of Linked


"Economies are built out of information. This has been true from the Stone Age to our knowledge economy today. Yet until Cesar Hidalgo's breakthrough book, we have not had a deep account as to how and why this is so. This exciting, important book is a major step toward a twenty-first century theory of growth."
—Eric Beinhocker, Executive Director, Institute for New Economic Thinking, University of Oxford and author of The Origin of Wealthspan

From the Publisher

2015-04-01
An interdisciplinary theorist, Hidalgo, the Macro Connections group leader at the MIT Media Lab, invites us to understand the economy in an entirely different way. In the wake of the 2008 recession, an outpouring of books—for example, J.K. Galbraith's The End of Normal: The Great Crisis and the Future of Growth (2014)—has criticized the insularity of economists and their unwillingness to expand the discipline's perspective. Now comes Hidalgo (co-author: The Atlas of Economic Complexity: Mapping Paths to Prosperity, 2014) with a lens wide open. Drawing insights from chemistry, history, biology, anthropology, economics, and sociology, he urges us to see economic growth as "the social manifestation of the growth of information," "information" defined not as meaning but rather as physical order. Hidalgo's nontraditional approach requires careful definition of a number of words—e.g., "knowledge" and "knowhow," "entropy" and "computation"—and occasionally a new vocabulary (the awkward but useful "personbyte" and "firmbyte"). In the world as Hidalgo sees it, a Bugatti is "an uncommon configuration of matter" whose value (new vs. crashed) depends entirely on the configuration of atoms. As he progresses from atoms to economies, Hidalgo offers a variety of startling insights about physical objects as the embodiment of information; about whirlpools as "information rich"; about markets as incarnations not of riches but of wisdom; about the limits of once-productive networks like Ford's River Rouge; and about the perilous consequences of a social group's isolation. He explains why the human capacity to crystalize wisdom is "geographically speckled"; why modern products no longer remain strongly associated with particular regions (Champagne with France, clocks with Switzerland); and why a trip through the birth canal is akin to time travel. Some readers, perhaps economists especially, will construe Hidalgo's widely allusive musings as dotty dispatches from Jonathan Swift's Laputa; others will delight in his novel, holistic take on the dismal science.

Kirkus Reviews