The Computational Engine of Economic Development
medium.com
medium.com
Yes, a modern economy consumes energy reduces local entropy of atoms though agriculture, transportation and manufacture. This can be considered computation.
But then: "Late in the last decade, I developed a mathematical technique that can be used to characterize an economy’s ability to produce products. This measure of economic complexity, which makes use of information about the diversity of countries and the ubiquity of products, explains a substantial fraction of a country’s level of income, but it also explains future economic growth."
There is no substantial explanation of this measure and how it is constructed. If it can't be stated simply one suspects it is subject to manipulation and its predictive power might just be an artifact of its construction.
I take it back - the construction of the measure is pretty immune to tampering.
Some Tofflerian quotes from the article:
"under the hood, products are made of order — or information"
"the actions we use to make products are acts of computation"
"just as objects are a more fundamental form of economic value than currency, the ability to create objects is a more fundamental form of economic value than the objects themselves"
Run this pass a trader on Wall Street and they will either laugh you out the door or play to your naiveté while trying to sell you some ocean front property in Arizona.
The "economy" is an abstract concept that people refer to. It is not an actual thing. It is not a computer that has been programmed to do anything, like process events within the framework of information theory.
These "events" are simply the confluence of a bunch of smaller events that happen to be bad across the board. Every day there are just as many events occurring, but because they are not generally bad but are instead a mixed bag, well, we don't call it an "event". Yet, using your terms, "information" is continuously being processed.
God is not a watchmaker and the economy is not a information processing computer. From the article:
"The economy is made of people, networks of people and the things that people make. People and networks of people accumulate knowledge and knowhow, both individually and collectively, and they use that knowledge and knowhow to produce a variety of products that, in turn, augments people’s capacity to produce new products."
The economy is made up of people... Dangerous. So Dangerous. What about the animals. What about weather. What about solar flares. These things all impact the GDP, the macro economic landscape, and market cycles. Hurricanes have been called a shot in the arm for our economy, because they trigger so much rebuilding. What then is something that does not impact the GDP? Is it not information? Is it part of a different information processing computational process?
If you want to go whole hog on the reductionist angle, well,look to quantum physics and chaos theory. Or, just watch the weather channel. Look, there is always info between the data points. And sometimes it ends up influencing the big picture. This is a fact. So, would you say then that the economy is an imprecise machine? I would say that it is simply a shared concept we humans all agree on when discussing these things amongst ourselves. I would say what is really driving it is, well, reality, the arrow of time, entropy (well ish, now we're back to information; but at least this time it's the physicists fault, not the economists).
The reason this sorta framework is dangerous is that it relinquishes responsibility. Any responsibility that we hand off to some abstraction (be it "god", "the gods", "luck", or "the economy") is responsibility we are shirking.
Without lenses, what we see simply won't cohere.
Also I think that talking about the economy abstractly does not absolve people of responsibility. The abstraction is merely a tool to understand and model what you know. It may even help us hold people and organizations responsible when they cause damage.
For example, in the aftermath of the crisis we know that complex financial derivatives contracts created overlooked interdependency, and caused a load of unexpected information processing during the crisis. This has induced lawmakers and regulators to enforce clarity and disclosure.
(I'd only worry if they imported centrifuges from North Korea. Otherwise I would not suspect it's nuclear centrifuges necessarily.)
Also, they fail to explain that Europe has lots of computational power in IT, while the real monetization seems to be happening mostly in the US.