Synopses & Reviews
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 MITs antidisciplinarian César 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, orderor informationdisappears. 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 Brazils, and Brazils that of Chad? Why did the technology corridor along Bostons 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 Hidalgos 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.
Mr Hidalgo succeeds brilliantly in bringing his complex subject to life. His book is full of nuggets, from memorable phrases to interesting metaphors.”
Anybody interested in the future of mathematical theory in economics should read Cesar Hidalgos 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 NYU Stern Urbanization Project
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.”
Contains some innovative thinking about what drives growth that could help us to navigate the turbulence of the ever more interconnected global economy.”
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.”
Hidalgo invites us to understand the economy in an entirely different way.... [A] novel, holistic take on the dismal science.”
"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 César Hidalgos 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 Wealth
This beautifully written and carefully researched book may set in motion a paradigm shift in economic thinking. Blending deep theory with detailed data, Hidalgo demonstrates that countries grow, firms prosper, and individuals thrive when they enmesh themselves in diverse, talented networks that produce complex physical order, i.e. information. Why do economies grow? Because information does.”
Scott Page, Professor of Complex Systems, Political Science, and Economics at the University of Michigan and author of The Difference
The diverse set of perspectives that César Hidalgo brings to the eternal question of growthfrom economic development theories to big data mining engines to elegantly crafted visualizationsunderlies the central thesis of Why Information Grows: diversity. Including many diverse perspectives will ultimately create maximum complexity and chaos, which ultimately creates growth. Hidalgo makes a powerful case for the importance of creativity and imagination in our society's ability to make informationand economiesgrow.
John Maeda, Partner, Kleiner Perkins Caufield and Byers and author of The Laws of Simplicity
Why do some nations prosper while others do not? While economists often turn to measures like GDP or per-capita income to answer this question, interdisciplinary theorist Cesar Hidalgo argues that there is a better way to understand economic success. Instead of measuring the money a country makes, he proposes, we can learn more from measuring a countrys ability to make complex productsin other words, the ability to turn an idea into an artifact and imagination into capital.
In The Bit and the Atom, Hidalgo combines the seemingly disparate fields of economic development and physics to present this new rubric for economic growth. He argues that viewing development solely in terms of money and politics is too simplistic to provide a true understanding of national wealth. Rather, we should be investigating what makes some countries more capable than others. Complex productsfrom films to robots, apps to automobilesare a physical distillation of an economys knowledge, a measurable embodiment of the education, infrastructure, and capability of an economy. Economic wealth is about applying this knowledge to turn ideas into tangible products, and the more complex these products, the more economic growth a country will experience. Just look at the East Asian countries, he argues, whose rapid rise can be attributed to their ability to manufacture products at all levels of complexity.
A radical new interpretation of global economics, The Bit and the Atom overturns traditional assumptions about wealth and development. In a world where knowledge is quite literally power, Hidalgo shows how we can create societies that are limited by nothing more than their imagination.
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
Bits in Atoms
Chapter 1. The Secret to Time Travel
Chapter 2. The Body of the Meaningless
Chapter 3. The Eternal Anomaly
Chapter 4. Out of Our Heads!
Chapter 5. Amplifiers
The Quantization of Knowhow
Chapter 6. This Time, Its Personal
Chapter 7. Links Are Not Free
Chapter 8. In Links We Trust
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
Chapter 12. The Evolution of Physical Order, from Atoms to Economics
Acknowledgments: Bleeding Words