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George Gilder: Why Entrepreneurship Can’t Just Be Automated

In business, an entrepreneur is the “oracle,” the one element that cannot be programmed or computed

Recently, Steve Forbes, Chairman and Editor-in-Chief of Forbes Media, interviewed George Gilder, tech philosopher and author of Life after Google: The Fall of Big Data and the Rise of the Blockchain Economy.

Of his guest, Forbes says, “Few men or women in modern times have been so consistently farsighted in fathoming the future of high technology as George Gilder has been. Over a quarter-of-a-century ago, for instance, he foretold in stunningly accurate detail the characteristics of today’s smartphones. Experts back then dismissed Gilder’s prophecies as delusional fantasies. One exception: Steve Jobs. He read what Gilder wrote and took it to heart.”

In the podcast, The Creativity of Capitalism and the Post-Google Era, they discussed key current issues: why entrepreneurship cannot be automated, what’s with Google’s corporate “nervous breakdown,” and why student debt should simply be wiped out.

In the first part [at 4:12], they looked at why entrepreneurship defies formula and automation.

Forbes started by explaining to hearers why, as a prominent publisher with access to a vast world of ideas, he thinks Gilder is “well worth listening to.” Gilder’s best-known book is the classic Wealth and Poverty (1981) but he also wrote Life After Television: The Coming Transformation of Media and American life (1994):

Forbes: And, a quarter of a century ago you said, George, that we’re going to have devices as portable as your watch, close as your wallet, that will collect mail, give us mail, give us news, navigate streets, recognize speech, by golly, it’s here today.

Gilder: Steve Jobs passed that book around to his colleagues so I feel I had some small influence in encouraging this trend.

Forbes: But he didn’t give you Apple shares as a reward…

Gilder: He did not give me Apple shares.

That disappointment aside, Forbes moved on to the question of machines taking over:

Forbes: They’re smarter than us, robots are going to do all our jobs, artificial intelligence is coming along and most of us will be rendered useless, we’ll need a universal income as we eat potato chips because there’s nothing for us to do… But you make the point that machines and the human brain are not interchangeable and that great computational power should not be confused with creativity. Explain!

Gilder: The World Wide Web, to sustain it with all its data centers and whatever takes huge plants all over the world churning away to sustain all the computers that comprise the zettabyte on the World Wide Web. The zettabyte in our heads, which is just the beginning of a map of the brain, not the complete map, just a map of connections, works on 14 watts. And these clowns in Silicon Valley think they’re duplicating our 14-watt zettabyte with their artificial intelligence Tinkertoys out there.

And it’s just a quixotic claim. It’s wrong. They aren’t anywhere near to reproducing the brain; they’re nowhere near to a Singularity. That is speed of processing and it has nothing to do with consciousness or intelligence or creativity or any of the features that our brains show. Imagination, counterfactual, invention…

Forbes: I think it was Mark Mills made the point that we apply these ominous terms like “artificial intelligence.” We don’t call, he said, airplanes “artificial birds” or cars “artificial horses.” We have this ominous term that makes us think it’s about to take us over.

Gilder: Any logical system, including mathematics, including any computer based on mathematics, is necessarily dependent on propositions outside the box that can’t be proven in the box. That’s the essence of Gödel’s incompleteness theorem and that incompleteness theorem was reduplicated by Alan Turing in 1936 with his Turing Machine, which again came to the conclusion that a computing machine can’t come to a conclusion, that you can’t even predict whether it is going to arrive at any result at all. And again, that any computing machine requires an “Oracle,” as he called it.

Gilder argues that, in business, an entrepreneur is the “Oracle,” the one element that cannot be programmed or computed. While Paul Romer and William Nordhaus won the Nobel Prize in Economics in 2018 for an essentially materialist approach to knowledge creation, he takes issue with that approach:

Gilder: … Romer’s definition of entrepreneurship is to assemble and reassemble chemical elements and this shows just a desperate desire to reduce the entrepreneur to function of material forces, one way or another and deny the entrepreneur his absolute creativity. Creativity always comes as a surprise to us. If it didn’t, we wouldn’t need it. We could program it on our machines. But because it’s always surprising, it can’t be planned. If it wasn’t surprising, planning would work and socialism would prevail.

Forbes: So this gets to the essence of economic growth. We tend to think of economic growth as more services and more automobiles and houses and things like that but you make a more fundamental point that it’s knowledge, new knowledge. Wealth is knowledge.

Gilder: Thomas Sowell said back in 1973 that the Neanderthal in his cave had all the physical resources we command today. The difference between our age and the Stone Age is entirely knowledge. Growth is learning and learning curves are the prevailing model of capitalist growth.

But, they emphasized, innovation requires that businesses be allowed to fail.

Gilder: Every new business is the test, an experimental test, of an entrepreneurial proposition and it can yield knowledge if it can fail— if it can be allowed to fail, if bankruptcy is possible or other forms of rejection or failure are possible.”

Forbes: This experimentation means an enormous amount of failure. Take the Newton from Apple. It failed. As somebody said, the people who created it had IQs that could boil water. But it failed. But it also provided the technology for the iPod, the iPhone, the iPad. So you learn and even the pieces of failure can lay the foundation for future growth.

The contemplation of entrepreneurship led to a discussion of the way governments can stifle innovation by failure-proofing industries, thus stalling or preventing innovation:

Gilder: But take a different example. Today, governments everywhere are guaranteeing success for solar panels. As a result, solar panels are being deployed all over the place. You see ‘em cluttering up the landscape.

But they can’t actually impart energy to a particular house. They only function if you link ‘em to the grid and assign arbitrarily the power to the owner of the solar panel. But if solar panels hadn’t been subject to all these government guarantees, the industry would have learned how to provide some kind of fixture that could be installed in a house and for less than the price of the house and actually contribute energy, distributed energy, not dependent on the grid. Which would be a useful device.

But the solar industry, because it’s subject to guarantees and government subsidies has been a complete blank spot for innovation. There’s nothing happening there. They’re just deploying these panels…

Forbes: So even though they’re making the panels cheaper…

Gilder: Yeah, they’ve got a learning curve on panel production but they haven’t made the inventions to allow an efficient solar facility, even in Las Vegas, on the roofs of these casinos. They still feed the energy up to the grid, which bogs down the grid. The grid has to buffer it all and the erratic flows have to be smoothed. And it’s just a mistake to guarantee industries. You guarantee and you’ll halt learning, you halt progress.

Forbes: You say consciousness depends on faith, the ability to act without full knowledge, and this is to be surprised and to surprise. You don’t know what’s going to happen.

Even Steve Jobs, when asked if he did marketing surveys, said no, because people don’t know what they want until I show them. But sometimes he could show them and they might not want it. It’s taking that risk.

Next: Why does Google seem to be having a corporate nervous breakdown?


Why student debt should simply be wiped out Universities are preparing students to resent, not join, the new decentralized economy

Further reading: George Gilder: Google does not believe in life after Google He offers chilling insight into the ultimate visions of technocrats

Imagining Life after Google A compendium of comments from reviews

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George Gilder: Why Entrepreneurship Can’t Just Be Automated