Rethinking economics …

… Surprise and Creativity | The Weekly Standard. (Hat tip, Dave Lull.)

By identifying a capitalist economy as chiefly a knowledge system rather than a mechanistic incentive system, the new economics obviates all the concerns over greed and avarice as crucial to the creation of wealth. The enabling theory of telecommunications and the Internet, Information Theory offers a path to a new economics that places the surprising creations of entrepreneurs and innovators at the very center of the system rather than patching them in from the outside as “exogenous” inputs. Information Theory also shows that knowledge is not merely a source of wealth; it is wealth. Wealth is the accumulation of knowledge. As Thomas Sowell declared in 1971: All economic transactions are exchanges of differential knowledge, which is dispersed in human minds around the globe.