| Recent forays into the theory of economic growth have only slightly improved on this understanding. Paul Romer of Berkeley won the Nobel Prize in 2018 for his concept of entrepreneurship summed up as “assembling and reassembling” combinations of chemical elements. Matt Ridley’s new book on How Innovation Works defines his subject as the thermodynamic conversion of entropy into order through expenditure of energy. All such concepts strike me as expressing the “materialist superstition,” the idea that the universe can be summed up by the laws of physics and chemistry. I call it the “flat universe theory.” The corollary is that human inventions result from physical laws and material resources rather than emerge from unique human minds. In my recent speech to Emsi corporation (Economic Modeling Specialists International) of Moscow, Idaho, I referred back to my book, Knowledge & Power, of 2013, describing a fateful exchange with Bruce Lusignan, then a professor of electrical engineering and the eminent chairman of Stanford’s radio astronomy department. A giant in the field of radio communications, he had 16 patents and had designed key transceivers for satellites and cellular phones. I had recently come from a new company called Qualcomm corporation in La Jolla, California, where I had interviewed founders Irving Jacobs and Andrew Viterbi. They had told me of their new technology for wireless communications called Code Division Multiple Access (CDMA). It was a method of sharing and thus multiplying electromagnetic spectrum. At the time, the reigning expertise regarded spectrum as a scarce physical resource like “beachfront property,” to be protected and parceled out in exclusive bands through Federal Communications Commission auctions. Genius Who Predicted Smartphones Has New Forecast... Sharing Spectrum Qualcomm’s leaders said no. Communications spectrum was a product of human ingenuity inventing new lasers, masers, mixers, radio-frequency transceivers, filters, and other devices that provided carriers for information. These carriers could be shared by the use of codes and modulation schemes which in turn could be rendered more effective through information theory. In order to share spectrum it was necessary to digitize and scramble messages, including sounds or voices, across a wide band of frequencies in the electromagnetic spectrum. Later called “cognitive radio,” this method was used in wireline, fiber optic or wireless systems. Lusignan told me that this system could not work: “It violated the laws of physics.” Spread spectrum communications, though, transcended physics and chemistry to operate at the level of information. In particular, CDMA depended on the information theory of Claude Shannon, who had proved that digital systems could use spectrum at least twice as efficiently as analog did. Irving Jacobs projected that CDMA could uses the spectrum thirty times more efficiently than the existing time division systems (TDMA) could. In a hierarchichal universe of information, ideas and designs come first, not physics and chemistry. Physics and chemistry are the low entropy predictable carriers — the boundary conditions — for the projects of entrepreneurs and the creativity of inventors. The materialist superstition of a random and material universe devoid of mind is an enemy of creativity and enterprise. Investors have to transcend the boundary conditions of materialism and grasp the promise and entropy of information. Regards, 
George Gilder
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