Thursday, February 05, 2009

On information

So I was thinking about what I could write about, because I still want to be a novelist, and I believe I have the skills, but what I lack is a story that is engaging enough for me to be confident that others will want to read it. That doesn't mean that I don't have stories that you will want to read. We are talking about a deeper degree of confidence. I'm pretty sure I'd be harder to convince than you are. I don't want to be second best. (I fear that that may have its end in my never writing anything, simply because I conclude that second best is all I'm capable of. And while I'm aware that second best would be pretty good, it's not good enough for me. Without a clear outside incentive -- such as, for instance, making a living -- I've never seen much point in pursuing anything just to be mediocre at it. Which probably explains why I don't pursue anything at all these days, not music, not art, nothing, even though some of the things I could just be no good at I enjoyed doing for their own sake.)

And it struck me -- I realise this is a roundabout way of getting to the point, but it's how I got to it -- that wealth is acquired by those who have an advantage in information, and that has been true throughout history. How did I get there from musing on what I could write? Well, it's simple, really: I realised that because I have a fairly dull life, I feel like I have no information advantage over most readers. What else is a story but something I know and you don't? If I feel that what I know and you don't isn't worth telling, then obviously I don't feel advantaged enough to profit from it.

I came to this conclusion when thinking about the Huns and the other horseborne invaders of Dark Ages Europe. Keegan, in his History of Warfare, is musing on how the Mongols managed to conquer where other similar groups of horsemen did not. He doesn't really come to a conclusion, and I don't know the answer to that question, but thinking about it led me to the realisation that the horse archers of northeast Asia were advantaged in many ways over the settled peoples they pillaged, but above all by their information advantage. What did they know that the settled peoples didn't? Several things. They knew that valour is worthless. They knew that mobility defeats power in warfare. They had a huge advantage in skill (and this should not be undervalued in warfare: the British "thin red line" did not win against the odds just because it had rifles but because it had an enormous tactical advantage over its enemies -- curiously, it succeeded for many of the same reasons as the horse archers: those who specialise in attacking at long range can basically mince those who specialise in war at close order, simply because the latter cannot use its skills. For the same reason, and for another that the Mongols could take advantage of -- having less need of supplies because they were more hardy than their enemies -- Rome could not overcome Parthia.) They also knew where their enemies were.

This cannot be understated as an advantage. The Huns could appear from nowhere, catching settlements unawares, just like human locusts, but the settlements could not sneak up on the Huns. No one could threaten the Huns' own settlements because they were so distant from the point of action, and those who fought them did not anyway know where they were. The Huns seemed to drop from the skies. When they had lived in places where their homes were more vulnerable, they had been driven out, but in later times, when they seemed rootless, homeless, they were close to invincible (and it was basically only betrayal, at Chalons, that saw them defeated, and then only by an enemy, in Aetius, who had learned to be as flexible and mobile as they were).

Note that the Huns did not create wealth. They were wealthy, and the Mongols became even wealthier, but they did not create anything. They took value from the settled people. Here is history in a nutshell: the ordinary people create value, wealth, whatever we call it, and people who have an information advantage steal it from them.

We often hear that rich people have worked hard to acquire their wealth, and I'm sure they do, but they are not wealthy because they worked hard. If they were, Stakhanov would have been a millionaire and my dad would too. I have often thought about Roman Abramovich, a very wealthy man who has never worked at all that I know of, let alone hard. He made his billions by knowing the right people. That too is an information advantage. He has created nothing. He made his money from the natural wealth of Siberia, and simply sat at the apex of corporations that extracted that wealth. Sure, he would have made decisions, but to be honest, in business most decisions make themselves, and all you have to do to profit from them is be in the right place at the right time.

Being in the right place at the right time is a skill in itself though. Realising which things, or which people, you know can make you money is the key to making money. I mean, I'm a smart and capable person, and given the opportunity, I'd be rich. But I have no information that I can turn into dollars bar a knowledge of how English works, and that just isn't as valuable as knowing an oligarch.

Information advantages shift with time, of course. Mongols today are not rich, and before Genghis Khan they were not rich either. Most horse peoples lived very hard lives before they realised they could just steal wealth from the settled peoples. Most never realised their advantage. Currently, the West has a rapidly eroding information headstart (I guess that is the right term), which has made us rich. Anyone who has read Guns, germs and steel cannot help but be impressed with the power of its thesis. Europe conquered the world because it knew more than the world. The reasons for its information advantage are probably less interesting than the power of the advantage itself, but Diamond shows how it came into being. He stresses, and it should be stressed, that there is no inherent advantage in being a white European. If we had came to be in Africa, and Africans in Europe, we would have seen millions of whites enslaved. Racial supremacy is as foolish a notion as you can sign up to. It's all about what you know, not what colour your skin is.

Not all information is valuable, and judging what is and isn't can be very difficult. But the rich do not on the whole acquire their wealth by being good judges of information, but by being fortunate enough to uncover it or to be born as custodians of it. (That's not to say that you cannot create an information advantage and profit from it: that's precisely what you do when you learn to be a doctor, and what I'm seeking to do by learning how to win at poker.) It's not even a question of skill, but of the right skill. The Zulus were incredibly skilled, among the greatest, if not the greatest, exponents of weapons handling at close quarters. But they were still heavily defeated by the British, because we knew how to make and use guns. You need to think it through carefully to understand that what counted was not how skilful each was, but how applicable that skill was. A Hun with a composite bow could kill the best swordsman their enemies could field without that swordsman even being able to see his features.

What counts here is, in part, perspective. A Roman soldier had a huge advantage over other fighters at close quarters. For centuries, the Roman advantage was in knowing that cohesiveness and discipline could overcome personal skill. Then they met the Huns, whose personal skill crushed them. For Romans, for a millennium, war had consisted of getting close to enemies and then slicing them to ribbons. Suddenly, or fairly suddenly, they were facing an enemy whose chief advantage consisted in knowing that war could also consist of murdering standing targets at long range. The same is true of all the settled peoples that the horse archers destroyed. Each was set up to fight other similar peoples, and none could step outside their war paradigm (or was not skilled enough in other paradigms) to defend themselves well against the horsemen.

Information is not just the key to wealth, nor is it merely the key to human relations. It is the answer to life, the universe and everything. We exist because of an information differential, and all of life is a struggle to obtain and profit from information differentials. What makes life, and its highways and byways, maddeningly hard to understand is the difficulty in knowing which information is most valuable. In principle, each unit of information should have the same value (in the same way that each electron is the same electron), and in the bigger scheme of things, that is so. But down here, on the human level, it is different.

I think a lot about equity, and for whatever reason, I'm a true believer in it. At base, it's because I think we have equal value, and because our lives are so short and fragile, I have never been able to conceptualise them as anything other than deeply precious. I feel strongly that injustice is born in unevenness of information, and I feel that ways to diminish its importance should be emphasised if we believe in equity. I note that Rawls, even if he didn't think in these terms, was able to see that the only way to ensure justice was to remove information from our consideration of what is just. He asked that we should make decisions about justice from beneath a veil of ignorance. I would insist that we cannot be just unless we are willing to forget what we know.

Which is not easy. How can it be easy to give up your advantage over others, when you know that they suffer so greatly from lacking what you have? We are all, or at best nearly all who read this, gainers from a huge information gap between us and them. Understanding that you do not have merit, just luck, is extremely hard.

Okay, I'm drunk and can't continue just now. But I have more to say. Among other things, of course I am saying that the rich do not deserve it but are simply using a temporary information gap, and more importantly for most of us, that education, conceived in a broad sense, is the only hope of the disadvantaged, our only road to acquisition of wealth.


At 9:29 pm, Anonymous Dr Zen said...

This comment has been removed by a blog administrator.

At 10:33 pm, Anonymous Anonymous said...

boots sez:

no guts, no glory.

At 5:27 am, Anonymous $Zero said...

But I have no information that I can turn into dollars bar a knowledge of how English works,

It's absolutely astonishing how much information someone like you lacks about yourself.

and that just isn't as valuable as knowing an oligarch.


How much you under value your own abilities!

The most valuable information one can possess is the certain knowledge that your life is always there freely awaiting you to mold it to whatever form your prefer, oligarchs or not.

Don't let the brainwash discourage ya, man.

At 12:25 pm, Anonymous Dr Zen said...

Dude, that's just nonsense. You cannot mould life to the form you'd prefer if that form is in any way complex.

At 7:59 pm, Anonymous $Zero said...

Yes, you can, dude.

If nothing else:

It's a zen thinger.

ba'dum, chsh!

At 8:07 pm, Anonymous said...

But seriously, dude. here's but one example of creativity overcoming oligarchial obstacles:

You just give up way too easily.

At 8:26 pm, Anonymous High in the Sky said...

I thoroughly enjoyed this post, and also gained a significant realisation from reading it: like fish oblivious to the water they swim in, we ignore the information that surrounds us. A valuable insight, and I thank you for it.

I am also intrigued that you chose an example of nomadic people to show how an information advantage brings about the shifts in history. I think that we are entering another era when nomadic, or persons with no fixed property, peoles are going to take over the world for a while.

There are hundreds of businesses failing in the UK. They are following the established paradigm of having a presence on the land, and every month come demands from rate authorities, utility companies, landlords, "pay us or we take you to the courts." With no means of deferring payment until income returns, they go to the courts and vanish.

But at the same time, scammers, spammers, sell-today-and-go-tomorrow companies flourish on the web, popping up from russian or chinese throw-away domains, get their pennies, and vanish. They cannot be traced by the authorities, made to pay rates or taxes, file accounts and obey company laws.

These, I think, are your Huns come back again to plunder our decaying victorian-roman empire.

At 10:55 pm, Anonymous Anonymous said...

boots sez:

In your post's last sentence you say,

"... education, conceived in a broad sense, is the only hope of the disadvantaged, our only road to acquisition of wealth."

I am confused by this. You seem to profess a belief in communism, but the idea of a "wealthy communist" does not compute. Generally the word "wealth" is taken to mean that you have more material stuff than you need. Are you using it in some other sense?

No smartarsery is implied or explicit here. You've written something that does not make sense to me and I am requesting clarification.

At 9:56 am, Anonymous Dr Zen said...

In this post, I mostly used wealth to mean more like "value" than "riches". If you look at this:, you're looking at definition 2.

At 6:15 pm, Anonymous Anonymous said...

boots sez:

So basically you meant 'stuff' but the closest acceptable word was 'wealth', which has one meaning relating to stuff and three related to abundance?

Please pretend I've spewed my rant about the vocabulary available to writers of English, where every dictionary contains too many useless words and never the one that one really wants, while I shrug and move on.

At 7:07 pm, Anonymous Dr Zen said...

No, I meant riches in a sense that is more like value than abundance, that is all. It's precisely the word that I wanted; the same sense is seen in "wealth creation". HTH.

At 7:28 pm, Anonymous Anonymous said...

boots sez:

You wrote, "But I have more to say."

Presumably on the topic of information, or information as applied to "wealth creation"? I look forward to reading it. I'm not sure I'll be capable of understanding it, but I'll give it a try.

In a very broad sense I agree that information is people's only road to obtaining the material objects they need, but I suspect we're talking about different kinds of "information".

At 8:06 pm, Anonymous High in the Sky said...

We are entering the realms of subjectivity here. As I understood Zen's post, information didn't mean "the city is here, on this map", but it meant an inner understanding of the Mongols that if they didn't live in a city, they would be invisible to those whose whole life was set in stone.

The city dwellers presumably had maps, but didn't realise that a map is not a piece of information. It might impart knowledge of where other things were that were already known to the map-makers, but it couldn't help you with the unknown.

I have come to realise that what I called information wasn't, it was simply a cataloging of known facts.

At 8:21 pm, Anonymous Anonymous said...

boots sez:

"As I understood Zen's post, ..."

Definite subjectivity going on... I tend to read literally unless it's pretty obvious what's writ isn't intended to be taken as it's written, and by "pretty obvious" I mean hit me in the head with a stick obvious.

"I have come to realise that what I called information wasn't, it was simply a cataloging of known facts."

I'm not too bright, it's taken me a number of decades to realize that my catalog of facts amounted to a list of assumptions and that many of them were falacious.

At 2:41 am, Anonymous Anonymous said...

Okay, I've re-read the post through. This time I'm not distracted by the apparent contradictions and I understand by and large what you're trying to put forth Zen.

I'm offering these comments without smartarsery, in all seriousness:

"Here is history in a nutshell: the ordinary people create value, wealth, whatever we call it..."

I disagree. Ordinary people create nothing except more people. The fact that they are the machine that manufactures shoes does not mean they have created the shoes.

The man who invented the bow, the man who refined the bow into the compound bow, those men created something, they brought an idea into the world in material form. But those were not ordinary people by any means.

"... and people who have an information advantage steal it from them."

I disagree here also, it is people who have a manipulative advantage coupled with a lack of integrity who steal from others, whether or not they have any information advantage; having an information advantage does not make one a thief, it simply makes thievery easier.

"... I'm a smart and capable person, and given the opportunity, I'd be rich."

Here again I have a different take on it Zen.

Given the opportunity you would not be rich because that is contrary to your essential nature.

"... But I have no information that I can turn into dollars bar a knowledge of how English works, and that just isn't as valuable as knowing an oligarch."

Now here you are working along an entirely different tack. In one case you speak of an informational advantage as some view of things that lets you take value from others. Yet here you speak of informational advantage as though it can be traded for dollars. They are different things, at least in my view.

Now, you may delete this comment as you deleted my earlier one, there's no way I can force you not to. But knowing that you will at least read the comment when it arrives in your email, I want to tell you this: opportunity does not operate in random fashion.

At 4:53 am, Anonymous Anonymous said...

Thanks for the post, Dr Z. It's this sort of thing that's kept me reading over the years, if only in the shadows.

Wish you the best.

At 7:45 am, Anonymous Dr Zen said...

boots, you are not sufficiently distinguishing the creation of information, in a broad sense, from the creation of wealth. (You could argue that information cannot be created, only discovered, and I intend to in a further post.)

You are also ignoring that a thief can only steal if he knows how to. How would you rob a bank? How do you know that that is a good method?

I don't see any problem in understanding that an information advantage could equally be used to steal value from those who create it and to acquire value from those who have a store of it. The mechanisms aren't the same, but your cavil basically would be the equivalent of saying that the thing a battery stores and the thing that runs your TV are not the same thing because one uses a chemical process to create it and the other a physical one. You simply are not pinpointing what each has in common.

At 8:20 am, Anonymous Anonymous said...

boots sez:

I certainly agree with whatever you just said. Moving along smartly then.


Post a Comment

<< Home