The Silicon Edge: Don’t Worry, We’ll Make More

I think it was an episode of the Twilight Zone. I am hazy now on some of the details but the general idea was that a bunch of criminals hook up with a mad scientist to steal $1 million in gold (worth a mere $35 per ounce back then) and then put themselves into artificial hibernation for a century, planning to wake up rich and free.

It all goes surprisingly well except that, having gone to bed greedy, some of the thieves wake up grumpy and proceed to kill each other.

But the survivors look forward to their golden prospects — only to discover that in this improbable future gold has become worthless because science has long since discovered how to synthesize the stuff. Perhaps someone invented blockchain.

Rod Serling’s criminals end up in their hell for the usual reason: they have been seduced by the materialist superstition.

This is the belief that wealth comes from things, not thoughts; from vaults, not virtues; that the riches of one person causes the poverty of others; that we have been born into a satanic world of war, all against all, to survive only by grabbing more than our fair share of a pittance doled by a miserly deity amused to watch us fight for the scraps.

The temptation is best expressed as the lust for guarantees, the desire to make sure, to be able to “count on it” as the starving miser counts his gold.

Compared to thoughts, things seem so sure and solid. Surely this is the anxiety that drove all socialist dreams of a central plan. The wish to guarantee the future, to fight off the chaos that threatens from every side, when it is actually in the apparent chaos, the upside surprise of entropic creation, that salvation lies.

So Easy a Caveman Could Do It?

Most of the world has long lost its faith in the old socialist central planning. Replacing it, as my colleague John Schroeter points out brilliantly in his book Moonshots (co-authored with Naveen Jain) is a new faith in “sustainability.”

Epitomized by newly fashionable ESG investments (Ethical, Sustainable, diversely Governed), sustainability is as beguiling as the socialist dream must have been before it was tried at the cost of more than a hundred million dead in the last century. The ideology of sustainability rests on two ideas which can kill even more people than socialism.

  1. There is a finite and roughly approximated limit to the resources (always described as “natural resources”) available to support human life.
  2. Since resources are finite, our only available course of action is to use less of them, delaying their final, fatal depletion, and relying on those most apparently “renewable” or sustainable, such as sunlight.

Among many other weaknesses, John points out that if premise number one, “resources are finite,” is true, then solution number two, “use less,” is futile. By how much should we reduce our consumption? Ten percent, which sounds difficult enough, thereby extending our prospects from 100 years to 110? Even the amount of sunlight that reaches the earth is finite. If sustainability is our best answer, humanity is unsustainable.

As John points out, essentially every government on earth and the public relations department of nearly every major corporation is committed to sustainability as the plan. To the prospect of Armageddon, they reply with one resounding, defiant voice: “Recycle!!!!”

Fortunately, many of the very same companies that do verbal obeisance to the suicide pact of sustainability are daily engaged in disproving its premise, the very notion of natural resources. The resources supporting human life have not been natural since the first caveman formed the first tool.

Limited to the technology of even 150 years ago — well after the invention of the railroad and the telegraph — most of the current population of the earth would die out in a year, never mind a century.

Most of the wealth of the world today relies on a resource as abundant to that caveman as it is to us.

Silicon is the second most abundant material on earth — topped only by oxygen — which in combination with silicon makes sand. The silicon in a microchip derives its entire value from human minds, from the information inscribed upon it. In turn, this has enabled a flow of information outstripping all the accumulated science of centuries within a few decades and turned scarcity into abundance wherever we turn.

Whether turning useless expanses of rock into reserves of fuel outstripping every dream of a Rockefeller, turning the Israeli desert into a land flowing with milk and honey, or extending the most precious resource of all: the span of human life. By cracking the genetic code, every hope for the future has come not from the conservation of resources but their new creation. Even the electromagnetic waves currently auctioned by governments for communications as if they were natural to have to be created by engineers contriving lasers, masers, radios, and other transmitter-receivers.

Time-Price Proves Sustainability

The time-prices calculated by Gale Pooley and Marian Tupy prove this point. Measured in the number of labor hours needed to buy an additional unit of a good or service, the more the population grows the more abundant become so-called “resources.” Since 1980, while the global population grew 71 percent, the cost of the 50 crucial life-sustaining commodities dropped 72 percent. While CO2 in the atmosphere increased 22 percent, agricultural output plunged in price some 70 percent. By this measure — the true price measured in time — abundance grew 518 percent.

As an investor, always bet against sustainability. It’s worse than worthless, even if Larry Fink of Blackrock in his Davos dotage decides to bet on it with all his trillions of hedge funds. Even if regulators across the world mandate it. Even if the churches sanctify it. Even if the folks at Davos can imagine nothing else for their grandchildren. Sustainability, like equilibrium, is death for the planet and us.

Wealth is knowledge; growth is learning; money is time. Those are the key assumptions of the Information Theory of Economics.

Profits come from human creativity, which always comes as a surprise to us. All government guarantees “sustaining the present” stifle learning and growth. And most importantly, they deplete wealth.


George Gilder
Editor, Gilder’s Daily Prophecy

You May Also Be Interested In:

George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology — and its impact on our lives.

He’s an established investor, writer, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

And he’s certainly no stranger to the financial newsletter...

View More By George Gilder