
Hidalgo's groundbreaking exploration reveals how information shapes economies through physics and networks. Praised by Steven Pinker as "thoroughly original," it redefines growth beyond capital and labor. What if knowledge networks - not resources - determine which nations truly prosper?
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A $2.5 million Bugatti crashes into a wall. Every atom remains-the carbon, the aluminum, the rare metals-yet the car's value vanishes instantly. What disappeared wasn't matter but arrangement. This distinction reveals something profound: information isn't abstract code floating in clouds; it's physical, embedded in how atoms organize themselves. When we grasp this, economics transforms from a social science into a branch of physics. The Bugatti's worth lay not in its materials but in their impossibly precise configuration-one arrangement among countless trillions. This is why a Rubik's cube, with its 43 quintillion possible states, has value only when solved. The rarity of ordered states makes them precious. Every product, from smartphones to skyscrapers, represents a victory over randomness-atoms coerced into improbable patterns that perform useful functions. Understanding this physical nature of information bridges thermodynamics and trade, explaining why prosperity clusters in certain regions while eluding others. The universe marches toward disorder. Thermodynamic laws are unambiguous: entropy increases, systems decay, order crumbles. Yet here we are-living, thinking, building civilizations of staggering complexity. This contradiction tormented 19th-century physicists who couldn't reconcile observable reality with fundamental laws. If entropy always wins, how do babies grow? How do forests emerge from seeds? Ilya Prigogine cracked this puzzle by showing that Earth functions as a special pocket-an out-of-equilibrium system continuously fed by solar energy. Like whirlpools forming in rivers or hurricanes organizing from atmospheric chaos, life and civilization emerge naturally when energy flows through systems. Earth exports entropy to space while building complexity locally. This framework connects biology to economics: both involve systems accumulating information through energy-driven processes that resist entropy's pull.
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