The Quantum Economy

As we approach the 21st century, we are entering the quantum era of economics and technology. Quantum physics is a [...]

September 1 1988 by George Gilder


As we approach the 21st century, we are entering the quantum era of economics and technology. Quantum physics is a complex and elaborate theory of the nature of physical reality. But it can be summed up in a simple proposition-the overthrow of matter. In quantum theory, the materialist superstition has collapsed at the heart of matter itself. The most important intellectual event of our century, this development is now transforming all industry into a quantum economy.

The previous theory-Newtonian physics -had enthroned matter. All Newtonian reality consisted of “hard impenetrable particles of mass.” Upholding the primacy of the human senses, Newton said we understand that nature is made of hard, impenetrable, extended bodies “not from reason but from sensation.”

Quantum theory shows that Newton’s massy particles spring from a further domain in which Newton’s laws are inapplicable and sensory evidence is irrelevant. The irreducible atom of quantum theory is not a “massy particle” but a quantum of information-a probability amplitude. It defines the likelihood of finding a quon, a quantum entity, at any particular point, but does not exclude the simultaneous possibility of it being somewhere else as well. A probability amplitude is less a “thing” than it is a “thought;” it takes physics beyond matter.

The overthrow of Newton’s opaque solids represented a Copernican moment in modern history. In the early 16th century, Copernicus displaced the earth from the center of the universe. Early this century, quantum physics displaced human senses as the central test of reality. Newtonian physics was intelligible to human beings; but it rendered the solid state unintelligible and opaque. The paradoxical propositions of quantum theory are utterly unintelligible to the human sensory system, but they render the inner space of matter intelligible. By dethroning the senses, quantum theory exalted the mind and allowed access to the microcosm.

The practical entry into the microcosm is creating a global quantum economy. Just as the essence of quantum science was the overthrow of Newtonian matter in the explanation of the universe, the essence of the qauntum economy is the overthrow of Newtonian matter in the creation of new wealth. Throughout all previous human history, the creation of wealth depended upon the extraction, elevation, transport, manipulation, combination, and modification of heavy materials against the resistance of gravity, the demands of entropy, and the constraints of time and space. Today, new wealth is chiefly created by reaching beyond mass into the quantum domain and manipulating matter from the inside. Lending imperious importance to the transition to a quantum economy is its embodiment in the most workaday machines of the era of computers.

Consider, for example, the Cray supercomputer that performs 10 gigaflops (that is, 10 billion floating-point operations per second), or the gallium arsenide transistor at Bell Labs that switches 90 billion times per second, or the fiber optic cable that transmits information at a rate of 20 gigahertz (20 billion pulses per second), or the satellite system that dispatches terabytes (trillions of characters) of information around the world in seconds. Such raw speed and volume is beyond easy human comprehension or analogy.

In this domain, for example, “real time” has become familiar as a synonym for no time. A computer is said to operate in real time when its results seem instantaneous, registering simultaneously as events are recorded. No time elapses in real time. “Real space,” similarly, might be used to mean no area or volume. For example, an electron-the central unit of electronics-cannot be isolated at a particular point.

A transistor occupying a point on an integrated circuit less than one micron (one millionth of a meter) square-and managing many trillions of electrons that cannot be tied to any particular spot at all-could be said to operate in real time and space.

The microcosm is called solid state. Yet the crucial insight of solid state physics is that nothing that humans conventionally call solid is actually solid at all. The floor beneath your feet consists of atoms more than 99.9 percent space. In proportion to the size of its nucleus, the atomic system is as empty as the solar system.

Such propositions seem amazing only from the viewpoint of the materialist superstition, in which we imagine that our senses are central. In a mind-centered system, modern physics is more practical and realistic than the deterministic materialism of the old physics. By conquering the imagined limits of conventional time and space in the microcosm, mankind has vastly enlarged the dimensions of human life. It has opened a continent far more capacious than Columbus’ America, or the wastes of loss and entropy beyond the planets. Indeed, by opening inner space, man gained the technologies that made possible the human exploration of outer space and the creation of a global ganglion of cables and satellites that transmit information at near the speed of light.

At the heart of the quantum economy is the transistor. While the first transistor radios thirty years ago used far less efficient and versatile transistors that cost some $9 dollars apiece, transistors now are invisible and virtually free. Joined by the hundreds of thousands in some of the latest chips, the fantastically shrinking switch now costs eight ten-thousandths of a cent. The compounding of such benefits is the chief source and secret of the creation of wealth in the quantum economy.

From the silicon in grains of sand, the transistor generates imperishable gains of knowledge that grow as they are shared, and that overcome all the dismal sciences of limited growth. The zero sum economics of materialism and entropy give way to the unlimited creativity of the human mind. The new physics thus restores man to the center of a God-ruled universe, in which mind is the paramount resource.


George Gilder is the author of Wealth and Poverty, The Spirit of Enterprise, and the forthcoming Microcosm (Simon & Schuster).