322 sats \ 3 replies \ @siggy47 10 Mar \ on: Compressing Information for Other Humans and Self mostly_harmless
The paperback version of Adam Smith's The Wealth Of Nations is 692 pages, yet I have freely reduced it to the phrase "the invisible hand", which I don't think he even used in his book.
Speaking of which, I wonder if the idea of loss compression applied to money and price could be a genuine criticism of the free market- is it possible for all the points of information to be compressed to price?
I wonder if the idea of loss compression applied to money and price could be a genuine criticism of the free market- is it possible for all the points of information to be compressed to price?
I think that's a compelling criticism of the free market. Prices often don't reflect negative externalities. Strangely, I can think of cases where prices do reflect purported positive externalities like in ESG products.
reply
The side of the free market that people don't pay enough attention to is property rights. The externalities people talk about as problems for the free market are usually a result of poor property rights assignment or enforcement.
reply
is it possible for all the points of information to be compressed to price?
I think it would be possible, even though it isn't happening now. But even if it were to happen, we'd have to keep in mind that it would be a lossy compression.
Relevant to btc, now that I think about it, as a kind of one-way function. In the theoretical limit case, which we could only asymptote toward, you could "hash" all possible information into the price; but, given the price, you couldn't reverse that process and understand the thing in anything like its full complexity.
reply