and benefits society. it starts now on booktv. >> you are washing booktv on c-span2 but were on the location in las vegas at freedomfest which is a gathering of libertarians. and joining us now is a best selling author and economist george gilder. whose most recent book is "knowledge and power: the information of capitalism and how it is revolutionizing our world." how many books have you now written. >> guest: about 17 or something like that. >> host: how is this one different from your previous book? >> guest: this one sums up all my books. ..

it's all based ultimately on affirmation theory, and what this book does is show that information theory is the foundation of capitalism. that capitalism is not cheaply an incentive system as most people believe, driven by greed or whenever. it is an information system driven to create knowledge, and all wealth consists of knowledge . thomas soul, years ago, pointed out that the neanderthal in his cave had all of the natural resources and all the physical appetites that we have today. the difference between us and

him is, we know more. >> host: when you talk about an affirmation. and information economics, what exactly do you mean? >> guest: there is a revolution and mathematics and that 20th-century that a lot of people have not yet grasped. it was launched by einstein's best friend. he would walk to work with einstein for ten years, 20 years in princeton. and he proved that to any logical system, including mathematics, is dependent on axioms that it cannot prove. last year steven lambert said that mathematics is the only state based science that can prove it. and this is a revolution that was held up by alan turn who created the original abstract

computer technology in an effort to disprove. instead, he wanted to build the ultimate all-purpose computer. he discovered that just as mathematics is limited by incompleteness, so is computer science. and he concluded that ultimately all computers are dependent on a creator, which she called an oracle which computer science is a programmer. and all i did was extend this inside and say that in economics the oracle is the entrepreneur. >> host: george gilder, you have a chapter in "knowledge and power", entropy economics. >> guest: well, and to be

economics, i get that title from brad swanson, his website called entropy economics. he writes about telecom brilliantly. and in to the economics is really another way to say economics based on of affirmation. >> host: is this a supply-side economics book? >> guest: yes coming it is. it shows that demand is really almost devoid of information so that all the knowledge and the economy really is coming from the supply, the goods and services that will create and trade with one another. and again, as thomas pointed out, all economic transactions are really transactions of knowledge, differential knowledge. each of us knows different

things, and that is really what we are trading. the material is conserved in physics. that is, you cannot create more of it. and all of the changes and progress that we enjoy come from the advance of knowledge and learning. they're is a lot in this book about the learning curve that is really the foundation of economic progress. >> host: you talk about the company qualcomm and "knowledge and power." why? >> guest: qualcomm is a great company. it was really the foundation of the wireless bonanza cornucopia that we are all enjoying today. it really was launched by qualcomm. i was there talking to andy and

irwin jacobs and john paul jacobsen later took over the company. they introduced me to every nation theory. it's the one who is claude shannon? >> guest: the founder of information theory and was the teacher of irwin jacobs, founder of qualcomm. the key insight to that shannon offered was to define information as a surprise. freedom -- intimation with shannon is freedom of choice. the more freedom of choice that the creator had, the more and permission he can convey. and so shannon allows you to put freedom at the very heart of the capitalist economy. not only as a condition for

enterprise, but also as a measure of the permission and as a criterion for creativity. so shannon information theory, which is the foundation of all these technologies that we enjoy in, all the information tools that are the heart of world economic growth is based on freedom. that is why freedom fest is a good place to celebrate shannon. >> host: george gilder, we are talking with several economists and people with opinions about the current political situation in america. a couple of the interviews that we have done here, people have expressed concern about the debt that the u.s. is carrying and that there is going to be a comeuppance shortly. do you subscribe to that? >> guest: no. i think that is serious. but the great thing that this book shows if we have the

knowledge economy, and economy of mind, it can change as rapidly as people's minds change. the problem in the united states is not dead. it is socialism. we address the problem of increasing exercise and government power to make up for government ignorance. debt is trivial if we can surmount the problem with socialism. if we continue down the socialist path, like many countries over the years, the debt will become unsupportable and kill us. but the problem is socialism, not that. >> host: in york chapter, the outsider trading scandal, you write, with inside information's vanishing from public markets, privateers captured the wealth.

gains go to the residual inside traders who are legally permitted to learn the intimate facts of the companies in which they invest. >> that's right. the government's effort to ban inside knowledge under fair disclosure essentially banishes knowledge from market and stultifies markets and undermines the u.s. economy. fraud, insider fraud can be prosecuted under fraud laws, but fair disclosure laws and inside trading loss really just drive the information out of the economy. the government essentially tells you don't invest in anything the you know about. other governments tell you invest in the state lottery where nobody knows more than you

and the fact is that capitalist economies are based on knowledge the more knowledge is in the market the more wealth can be created. all the efforts against public disclosure and to try its the constipate the whole and formation process and do a few key moments of disclosure like quarterly earnings statements and merger and acquisition, that increases the incentives to do fraudulent insider trading and actually increases inside trading which would not be a problem if all of the information from companies could go public. >> host: who is your favorite economist? >> guest: john baptiste. my favorite social thinker is

thomas. all kinds of terrific economists who i follow. steve forbes should be president. he is at freedom fest. the inspiration for all of us. lucid and economic analyst and exponent as there is. >> host: what was your relationship with milton friedman and would he have been comfortable at freedom fest? >> guest: milton friedman is a hero of freedom fest. free to let jews and always heroic celebrations of freedom. obviously making a great libertarian hero. however, i believe that milton had too much focused on capitalism as incentive structure. not enough focus

creativity of our entrepreneurs. he thought money had its own power. my belief is the power of money derives entirely from knowledge. money without knowledge falsifies and economy. it does not stimulated. >> host: chapter 25 is entitled, the power of giving. you begin it with a short sentence, capitalism begins with giving. >> guest: well, this is what is hard for a lot of people to understand. a lot of people think giving is easy, that you can give stuff to people and it will benefit them. but the fact is, as anybody knows who has received all sorts of inappropriate christmas and birthday presents or whatever, how hard it is to give something that actually ratifies its recipients. end investment is a form of giving. you don't control the response.

you're giving your wealth to another person, a company or an individual in the hopes that they will use your wealth productively. but you cannot guarantee it. and the crux of knowledge creation is no guarantee. if you have guarantees, there cannot be any knowledge created. because knowledge has to be false a viable, as copper showed. you have to be able to falsify your proposition. bankrupt the company. if they cannot fail, they cannot succeed. they cannot yield knowledge. >> host: ready you grow up and how did you get started? >> guest: i grew up in the western part of massachusetts. and i got -- my father, richard

gilder, wrote a book about and tangible capitol way back when he was in college. and he would be killed in the second world war. he was an early entrant in the second world war, went to germany in 1936 with david rockefeller, actually. he fought hitler and decided it was going to be necessary to defeat germany, that there was no negotiation possible. and so he entered the war and lost his life. >> host: was see a professor at the time? >> guest: no, he was a writer. he actually is an entrepreneur at tiffany and company. while doing civilian flight training so he could enter the war when it happened. and he wrote his thesis, which i

did not discover until after i had written wealth and poverty on in tangible capital. and it is a key explanation of knowledge and power. >> host: george gilder, and your chapter in knowledge and power on the scandal of money you're right about the president's economic adviser. the government's eventual multibillion-dollar profit on the deal may influence the future nobel nominations. in any case, the chairman of the president's council of economic advisers exhibited as little understanding of banking and financial crises as most intemperate tea party work occupy wall street rendered. >> guest: you know, a lot of people imagine that during the 2008 crisis these government officials like hank paulson who made key decisions, geithner,

actually knew something. all of the reports from the actual deliberations showed it was a pure crisis. they did not know anything. and their solution was to excerpt government power as a replacement for actual knowledge and the knowledge was out in the economy, but instead they sucked up all of the power into washington and actually perpetrated the very extended depression that they thought they were supporting. >> host: as we are taping this interview, the markets have hit pretty historic highs. how do you see the economy and the markets in a general sense? >> guest: a general sense, it depends on a program of

deregulation to unleash the new companies on the frontiers of the economy. the big companies are doing fine. they have the power to the fight government regulators and lawyers to negotiate their way through the mazes. it is almost impossible to have the initial public offering today. and all economic growth ultimately derives -- not all, but virtually all comes from entrepreneurial companies financed by venture-capital lists. and 21% of gdp even is attributable to companies supported by venture capitalists. 65 percent of market cap comes from companies that were launched by venture-capital lists. and so if you support ipo that

may be good for the surviving company's, but it is bad for the future. >> host: we have been talking with george gilder. his 17th or so book, best-seller, "knowledge and power". this is book tv on c-span2. >> you're watching c-span2 with politics and public affairs weekdays featuring live coverage of the u.s. senate. on week nights watched the public policy events, and every weekend the latest nonfiction authors and books on book tv. you can see past programs and get our schedules at our website and join in the conversation on social media sites. >> here are the best-selling hardcover nonfiction books according to the new york times. this list reflects sales at -- as of august 22nd.

>> paul cantor talked with book tv about the invisible hand in popular culture at freedom fest, the libertarian conference held annually in lost vegas. he looks at the themes of liberty and freedom that have