My Hoover colleague Tunku Varadarajan did an excellent interview in the Wall Street Journal (gated) with George Gilder, who has been on the leading edge of understand the computer revolution for over 30 years. In fact, he did an entry for the first edition of The Concise Encyclopedia of Economics titled “Computer Industry.” It was written in early 1991 and published in August 1993, and it holds up quite well. (Unfortunately, with our new format, the older edition is not online yet.)

Update: The article “Computer Industry” is on line in the old format. Thanks to Lauren for catching this.

Gilder has a number of great insights that I want to highlight, along with one policy proposal that I think is terrible. Here goes.

“Machines can’t be minds,” he says. “Information theory shows that.” Citing Claude Shannon, the American mathematician acknowledged as the father of information theory, Mr. Gilder says that “information is surprise. Creativity always comes as a surprise to us. If it wasn’t surprising, we wouldn’t need it.” However useful they may be, “machines are not capable of creativity.” Human minds can generate counterfactuals, imaginative flights, dreams. By contrast, “a surprise in a machine is a breakdown. You don’t want your machines to have surprising outcomes!”

Well said. I’m not saying Gilder is right, but I think he’s right.

The narrative of human obsolescence, Mr. Gilder says, is giving rise to a belief that the only way forward is to provide redundant citizens with some sort of “guaranteed annual income,” which would mean the end of the market economy: “If everyone gets supported without any kind of growing up and facing the challenges of life, then our capitalist culture would collapse.”

Again, well said. This seems obvious to Bryan Caplan and me: we’ve both written about it at length. I’m surprised that a substantial minority of libertarians believes in a guaranteed annual income.

Mr. Gilder worries deeply about the state of capitalism in America, and President Trump’s adamant focus on the trade gap irks him. “To the extent that the U.S. is the world’s leading capitalist power and welcomes foreign investment, it can’t possibly run a trade surplus.” Mr. Trump “is a politician, and his chief goal is to communicate to the unions in the Midwest that he’s on their side. Besides, it’s a lot easier to blame China than it is to really explain the widespread campaign in the colleges of this country to suppress manufacturing and industry in the United States.”

I worry about it too and I, like Gilder, am concerned about Trump’s adamant focus on the current account deficit. Gilder’s not quite right though in saying “To the extent that the U.S. is the world’s leading capitalist power and welcomes foreign investment, it can’t possibly run a trade surplus.” The United States could welcome foreign investment and still have a capital account deficit as long as other countries “welcomed” investment from the United States even more. And, as I’ve noted elsewhere, a current account surplus is not the same as a trade surplus.

He tells me here that “human beings have a propensity to believe in leftism”—in the idea that government can “answer all of their problems, guarantee their future, and relieve them of the challenges of life.” The idea of a “completely providential government” arose in America, and a “whole generation of young people were given college loans in a fabulous national mistake, in which the Republicans participated.” These loans were used by the university system to “increase perks and tenured luxuries and ideological distractions”—all of which led to the “diversity campaigns and CO2 panics” that currently dominate university faculties.

Basically correct.

And the very next paragraph:

The only way to undo this “vast blunder,” says Mr. Gilder, is to forgive student loans across the board and “extract the money from all the college endowments and funds that were used to just create useless departments and political campaigns.” More than $1.5 trillion in student-loan money is outstanding, according to the Federal Reserve. That money, Mr. Gilder says, “wasn’t deployed to improve education. Not a scintilla of evidence has been adduced that learning has been improved. It was used entirely to lavish on bureaucracies that, in turn, paid tribute to government and leftist nihilism.”

We can argue about whether forgiving student loans across the board is a good or a bad idea. I think it’s a bad idea. One reason, which is ironic given Gilder’s view that youths have become irresponsible, is that it takes away their responsibility. No matter how misled they were about the value of a college education, at key points, they were the ones who decided to take out those loans.

But the really horrible idea is his proposal to “extract the money from all the college endowments and funds that were used to just create useless departments and political campaigns.” The extraction would necessarily involve the use of government force because Harvard, Yale, and about 100 other colleges are not about to give up, in total, hundreds of billions of dollars. It’s true that those colleges probably lobbied for more government loans. But many people lobby for many bad things and the idea that they should have their wealth forcibly extracted because they so lobbied is plain wrong.

The impact of these loans, and of the academic ecosystem they engendered, has been catastrophic, in Mr. Gilder’s view. “The result was to destroy the entrepreneurial optimism of a whole generation of young people, to drive them toward socialism, which they now tend to favor, and to even dissuade them from marriage.” The last is a consequence of debt, “which cripples them for the future.” Any benefit that education might confer on the young is, in Mr. Gilder’s dark view, nullified by the economic burden inflicted on them, which “leaves these kids impotent in the world.”

Somewhat overstated but there’s a lot to it. And, by the way, to the extent they are impotent, you probably don’t make them potent in the way that Gilder and I would like to see by telling them that they are not responsible for paying off their debt.

Although Mr. Gilder is a critic of Google, he disapproves of Mr. Trump’s talk of regulating the search engine—a prospect the president raised in a tweet describing its results as “rigged” against him and possibly “illegal.” This is no time, Mr. Gilder says, “for American conservatives to advocate an expansion of the administrative state into social networks and search engines.” If right-leaning content ranks low on Google, that shows that “conservatives still have a long way to go if they are to prevail in the opinion wars on social media. They cannot expect the government to do it for them.”

Well said.