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322 sats \ 3 replies \ @siggy47 10 Mar freebie \ 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.
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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.
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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.
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