Information is created, not prescribed, in both development and economics

The science of development, whether as morphogenesis or motor behavior, faces an important but challenging question: where is the information necessary for development stored? Is the information stored in the genome? No—genes are for making proteins, which are probably examples of capital in economics, not for telling the organism how to develop. Is the information stored in the environment? That doesn’t seem right either. Is it stored in both the genes and the environment or in their interactions or something else? None of these answers are satisfying or match observation.

Another possibility is that developmental information is created by the process of development. The group-level preferences for developmental outcomes are constructed by the interactions of the parts, not specified ahead of time. The parameters of the cognitive glue don’t read out a particular developmental goal state but instead simply are whatever they need to be to achieve economic equilibrium relative to the internal and external conditions.

Here’s what I mean. Suppose—this isn’t true, but just suppose—that there is a developmental outcome specified ahead of time that is stored somewhere, and the cognitive glue knows what has been specified and is trying to achieve this outcome. Then there is no way to deduce the resulting model the cognitive glue will become; it is just a question of whatever parameters happen to achieve the outcome in relation to each other as constrained and built out by the internal and external conditions. Now, even if you remove the part about the developmental outcome being specified ahead of time and stored somewhere, the idea remains: the cognitive glue doesn’t encode particular ideas but is instead just whatever it has to be to reach equilibrium. That’s because there’s a sense in which all the model is trying to be is a set of affordances for the members of the collective to take advantage of to achieve mutually compatible plans with respect to each other and the environment.

Esther Thelen and Linda Smith observed that there is no resolution to the question of whether the information is stored in the genes or the environment because the information doesn’t preexist the process of development (emphasis added):

Traditionally, developmentalists have looked for the sources of new forms either in the organism or in the environment. In the organism, complex structures and functions emerge because the complexity exists in the organism in the form of a neural or genetic code. Development consists of waiting until these stored instructions tell the organism what to do. Alternatively, the organism gains new form by absorbing the structure and patterning of its physical or social environment through interactions with that environment. In the more commonly accepted version, the two processes both contribute: Organisms become complex through a combination of nature and nurture. For instance, the guiding assumption of developmental behavior genetics is that the sources of complexity can be partitioned into those that are inherent, inherited, and absorbed from the environment. But whether development is viewed as driven by innate structures, environmental input, or a combination of the two, the fundamental premise in the traditional view is that “information can preexist the processes that give rise to it” (Oyama, 1985, p. 13).

The same question exists in economics. Where is the information stored that is necessary to achieve economy-level goals? Is it in the preferences of the people? Is it in the conditions of the world that influence the relative scarcities of all the resources the economy uses? Somewhere else? A combination?

The answer again is nowhere: the information is created by the processes that give rise to it; it is not waiting to be discovered, but develops in conjunction with the processes that make use of it: prices are created by the interactions of people who use prices to make decisions.

This is why I think of markets as an apparatus for making measurements with, analogous to a scale or a telescope: it’s a system for producing information. But while we can sometimes conveniently imagine that information is stored somewhere, waiting for us to discover it, this view just doesn’t work in both development and economics. Measurements are created by the measuring system as an interaction of objects whereby we can make predictions about one object (such as a planet far away) by studying how another object is transformed with respect to it (such as the image captured by the telescope).

Markets measure relative scarcities by getting the members of the economy to construct the information as the parameters of a shared model. We don’t know how to create the information, but we know how to use markets to get the members of the economy to create the information.

So one of the deep connections between development and economic activity is that both are about a system reaching goal states not by reading off previously stored information but by creating the information itself in the process of problem solving. It’s what Esther Thelen called multicausality: there’s no privileged part of the system driving everything else; rather, everything has to come together as agents to produce the outcomes.