The Chinese Century and Biologic Laws

Economics is History masquerading as Physics.
I have introduced to you my belief that the 20th Century was best conceptualized by the Laws of Physics, driven by Energy (think of WW2 as the "war of oil") and communicated in the math of Calculus. I think that the 21st Century will be best understood through the Laws of Biology, driven by Information, and communicated throught the math of the Algorithm (computers). Two of the laws that I have become aware of, but barely understand, are evolutionary algorithms and cellular automata. The former teaches that information can be created without a directing intelligence, by setting up a system with choice and competition. To see this in action, view this brilliant example of the Blind Watchmaker on YouTube: (http://www.youtube.com/watch?v=mcAq9bmCeR0). Cellular automata teaches us that very complex systems can arise from simple rules. To see an example of this, see Wikipedia's entry on Conway's Game of Life: (http://en.wikipedia.org/wiki/Conway%27s_Game_of_Life).
These ideas are much better constructs for understanding people's behaviour than anything in physics. The reason for this is that the laws of physics teach constancy. For example, Charles' Gas Law teaches that if you keep heating a balloon, the gases will keep expanding until the balloon pops. This is as true now as when Charles first described it in the 1780's. The laws of biology, by comparison, teach change, due to increasing information. The balloon that Charles popped in 1780 didn't reproduce and so to survive and reproduce, balloons would have to find a means to relieve the pressure. There would be many possible adaptations and the best would be sorted out through selection. This means that if you tried to reproduce Charles' experiment in a biologic balloon world, you might get a different result than he did.
It is instructive to apply these ideas to economics, a biologic system based on information. Niall Ferguson has written an article on the rise of China (http://online.wsj.com/article/SB10001424052748704104104575622531909154228.html?KEYWORDS=niall+ferguson). In this article, he states that the 500 years of Western domination were based on six "killer applications":
" Competition: Europe was politically fragmented, and within each monarchy or republic there were multiple competing corporate entities.

• The Scientific Revolution: All the major 17th-century breakthroughs in mathematics, astronomy, physics, chemistry and biology happened in Western Europe.

• The rule of law and representative government: This optimal system of social and political order emerged in the English-speaking world, based on property rights and the representation of property owners in elected legislatures.

• Modern medicine: All the major 19th- and 20th-century advances in health care, including the control of tropical diseases, were made by Western Europeans and North Americans.

• The consumer society: The Industrial Revolution took place where there was both a supply of productivity-enhancing technologies and a demand for more, better and cheaper goods, beginning with cotton garments.

• The work ethic: Westerners were the first people in the world to combine more extensive and intensive labor with higher savings rates, permitting sustained capital accumulation."

This list could serve quite nicely as the "set up" rules of a cellular automata program. The first Ferguson parameter, competition, and parameter 5, consumer society (choice), sets up an evolutionary self-teaching information-adding program. By adopting 4 of the 6 rules, China is getting the predicable result of good economic growth. This has been rapidly accelerated by the fact that they can just copy our science and technology. It is interesting to speculate on the effects of not using two of the rules; representative government and a consumer society. Only a physics-minded economist would try to predict with any confidence.