The Formal Foundations of Intelligent Economics

This episode, the fourth of a four-part series, discusses the appendices from a book that introduces a new scientific framework called Intelligent Economics, which posits that complex, persistent systems like economies evolve to minimize their total computational cost, a principle termed the Sorter's Law. Appendix A meticulously details the formal foundations of this theory, deriving the Lagrangian—the instantaneous computational cost—from three irreducible components (Predictive Error, Model Complexity, and Update Cost) and establishing the emergence of the four MIND Capitals (Material, Intelligence, Network, and Diversity) as necessary assets for long-term persistence. Appendix B establishes a deep, structural isomorphism between Intelligent Economics and the architecture of modern Generative AI systems, translating core economic concepts into their direct counterparts in machine learning, such as equating the economic Loss Function with the AI training process. Finally, Appendix C functions as a practitioner’s guide, providing a detailed MIND Dashboard with specific, measurable indicators for assessing the vitality of a civilization, company, or individual by moving beyond traditional metrics like GDP.

References

The Last Economy: A Guide to the Age of Intelligent Economics by Emad Mostaque, pp. 150-176, available at: https://ii.inc/web/blog/post/tle

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