Welcome back to the 1st Law Newsletter - Friday Edition.

In this email:

• Knowledge creation

• Free markets

• Protecting our money while squandering our time

Two Kinds of Knowledge

We need to understand knowledge itself to understand anything. There are only two known systems in the universe that can create knowledge: evolution and humans, and there is a distinct and imperative difference between the two kinds of knowledge creation.

Firstly, evolution is limited by having no foresight. It is a slow process, guided by trial and error and governed ruthlessly by natural selection. Evolution cannot see problems and conjecture solutions, and it cannot produce results unless they can be reached by incremental steps. Importantly, each step in the evolutionary chain must be useful, or else it will be eliminated by natural selection.

Humans and creative thought are the ultimate and most powerful form of knowledge creation. We can create from a combination of individually non-viable ideas, concepts or objects, and produce something useful. Incremental steps are unnecessary, for humans can imagine things that do not already exist, and things that do not even resemble anything that already exists. For example, no species other than humans has ever made a campfire. Evolution could not produce this for a campfire cannot be reached incrementally. There is no such thing as a partial campfire, therefore this requires a leap in knowledge and technical capability. As mentioned previously, it is impossible for evolution to leap from 0-1.

This implicates that humans, by way of creative thought, can solve any problem that improves itself through evolution, e.g.; viruses. No matter the speed at which they evolve, we can, in theory, foresee and take shortcuts to the finish line.

Ideas from a conversation between David Deutsch and Naval Ravikant.

Free Markets and Globalization

A market refers to a structure that allows buyers and sellers to exchange any type of goods, services and information.

Examples include:

• Physical consumer markets (food retail, real estate, used goods).

• Physical business markets (labour market, online auction, energy market).

• Non-physical markets (internet market, media, carbon trading).

• Financial markets (currency, stocks, bonds, futures, insurance, debt).

• Unauthorized/ Illegal markets (grey markets, illegal goods like guns, drugs, unpasteurized whole milk).

The key traits for a good market include; having many buyers and sellers, an equal access to information, and comparable products and options to choose from. A free market refers to when the price of goods is set solely by supply and demand, and that the market can operate without the intervention of government or any other external authority. There should also be a low barrier of entry that freely allows new market entrants. All of these conditions ensure fair competition. Free markets allow better allocation of societal resources than any controlled design could achieve.

With the increasing digitalization of our world, markets are becoming increasingly global. Competition is now not only within a community, city or country, but worldwide. No matter the product, service or information you have to offer, you need to be competitive in the free market on a global scale.

Quote I Want To Share

You are not forced to earn money, and you are not forced to spend it. You have no choice in spending time. Each day 24 hours will be spent. It is just a matter of deciding what you will spend them on.

Thanks for reading!

Lucas