Dr. Doug Cardell

An Eclectic Economist Explains Evidentiary Economics

Clear Thinking in a Complicated World

“Ideology asks for acceptance—Intelligence asks for evidence.”
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   April 21, 2025

Scientists and philosophers have recently proposed a new law of nature that explains how all systems in the universe evolve, from atoms and minerals to planets, stars, and living organisms. This groundbreaking concept, called the "Law of Increasing Functional Information," goes far beyond previous explanations of how change occurs in systems. The law challenges traditional notions of purpose and directionality in nature, suggesting that increasing complexity and functionality are inherent properties of evolving systems. The Law of Increasing Functional Information states that "the functional information of a system will increase (i.e., the system will evolve) if many different configurations of the system undergo selection for one or more functions." This law universally applies to systems composed of many different components, including atoms, molecules, cells, plants, animals, people, states, solar systems, and galaxies, that arrange and rearrange themselves repeatedly in response to changing conditions—these changing conditions cause the systems to form a vast array of different arrangements. However, only a few arrangements will survive the "selection for function" process. Those that can stabilize and create an improved arrangement will survive and grow, while those that are unstable or require outside forces to maintain them will face elimination. The contrast between naturally occurring stable and unstable configurations is the basis for all evolutionary processes. Stable configurations lead to autocatalytic growth, in which these successful configurations lead to the formation of new similar configurations. It is a positive feedback loop in which the successful become more successful. As systems evolve, they are subject to asymmetric transitions, in which most transitions are unstable to stable rather than the reverse. This asymmetry pushes progress in evolutionary systems; they get better, not worse. The generation of new configurations occurs through blind variation; it is not a planned direction toward a predetermined goal but a process of undirected trial and error. Furthermore, the entire process is recursive. Simpler systems survive and combine to build larger, more complex systems. Because of this recursion, the structures have become more sophisticated and gained additional functionality. This law applies to virtually all systems: biological, planetary, mechanical, chemical, stellar, and cosmic systems. It also applies to economic systems, which is why we are discussing it. If you have read my previous articles, 'American Capitalism', 'July 4th Worldwide', or 'Worldwide Wealth'. In that case, you already know that the birth of free-market capitalism led to the most extraordinary surge of human progress ever experienced, and it continues to improve. The Law of Increasing Functional Information explains why this happened. If you've read my previous articles, 'Spontaneous Order' and 'Are You an Economy', you already have an idea of how this works. The Law of Increasing Functional Information expands the concept of spontaneous order and applies it to a broader range of systems. It also reinforces that this process is natural and an inherent part of the universe. Until the evolution of free-market capitalism, economic systems were inherently unstable. They changed over time, but nothing stuck. Human economic progress requires two things to encourage growth: capital to invest and entrepreneurs to use that capital to create new tools and products to improve people's lives. Until the birth of the United States, powerful governments stifled growth by trying to control the exploratory nature of this system. The US changed all that and freed capitalists to support entrepreneurs and spark innovation. As predicted by The Law of Increasing Functional Information, this free-market, capitalistic economy produced a stable system that could evolve and grow. The United States, and by extension, the world, is in danger. Increasing government regulation and control threaten to stop human progress and force us back to a milieu similar to before the American Revolution, in which evolution and progress grind to a halt. Progress depends on the freedom to experiment, try new things, and allow trial and error to help society find the most successful path forward. Yes, it can be messy, but messy or not, it's what The Law of Increasing Functional Information tells us will ultimately be successful. Free-market capitalism, fostered by American freedom, led the world out of the dark ages; let's not let increasing government control drive us back.

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