**Definition** **Intelligence Theory** is a new scientific framework that treats the economy not as a social system, but as a physical system. ==It defines economic value as **"low entropy"**== (order) created by intelligent agents fighting against the universe's natural tendency toward chaos. **Explanation** The theory argues that the universe constantly tries to tear things apart (entropy). To survive, systems—whether they are biological brains, companies, or economies—must act as **"sorting agents."** - **The Sorter's Job:** They take chaotic resources and "sort" them into useful, ordered patterns (like turning silicon into a microchip). - **The Cost:** This sorting requires energy and information. - **The Goal:** Success isn't just making money; it is minimizing the **"computational cost"** of creating this order. This means a successful system tries to be as accurate as possible about the future while using the least amount of energy to think and learn. **How It Differs from Existing Theories** The book contrasts Intelligence Theory with traditional economics in three main ways: 1. **Origin of Value:** - **Existing Theories:** Assume value already exists (scarcity) and focus on how to divide it ("allocation"). - **Intelligence Theory:** Explains how value is created in the first place (physics). It views value as a "temporary victory against chaos." 2. **Human Behavior:** - **Existing Theories:** Assume humans are "rational actors" trying to maximize "utility" (happiness/satisfaction). - **Intelligence Theory:** Views humans (and AIs) as **"metabolic engines"** or **"computational agents"** trying to minimize the energy cost of survival and prediction. 3. **The Role of Physics:** - **Existing Theories:** Often ignore physical laws, assuming "perpetual growth" is possible without energy constraints. - **Intelligence Theory:** Is grounded in thermodynamics. It recognizes that "every act of economic value... has an irreducible thermodynamic cost." [[Intelligent Economics]]