Chinese Communists More Market-Friendly Than U.S.: George Gilder

Israel, he said, was nearing 1,000% inflation in the 1980s. “Socialism had reached the end of the line,” he said. A reformist government reduced government ownership of corporations from 80% to 20% and undertook other liberalizations that set the stage for its leading-edge high-tech economy today.

New Zealand, he said, went from “one of the world’s richest nations to just ahead of Tunisia.” Then a reformist Labor government “zeroed out” government programs and the island nation, which had been importing food, became a leading food exporter, its dairy farms, for example, becoming a competitive threat to Wisconsin dairy farms. “These policies can be changed on a dime,” Gilder said. “Look at how the energy industry broke away from the general sclerosis against every policy Washington was promulgating… It is only the unexpected eruption of creativity that has saved our economy,” referring to the technological innovation that has enabled the exploitation of shale energy reserves in places like North Dakota.

Gilder, who since Wealth and Poverty has long been credited as a techno-prophet envisioning developments in information technology through his subsequent books and Gilder Technology Report newsletter, is also the chairman of George Gilder Fund Management.

So I naturally asked him his advice for investors.

His general advice was that the ideological shifts cannot be predicted and that investors would do well to always increase their knowledge, which “equals” wealth.

“In a bad economy, keep on learning,” he said.

But, more specifically, he expressed enthusiasm for the way that information theory is “transforming” areas like pharmacology, energy, mobility and bitcoin micropayment technology.

Gilder said the biggest advances he sees are in “programmable biotechnology” that develops vaccines which can communicate with immune systems to kill specific types of cancer cells.

The techno-futurist says science today can adapt drugs to the “particular genetic signatures of particular people,” a hugely positive trend that runs counter to current FDA thinking that therapies must somehow apply to everyone to be considered safe.

Gilder recommends Peter Huber’s book The Cure in the Code for investors seeking to learn more about how medicine is becoming an information industry capable of customizing drugs suited to individual patients.

Most of the companies pioneering these new technologies are private — for example Seattle-based Immusoft Corp.

But pressed for the names of publicly traded stocks, Gilder approvingly cited Israel’s Compugen (CGEN) and New Jersey-based Celgene (CELG).