Knowledge is not mere information—it is information that enables effective action. Information theory formalizes information as the reduction of uncertainty, but explicitly notes that semantic aspects are irrelevant to the engineering problem. Cybernetics sought something deeper: negative entropy, order that maintains organization. The distinction matters: all knowledge is information, but not all information is knowledge. A random bitstream has high Shannon information yet teaches nothing; a signal that updates your model of reality and improves your decisions—that is knowledge. The information value theory formalizes this: information has worth only insofar as it changes what you would do. Agents under incomplete state information reduce uncertainty through observation—a framework later developed into partially observable Markov decision processes. Life, organizations, and civilizations are fundamentally sequential decision-making systems; they survive by accumulating knowledge that improves their capacity to act under uncertainty.
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Factor 1: Knowledge is Negative Entropy