John Kenneth Galbraith, an economist at the University of Texas, has a new book called Entropy Economics: The Living Basis of Value and Production. The ideas are not really new, as he admits:
As we and others have said before, from a physics perspective, resources are low-entropy materials (Georgescu-Roegen 1971). The entropy law holds that systems tend towards higher entropy states spontaneously. Living systems, as non-equilibrium systems, need to extract low-entropy materials from the environment to compensate for their continuous dissipation.
We are taking concentrated resources from the Earth’s biophysical system, using them to perform useful work, and producing waste products which consist of less concentrated substances and heat which are too diffuse to use for useful work, and in many cases cause harm to the system. Entropy must increase at the scale of the universe, but organized systems like life and human civilization can get away with decreasing it on scales that matter to us short-lived primates, if not to a dark, cold universe that most likely doesn’t care about us (revealing my atheist stripes here, sure if you are religious that helps to solve this existential dread problem, and good for you!) There is a scale where the impact of our human economy becomes large relative to the physical system it is embedded in, and the economic theories we have based critical decisions on have chosen to neglect that to this point. Economists might say, our equations can account for that, we have just chosen to neglect it and we have clearly stated our assumptions. Well, those assumptions no longer hold as we approach or pass the point of no return.
Many others have made these points. In addition to Georgescu-Roegen – a few that come to my mind are Herman Daly, Howard Odum, Brian Czech, Jay Forrester and the authors of World3, to name a few. But these voices have been ignored by mainstream economists because they were from other disciplines, did not have the right credentials, or did not make their arguments at a time when the prevailing body of thought was receptive. So it probably helps to have one more credentialed academic economist make them for the audience of academic and professional economists at this particular point in history. Today’s students will be tomorrow’s professionals. Economists are very, very important. For better or worse, their opinions and choices and advice to policy makers shape our world. Maybe at a time when the public has become less receptive to these ideas even though the crisis has rapidly worsened, the economics profession could be ready to listen. I don’t know, but it’s worth another try.
