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Consumption, production and technological progress: a unified entropic approach
Abstract
This paper proposes a framework in which the entropy of a system undergoing a transformation could be used to characterize the economics of the transformation itself. Specifically, two elemental economic processes — consumption and production — are each shown to have unique thermodynamic properties. Consumption is always accompanied by an increase in the entropy of the entire system, production by a decrease of the entropy of some parts of the system. Hence, an entropy measure could be designed to quantify in a unique physical sense the degree of economic production, consumption, and various sorts of efficiency. The study also suggests how this approach can provide insights into problems of economic growth and technological progress.
... Another problem with the basic model used in neoclassical economics (Figure la) is that it does not include boundaries that in any way indicate the physical requirements or effects of economic activities. We believe that at a minimum Figure la should be reconstructed as Figure lb, to include the necessary resources, the generation of wastes, and the necessity for the economic process to occur within the larger system, the biosphere (Dalyb1977, Cleveland et al. 1984, Dung 1992, Ayres 1996, Dasgupta et al. 2000. Taking this assessment one step further, we believe that something like Figure 2 is the diagram that should be used to represent the actual physical aspects of an economy's working. ...
... Natural scientists expect theoretical models to be tested before they are applied or developed further. Unfortunately, economic policy with farreaching consequences is often based on economic models that, although elegant and widely accepted, are not validated (Daly 1977, Cleveland et al. 1984, Dung 1992, Ayres 1996. Empirical tests to validate economic models are undertaken even less frequently in the developing countries, where these models are followed regularly (e.g., Kroeger and Montagne 2000). ...
... Another problem with the basic model used in neoclassical economics (Figure la) is that it does not include boundaries that in any way indicate the physical requirements or effects of economic activities. We believe that at a minimum Figure la should be reconstructed as Figure lb, to include the necessary resources, the generation of wastes, and the necessity for the economic process to occur within the larger system, the biosphere (Dalyb1977, Cleveland et al. 1984, Dung 1992, Ayres 1996, Dasgupta et al. 2000. Taking this assessment one step further, we believe that something like Figure 2 is the diagram that should be used to represent the actual physical aspects of an economy's working. ...
... Natural scientists expect theoretical models to be tested before they are applied or developed further. Unfortunately, economic policy with farreaching consequences is often based on economic models that, although elegant and widely accepted, are not validated (Daly 1977, Cleveland et al. 1984, Dung 1992, Ayres 1996. Empirical tests to validate economic models are undertaken even less frequently in the developing countries, where these models are followed regularly (e.g., Kroeger and Montagne 2000). ...
For the past 150 years, economics has been treated as a social science in which economies are modeled as a circular flow of income between producers and consumers. In this "perpetual motion" of interactions between firms that produce and households that consume, little or no accounting is given of the flow of energy and materials from the environment and back again. In the standard economic model, energy and matter are completely recycled in these transactions, and economic activity is seemingly exempt from the Second Law of Thermodynamics. As we enter the second half of the age of oil, and as energy supplies and the environmental impacts of energy production and consumption become major issues on the world stage, this exemption appears illusory at best. In Energy and the Wealth of Nations, concepts such as energy return on investment (EROI) provide powerful insights into the real balance sheets that drive our "petroleum economy." Hall and Klitgaard explore the relation between energy and the wealth explosion of the 20th century, the failure of markets to recognize or efficiently allocate diminishing resources, the economic consequences of peak oil, the EROI for finding and exploiting new oil fields, and whether alternative energy technologies such as wind and solar power meet the minimum EROI requirements needed to run our society as we know it. This book is an essential read for all scientists and economists who have recognized the urgent need for a more scientific, unified approach to economics in an energy-constrained world, and serves as an ideal teaching text for the growing number of courses, such as the authors' own, on the role of energy in society. © Springer Science+Business Media, LLC 2012. All rights reserved.
... O consumo pode então ser associado com atividade ou uso não puro e é a diferença entre o nível de entropia que resulta depois da intervenção humana e o que resultaria do caminho evolucionário natural. Se não há diferença, então nós temos uso puro e não consumo; mas se há alguma diferença, então nós temos consumo, e a magnitude da diferença pode ser pensada como o grau de consumo (Dung, 1992). ...
... According to Rosen [111] the concept of exergy may be used at all levels from engineering to policy making. Although the use of entropy formation has been proposed [112] it is argued that exergy consumption reflects real costs to society and should be related to the pricing system [113] which is another possible way of regulation [114]. This could be applied through an exergy-based taxation system [115,116]. ...
Ecosystem theory has been developed during recent decades, thereby a series of concepts are hypothesized to describe principles inherent to the “natural” function of biological systems at various levels of hierarchy. It seems that a universal trend exists, through evolutionary time and space that allows us to establish indicators that may be used to observe patterns in evolution, even at high levels of hierarchy such as the ecosystem level. The functional principles of ecosystems have evolved over a period of time corresponding to the existence of life on earth say 3–4 billion years. The obvious question immediately arises whether we could learn something from observing these principles. Could we possibly improve our existence by living in accordance with these principles practiced in nature, as exemplified by ecosystems? In this paper, a comparison between natural systems on the one side and industrial–societal systems on the other side is made using 10 target areas as entrance points. It turns out that even though industrial ecologists are aware of and are practicing some points in ecosystem theory, far from all principles, have been exploited. It is suggested that society should increase attention to some of the features where natural systems and societal systems differ greatly. It is hypothesized that industry and society, both in terms of economy and sustainability, would benefit from exploiting these natural principles, even more. This would lead to an intended and deliberate development of the industrial sectors and society in general accordance with the natural ecosystem principles. This led the author to propose the eco-mimetic development of our society.
Fisheries management and fisheries science have been concerned traditionally with the management of populations of game and commercial species, principally through manipulations of populations, habitat, and, through regulation, harvests. The objective has been, and remains, the maintenance of populations of particular species at levels thought desirable to society. This approach has been in some respects very successful (e.g., for many highly prized game fish such as freshwater trout, largemouth bass, and striped bass). However, although one can find some examples where a region's fisheries have managed to thrive under formal management, these successful fisheries are the exceptions. In particular, many fisheries that at one time or another within the last fifty years produced the major proportions of the global fish catch have passed into commercial or virtual biological oblivion. For example, the National Marine Fisheries Service (NMFS) Report on the Status of United States Fisheries found in 1997 that 86 species are listed as "overfished," 183 species are listed as "not overfished," and 10 species are considered to be approaching an overfished condition based on the criteria specified in the Magnuson- Stevens Act. The status relative to overfishing is unknown for 448 additional species. (NMFS 1997). The most recent statistical analyses of "Status of Fisheries of the United States," compiled up to the year 2000, found that 14 of the 18 most important commercial species for the United States are considered commercially extinct, or in danger of that (NMFS 2001). Although there is no question that global fisheries are in serious trouble, the degree to which specific fisheries are in decline or danger is a complex and even controversial issue. Myers and Worm (2003) of Dalhousie University in Nova Scotia write, "Industrialized fisheries typically reduced community biomass by 80% within 15 years of exploitation" and, referring to such fishes as cod, halibut, tuna, swordfish, and marlin, "large predatory fish biomass is today only about 10% of preindustrial levels," that is, since the beginning of large-scale high seas fishing in the 1950s. They find that fishing is now so "efficient" that the population of any species can be caught within fifteen years, some populations disappearing within just a few years. Similar discouraging trends can be found in Pikitch et al. (1997) and Pauley et al. (2002). Fortunately, when these findings have been readdressed by researchers and managers more directly involved, they concluded that the results were not as dire as Meyers and Worm (and others) suggest. Over a year after the fact, and after several efforts to get their comments published, Nature finally published "Comments on Myers & Worm," by John Hampton of the Oceanic Fisheries Programme at the Secretariat of the Pacific Community; John R. Sibert of the Pelagic Research Program, University of Hawaii; Pierre Kleiber, of the U.S. Marine Fisheries Service, Pacific Islands Fisheries Science Center; and Shelton J. Harley of the Inter-American Tropical Tuna Commission. These experts, who specialize in tuna fisheries, take apart almost every methodological aspect of the Myers and Worm article. "Fundamentally flawed," "incorrect," "too restrictive" are some of the epithets they use. They conclude that "Myers and Worm do the fisheries community a disservice by applying a simplistic analysis to available data, which exaggerates declines in abundance and implies rebuilding benchmarks." It would probably have paid for Meyers and Worm to have read both of the available Academic Press volumes on tunas by Sharp and Dizon (1978) and Block and Stevens (2001), as well as basic early 1970s Japanese research by S. Saito, S. Sasaki, Hanamoto, and others (referenced in both volumes) that changed the world of longline fishing after they employed vertical longline techniques to find out where, which, and what sizes of tunas were most abundant and thus most vulnerable to longline gear. The conclusion of all this pointed discussion within the scientific community is that although yes, in agreement with Myers and Worm, there is extreme concern about the commercial disappearance, or the potential disappearance, of many of our traditional fish stocks in light of our tremendous potential for industrialized overfishing, good science must be brought to know, monitor, and model fish populations and the functioning of fisheries. In addition, there has been a great deal of additional concern about the destruction of the ecosystems within which these fish live, including destruction by fishing itself, for example by the effects of large bottom trawler nets. Aquaculture, which was once believed to be the sustainable solution to feed a growing world's population, can also have disastrous impact on ocean ecosystems (Naylor et al. 2003). Fortunately, there has been an epidemic of introspection among fisheries scientists since the general recognition during the 1990s that fisheries management actions have been ineffective, if not actually destructive (Garcia and Grainger 1997; Sharp 1992, 1995, 1996, 1997; Hancock et al. 1997). A concise summary of these papers, the contents of the meetings at which they were given, and the literature they summarize is this: conventional fisheries science as implemented in resource management has failed abysmally. Why? Again, the consensus is that relatively few fisheries scientists appear willing or able to implement their commonsensical and often comprehensive knowledge of particular fisheries. Instead they are trained, and in some cases even mandated by their superiors, to apply conventionalized but poorly performing population assessment tools that they learned in graduate school and that have dominated fisheries education and management, rather than on the comprehensive systems approach that is needed. Therefore, little of what is known about any fish species or their related ecosystem or the fisherman's social system, or about the impact of continuing industrialization of the fishing fleet, is actually applied within the management realm until a crisis occurs. In addition, these scientists often defer to economic models that they may not understand well. The reasons for these failures include the lack of systems training for fisheries managers and the overwhelming power of the political and economic power aligned against the application of the fisheries manager's biological conclusions (Ludwig, Hilborn, and Walters 1993). Within this regime there has been little attention paid to the degree to which the economic framework within which fisheries science and management must operate is adequate or even appropriate for that task. This chapter brings together a biologist with a comprehensive understanding of the world's major fisheries (Sharp) with an ecologist who over the last three decades has attempted to understand economics (Hall) in an attempt to determine to what degree the failures (and the successes) of fisheries are a function of the increasing intrusion of market economics into fisheries. In a sense, this is a nearimpossible job because there are so many ways that fisheries can fail, so that teasing out the effects of markets can be very difficult. On the other hand, it may be useful to determine from those cases that appear to be clear-cut what if any principles might apply. We do not know the degree to which the specific case studies we provide here are broadly applicable, but we think they are. We acknowledge that our conclusions are based on some of the world's large industrial fisheries and not the artisanal fisheries that dominate some regions like West Africa and may be, on balance, more likely to be sustainable (Berkes et al. 2001). © 2007 by the University of New Mexico Press. All rights reserved.
Holistic in approach and rooted in the real world Ecological Economics and Industrial Ecology presents a new way of looking at environmental policy; exploring the relationship between ecological economics and industrial ecology. Concentrating on the conceptual background of ecological economics and industrial ecology, this book: provides a selection of recommendations for a product-oriented environmental policy, based on the author's case study of the IPP contributes to the development of a consistent body of knowledge regarding sustainable development. A topical and critical review, this book should be read by academics and policy makers alike, specifically those engaged with the concepts surrounding sustainable development and the rationale for more restrictive environmental policies.
The expansion of the human population and the economies of the United States and many other nations in the past 100 years have been facilitated by a commensurate expansion in the use of fossil fuels. To many energy analysts that expansion of cheap fuel energy has been far more important than business acumen, economic policy, or ideology, although they too may be important [1–15]. Although we are used to thinking about the economy in monetary terms, those of us trained in the natural sciences consider it equally valid to think about the economy and economics from the perspective of the energy required to make it run. When one spends a dollar, we do not think just about the dollar bill leaving our wallet and passing to someone else’s. Rather, we think that to enable that transaction, to generate the good or service being purchased, an average of about 8,000 kiloJoules of energy (roughly the amount of oil that would fill a standard coffee cup) must be extracted and turned into roughly a half kilogram of carbon dioxide. Take the money out of the economy and it could continue to function through barter, albeit in an extremely awkward, limited, and inefficient way. Take the energy out and the economy would immediately contract. Cuba found this out in 1991 when the Soviet Union, facing its own oil production and political problems, cut off Cuba’s subsidized oil supply. Both Cuba’s energy use and its GDP declined immediately by about one third, groceries disappeared from market shelves within a week, and soon the average Cuban lost 20 lb [16]. Cuba subsequently learned to live, in some ways well, on about half the oil as previously, but the impacts were significant and the transition was difficult. Yet Cuba moved away from monocrop agriculture to food production. There are more rooftop gardens per capita in Havana than in any other city. The United States has become more efficient in using energy in recent decades, however, most of this is due to using higher-quality fuels, exporting heavy industry, and switching what we call economic activity (e.g., [15]), and many other countries, including efficiency leader Japan, are becoming substantially less efficient [17–20].
The most important problems facing wildlife conservation are the growing human population and its affluence, and the concomitant requirement for resources to accommodate this growth. A pressing question is how to maintain wildlife numbers and diversity when prime wildlife habitat is needed for agriculture, resource extraction, or urban expansion. Solutions to this problem may not be forthcoming because mainstream (generally meaning neoclassical) economic logic and policies are often in direct conflict with the goals of wildlife science. There is a great need for wildlife scientists to broaden their view and sophistication of economics and also to expand the wildlife field to encompass the larger social forces that are changing the well-being of wildlife species. In what follows we elaborate on 1) what we perceive to be the underlying problem of wildlife conservation; 2) why our current system of economic valuation will, in the long term, undercut the goal of wildlife conservation; and 3) how to incorporate these concepts into wildlife curricula and the wildlife profession.
The question is extremely important, because economics is the foundation upon which most decisions affecting agriculture, fisheries, and the environment and, indeed, most aspects of our daily lives are based. Natural scientists, including biological scientists, may have particular views on this or that economic policy, but few question the legitimacy of economics as a tool. We believe, paraphrasing the great Prussian military historian Karl von Clausewitz, that economics is too important to leave to the economists and that natural scientists should not leave the procedure by which we do economics up to the economists alone. Instead, natural scientists must contribute to a new discourse about the means, methods, and ends of economics. This chapter is a response to Leontief's question. It is essential that economics be based on sound principles, and that the policies that are generated have a solid foundation. Neoclassical economics, that form of economics derived in the mid-nineteenth century and the one that prevails today, focuses on problems related to value decisions, the behavior of economic actors, and the working of markets. These problems belong to the sphere of the social sciences (many of whom, incidentally, have their own problems with neoclassical economic theory; see, for example, Marris 1992). But the wealth that is distributed in the markets must be produced in the hard sphere of the material world, where all operations must obey the laws and principles of physics, chemistry, and biology. Our concern is that many production models of economics are not based upon these laws and principles; in fact, they tend to ignore them (Georgescu-Roegen 1971; Daly 1973, 1977; Kümmel et al. 1985; Leontief 1982; Cleveland et al. 1984; Hall, Cleveland, and Kaufmann 1986; Hall 1992, 2000). This disregard of the biophysical aspects of production by economists was not the rule historically. Quesnay and other members of the eighteenthcentury French physiocrat school focused on the use of solar radiation by biotic organisms and the role of land in generating wealth by capturing this energy through agricultural production. The classical economics of Adam Smith, David Ricardo, and Karl Marx was interested in both the physical origin and the distribution of wealth (Smith 1937; Ricardo 1891; Marx 1906). Podolinsky, Geddes, Soddy, and Hogben were biological and physical scientists of the nineteenth and early twentieth centuries who thought deeply about economic issues (Martinez-Alier 1987; Christensen 1989; Cleveland and Ruth 1997). Thus we find the degree to which neoclassical economics has displaced classical economics curious and almost a historical accident. The primary reason for the displacement of classical economics by the neoclassical school was the superior mathematical rigor of neoclassical economics and the development of the marginal utility theory, which solved the "water versus diamonds" paradox that classical economics could not. But the underlying biophysical perspective of Smith and Ricardo was not brought along with the new mathematical elegance of the "marginal revolution." Consequently, major decisions that affect millions of people and most of the world's ecosystems are based on neoclassical economic models that, although internally consistent and mathematically sophisticated, ignore or are not sufficiently consistent with the basic laws of nature. This leads to the failure of those economic policies that run against these laws and endanger sustainable development. In this chapter we examine this issue in more detail, making a case for including the laws of nature in economic theory and analysis and in the policies derived from this theory as carefully and explicitly as the assumptions on human preferences and choices. Both natural scientists and even some economists have been leveling severe criticisms at the basis of neoclassical economics for many years (Soddy 1926; Boulding 1966; Georgescu-Roegen 1966, 1971; Daly 1973; Binswanger and Ledergerber 1974; Cleveland et al. 1984; Hall, Cleveland, and Kaufmann 1986; Ayres 1996, 1999). These criticisms, however, are largely ignored by neoclassical economists, and the rest of the scientific community seems to be largely unaware of them. We believe that it is time to exhume these criticisms and add to them more recent analytic work that gives them even greater validity. Past criticisms of neoclassical economics from the perspective of natural scientists can be summarized under three fundamental arguments: 1. The structure of the basic neoclassical model is unrealistic because it is not based on the biophysical world and the laws governing it, especially thermodynamics. 2. The boundaries of analysis are inappropriate because they do not include the real processes of the biosphere that provide the material and energy inputs, the waste sinks, and the necessary milieu for the economic process. 3. The basic assumptions underlying the models used have not been put forth as testable hypotheses but rather as givens. We substantiate these three criticisms in the pages that follow, then present a new model of industrial production that we believe further supports our criticisms and our assessment of the importance of energy. In this new model, the output of the economic system and the maintenance of its components depend on continuous input of energy into the system, as is true for all organisms and ecosystems. © 2007 by the University of New Mexico Press. All rights reserved.
The issues surrounding energy are far more important, complex and pervasive than normally considered from the perspective
of conventional economics, and they will be extremely resistant to market-based, or possibly any other, resolution. We live
in an era completely dominated by readily available and cheap petroleum. This cheap petroleum is finite and currently there
are no substitutes with the quality and quantity required. Of particular importance to society’s past and future is that depletion
is overtaking technology in many ways, so that the enormous wealth made possible by cheap petroleum is very unlikely to continue
very far into the future. What this means principally is that investments will increasingly have to be made into simply getting
the energy that today we take for granted, the net economic effect being the gradual squeezing out of discretionary investments
and consumption. While there are certainly partial “supply-side” solutions to these issues, principally through a focus on
certain types of solar power, the magnitude of the problem will be enormous because of the scale required, the declining net
energy supplies available for investment and the relatively low net energy yields of the alternatives. Given that this issue
is likely to be far more immediate, and perhaps more important, than even the serious issue of global warming it is remarkable
how little attention we have paid to understanding it or its consequences.
The paper distinguishes among five different roles which the biological metaphor has played, or could play, in economic theory. First, the “selfish-gene” metaphor shows that non-human agents allocate scarce resources and behave non-selfishly according to rationality optimization—not different from how neoclassical theory models human choice. Second, the “ecological influx” metaphor examines the prowess of the non-human/human agent to produce surplus (net product), which differs from rationality optimization. Third, the “genotype” metaphor casts light on how the technology/institution scheme informs the development and behavior of organization. Fourth, the “organism” metaphor illuminates the order of organizations such as firms and states. Fifth, the “ecosystem” metaphor explicates the order of markets, which differs from the order of organizations.
It appears that living communities serve to augment the rate of entropy
production over what it would be in the absence of biota. This
hypothesis might be tested by comparing the spectra of electromagnetic
fluxes incident to and emanating from the surface of the Earth. An added
measure of the value of stored energy to ecosystems is derived by using
the economic theory of discounting.
Scitation is the online home of leading journals and conference proceedings from AIP Publishing and AIP Member Societies
The status of the Gibbs and Boltzmann expressions for entropy has been a matter of some confusion in the literature. We show that: (1) the Gibbs H function yields the correct entropy as defined in phenomenological thermodynamics; (2) the Boltzmann H yields an ``entropy'' that is in error by a nonnegligible amount whenever interparticle forces affect thermodynamic properties; (3) Boltzmann's other interpretation of entropy, S = k log W, is consistent with the Gibbs H, and derivable from it; (4) the Boltzmann H theorem does not constitute a demonstration of the second law for dilute gases; (5) the dynamical invariance of the Gibbs H gives a simple proof of the second law for arbitrary interparticle forces; (6) the second law is a special case of a general requirement for any macroscopic process to be experimentally reproducible. Finally, the ``anthropomorphic'' nature of entropy, on both the statistical and phenomenological levels, is stressed.
This book examines the state of the art of nonequilibrium statistical
thermodynamics from a single viewpoint. The book is intended for
physicists and physical chemists working in the fields of theoretical
physics, molecular physics, physical chemistry, and chemical physics.
A statistical thermodynamics is developed in terms of extensive variables (additive invariants) distributed over a cellular division in space. In general, this distribution is governed by randomness and by correlations. The present theory, however, deals explicitly only with randomness, although correlations are implicit in the so-called fixed variables of the system. Because of this restriction, the theory is valid only for the fluctuations of coupled systems that have reached their equilibrium; hence we call it the statistical thermodynamics of equilibrium, briefly STE. A set of postulates is advanced, the essence of which is the requirement that distribution functions (d.f.) exist for two basic coupling situations. It is implicit that the system has a memory-loss mechanism; and the d.f. does not depend on past history (ergodic property). Such qualitative assumptions are sufficient to derive the Gibbsian d.f.'s in their quantitative form. These d.f.'s describe the coupling of finite systems with infinite environments and can be used to analyze typical situations of measurement by the methods of mathematical statistics. The present point of view sheds some new light on the ergodic problem and on the role of Nernst's law in completing the definition of thermodynamic equilibrium. An attempt is made to clarify the relations between entropy, information, and uncertainty by advancing a generic notion, the dispersal of a d.f., that subsumes these concepts as special cases.
Grundrisse. Vintage Books Energy, value, and money
- K Marx
- H T Odum
Marx, K., 1973. Grundrisse. Vintage Books, New York. Odum, H.T., 1977. Energy, value, and money. In: C.A.S. Hall and J.W. Day, Jr. (Eds), Ecosystem Modeling in Theory and Practice. Wiley, New York.
Vorselungen iiber Naturphilosophie. N.P., Leipzig. Prigogine, I., 1980. From Being to Becoming
- W Ostwald
Ostwald, W., 1902. Vorselungen iiber Naturphilosophie. N.P., Leipzig. Prigogine, I., 1980. From Being to Becoming. Freeman, San Francisco.
Life and the production of entropy
- Ulanowicz