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The Entropy Law and the Economic Process
"Every few generations a great seminal book comes along that challenges economic analysis and through its findings alters men's thinking and the course of societal change. This is such a book, yet it is more. It is a "poetic" philosophy, mathematics, and science of economics. It is the quintessence of the thought that has been focused on the economic reality. Henceforce all economists must take these conclusions into account lest their analyses and scholarship be found wanting. "The entropy of the physical universe increases constantly because there is a continuous and irrevocable qualitative degradation of order into chaos. The entropic nature of the economic process, which degrades natural resources and pollutes the environment, constitutes the present danger. The earth is entropically winding down naturally, and economic advance is accelerating the process. Man must learn to ration the meager resources he has so profligately squandered if he is to survive in the long run when the entropic degradation of the sun will be the crucial factor, "for suprising as it may seem, the entire stock of natural resources is not worth more than a few days of sunlight!" Georgescu-Rogen has written our generation's classic in the field of economics."— Library Journal
476 pages, Paperback
First published January 1, 1971
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About the author
Nicholas Georgescu-Roegen
16 books12 followersNicholas Georgescu-Roegen was a Romanian American mathematician, statistician and economist.
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Displaying 1 - 10 of 10 reviews
August 18, 2024
The entropy law is the basis of the economy of life at all levels.
This is a fantastically engaging study of the science and history of classical economics and its major shortcomings, which (still) include a general failure to account for entropy. The book is not simply a polemic, as Georgescu-Roegen dives into the foundational principles of economics in an often-humorous history of various schools and methodologies that have brought us to where we are (or were, in the mid-1960s. *spoiler alert: not much has changed).
A few choice quotes and paraphrases:
A Spencerian tragedy = When a theory is killed by a fact.
The Principle of Complementarity: No single theory suffices to explain an event.
Intuition alone advances knowledge creatively.
...the nature of thought being dialectical, thought cannot be reproduced by machines constructed on arithmomorphic blueprints.
Poincare: Social sciences have the most methods and the fewest results.
Life feeds on low entropy.
Economies must produce not only commodities but also processes.
The economic process is entropic: it neither creates nor consumes matter or energy, but only transforms low into high entropy.
The true output of the economic process is not a physical outflow of waste, but the enjoyment of life. The real source of economic value = the value that life has for every life-bearing individual.
Investment is the production of additional processes. Must use commodities already available to produce an additional process.
I don’t entirely agree with this, but it is interesting: Marx and Ricardo were both "marginalists": R goes to the margin of cultivation, where the whole product goes to Labor. M goes to the margin of economic history where capital does not yet exist and Labor is the only production agent. Marx ignores the fact that the next stone hammer was produced with help from the first - at a reproduction rate greater than 1 to 1.
The evolutionary pace of the economic "species" is too rapid to generalize as much as Pareto insists.
And, finally: The sin of standard economics is the fallacy of misplaced concreteness.
This is a fantastically engaging study of the science and history of classical economics and its major shortcomings, which (still) include a general failure to account for entropy. The book is not simply a polemic, as Georgescu-Roegen dives into the foundational principles of economics in an often-humorous history of various schools and methodologies that have brought us to where we are (or were, in the mid-1960s. *spoiler alert: not much has changed).
A few choice quotes and paraphrases:
A Spencerian tragedy = When a theory is killed by a fact.
The Principle of Complementarity: No single theory suffices to explain an event.
Intuition alone advances knowledge creatively.
...the nature of thought being dialectical, thought cannot be reproduced by machines constructed on arithmomorphic blueprints.
Poincare: Social sciences have the most methods and the fewest results.
Life feeds on low entropy.
Economies must produce not only commodities but also processes.
The economic process is entropic: it neither creates nor consumes matter or energy, but only transforms low into high entropy.
The true output of the economic process is not a physical outflow of waste, but the enjoyment of life. The real source of economic value = the value that life has for every life-bearing individual.
Investment is the production of additional processes. Must use commodities already available to produce an additional process.
I don’t entirely agree with this, but it is interesting: Marx and Ricardo were both "marginalists": R goes to the margin of cultivation, where the whole product goes to Labor. M goes to the margin of economic history where capital does not yet exist and Labor is the only production agent. Marx ignores the fact that the next stone hammer was produced with help from the first - at a reproduction rate greater than 1 to 1.
The evolutionary pace of the economic "species" is too rapid to generalize as much as Pareto insists.
And, finally: The sin of standard economics is the fallacy of misplaced concreteness.
September 20, 2016
Essential reading for social scientists, public policy makers, aspiring politicians, and just for about anyone with interest in how our socioeconomic systems depend on laws of nature. It is a refreshing alternative to neoclassical economics due to its empirical, non-axiomatic, and systematic dissection of what we call THE economic process... This book shall be one of the cornerstones of any political or economic curricula in the 21st century. (less) [edit]
August 3, 2011
The Entropy Law explains the entropy of the physical universe and how this applies to the nature of the economic process, as well as the way in which man is speeding up the entropic depletion of our natural resources. Georgescu-Roegen proposes that we learn to ration the resources we have to ensure the long-term survival of the human race. This is a fascinating and important read for those looking to better understand how capitalism relates to the laws of Thermodynamics.
June 18, 2015
Bueno, lo logré. Realmente este tipo sabía mucho de muchas cosas, con lo que no es tan sencillo seguirlo a lo largo de todo su razonamiento. Tiene partes más complicadas que otras igual. También hay que situarse en la mente de un soviético rumano: "¡No todos fuimos tan fuertemente instruidos en Leontief!", querido Nicholas.
Para los economistas buscan por título: El uso del término "Entropía" que hace Sims varió tanto con el paso del tiempo que es practicamente irreconocible en este libro de 1971.
Algunas cosas que sin lugar a dudas me van a quedar como recuerdo:
- La cuestión epistemológica. La discusión entre dialéctica y aritmomorfismo fue de lo que más me costó entender del libro. Pero la idea queda. Lo mismo que los problemas que tiene la interpretación mecanisista de la física... si, digo bien, ¡de la física! ¿Cuánto más entonces se dificulta la interpretación mecanisita de la economía y la sociedad?
- Vinculado con el punto anterior me parece que el proceso hacia una ciencia más interdiciplinaria es irrevocable (al igual que el proceso entrópico). En este sentido la lectura de este libro para los estudiantes de economía debería ir adquiriendo importancia. Si no este libro, al menos esta idea. Me parece un trabajo muy interdisciplinario: Física, Quimica (¿son cosas distintas?), Sociología, Filosofía, Teología, Economía. Eso me gusta, y me parece que colabora a una nueva forma de entender el razonamiento.
- La cuestión de la Entropía. Más no sea por el título del libro. De esto lo que más me queda es esto de que cada Cadillac producido es menos vidas futuras. Si aceleramos el proceso entrópico, su irrevocabilidad hace que la energía (libre) se vaya acabando. Si bien hay mucha que recibimos como flujo (el sol por ejemplo, y poco lo valoramos)el stock de energía del sistema cerrado "tierra" (la nave espacial) no es tan inagotable en el mediano plazo. Entiendo que esta idea es la que dio nacimiento a la bioeconomía en el sentido de Georgescu.
- Finalmente la idea de la humanidad como una sociedad en la que ausencia de componentes endosomáticos obliga a la creación de factores exosomáticos y una cultura que los sostenga. Traducido: Como los seres humanos somos biologicamente no discriminados en castas ni funciones sociales (como las hormigas o las abejas por ejemplo) y en cambio esa diferenciación si se da en el sentido exosomático (tecnología, capital) la cultura (ciencia) es la que media el proceso. Aquí "Paz" y "Pueblo" son las utopias frente a la distopía eugenética.
Al menos eso es lo que entendí... espero ayudar y no haber malinterpretado.
Finalizo con el mismo párrafo que el libro:
"Pero tal vez un día lleguemos a darnos cuenta de que el hombre es también un instrumento, el único para estudiar las propensiones del hombre. Ese día no habrá más hombres olvidados, olvidados porque en la actualidad se supone que no sabemos cómo estudiarlos y dar cuenta de lo que piensan, sienten y quieren. Un «ejército de paz, no sólo un «cuerpo de paz», es lo que necesitamos. Admito que esto puede ser un pensamiento utópico, con reminiscencias del eslogan de los Narodniki: «Para el pueblo».
Pero prefiero ser utópico sobre este punto a serlo respecto de la Nueva Jerusalen que el cientifismo acrítico de uno u otro tipo ofrece como promesa al hombre."
Para los economistas buscan por título: El uso del término "Entropía" que hace Sims varió tanto con el paso del tiempo que es practicamente irreconocible en este libro de 1971.
Algunas cosas que sin lugar a dudas me van a quedar como recuerdo:
- La cuestión epistemológica. La discusión entre dialéctica y aritmomorfismo fue de lo que más me costó entender del libro. Pero la idea queda. Lo mismo que los problemas que tiene la interpretación mecanisista de la física... si, digo bien, ¡de la física! ¿Cuánto más entonces se dificulta la interpretación mecanisita de la economía y la sociedad?
- Vinculado con el punto anterior me parece que el proceso hacia una ciencia más interdiciplinaria es irrevocable (al igual que el proceso entrópico). En este sentido la lectura de este libro para los estudiantes de economía debería ir adquiriendo importancia. Si no este libro, al menos esta idea. Me parece un trabajo muy interdisciplinario: Física, Quimica (¿son cosas distintas?), Sociología, Filosofía, Teología, Economía. Eso me gusta, y me parece que colabora a una nueva forma de entender el razonamiento.
- La cuestión de la Entropía. Más no sea por el título del libro. De esto lo que más me queda es esto de que cada Cadillac producido es menos vidas futuras. Si aceleramos el proceso entrópico, su irrevocabilidad hace que la energía (libre) se vaya acabando. Si bien hay mucha que recibimos como flujo (el sol por ejemplo, y poco lo valoramos)el stock de energía del sistema cerrado "tierra" (la nave espacial) no es tan inagotable en el mediano plazo. Entiendo que esta idea es la que dio nacimiento a la bioeconomía en el sentido de Georgescu.
- Finalmente la idea de la humanidad como una sociedad en la que ausencia de componentes endosomáticos obliga a la creación de factores exosomáticos y una cultura que los sostenga. Traducido: Como los seres humanos somos biologicamente no discriminados en castas ni funciones sociales (como las hormigas o las abejas por ejemplo) y en cambio esa diferenciación si se da en el sentido exosomático (tecnología, capital) la cultura (ciencia) es la que media el proceso. Aquí "Paz" y "Pueblo" son las utopias frente a la distopía eugenética.
Al menos eso es lo que entendí... espero ayudar y no haber malinterpretado.
Finalizo con el mismo párrafo que el libro:
"Pero tal vez un día lleguemos a darnos cuenta de que el hombre es también un instrumento, el único para estudiar las propensiones del hombre. Ese día no habrá más hombres olvidados, olvidados porque en la actualidad se supone que no sabemos cómo estudiarlos y dar cuenta de lo que piensan, sienten y quieren. Un «ejército de paz, no sólo un «cuerpo de paz», es lo que necesitamos. Admito que esto puede ser un pensamiento utópico, con reminiscencias del eslogan de los Narodniki: «Para el pueblo».
Pero prefiero ser utópico sobre este punto a serlo respecto de la Nueva Jerusalen que el cientifismo acrítico de uno u otro tipo ofrece como promesa al hombre."
November 19, 2020
This is either a work of genius or overrated random scribblings. Most likely, it is something in between. It's a tough book to read all the way through. The author hasn't made it clear that the book is worth getting through. But there are enough intriguing ideas here to make it worth trying.
The basic idea of the book is clear enough. Economics doesn't understand the entropy law, but entropy is decisive in any understanding of economics. It's even deeper than that; no discipline fully understands the entropy law, and if you think about it broadly, everything is economics. What I mean by "everything is economics" is this: physics involves economics because it is an organization of knowledge that is efficient in understanding a particular part of nature. Ditto with chemistry, sociology, history, and all the other disciplines. They have all landed on something that is important and worth passing down to future generations. Inevitably, these disciplines have to pick and choose what to pass on and what to pass over. You can't possibly pass everything on (see "entropy, law of"). This choice ("important? not important?") is essentially an economic choice. So this book is really also about philosophy of science, as well as about the foundations of economics and indeed the foundations of all knowledge.
Unfortunately, the book's comprehensibility goes downhill quickly. This downhill progress is already present in the Introduction, and keeps up a steady pace of difficulty wherever you turn. There are a lot of mathematical equations, which left me asking, is this equation really necessary? And how much do I really need to know about Lentief or Lotka? What exactly is his point, and does all the detail really contribute to this point? There were a few references to authors I'd actually read, like Plato and Marx. But much more frequent were references to authors I'd heard of, but hadn't read (e. g. Paul Samuelson, Max Planck), and countless authors that I'd never even heard of (e. g. Alfred J. Lotka, Wassily Leontief, Paul Levy, Nicholas Kaldor, A. I. Khimchin).
True confessions: I read about 2/3 of the book, and lot of it is over my head. I've benefitted from reading and understanding what I could. I'd probably leave it on my shelf a little longer, but it's due at the library, and the book is rather expensive to purchase ($65 from Amazon). So, the entropy law appears once again. Perhaps to get you to this level of understanding was the author's real philosophical purpose.
As a practical matter, there's no way that I can look up all the authors to whom Georgescu-Roegen refers, or take time out to master all the physics and math involved. If you have done this, perhaps you could explain it to the rest of us? If, that is, it's worth your effort. Once again, we see the operation of entropy in our everyday lives, even as I wade through this intriguing but difficult book.
What I actually suspect, but can't prove, is that the author hadn't fully worked out all the connections himself, and that this book represents something like a roughly organized "core dump" of the information he had collected to that point. He realized that neither the economists, nor anyone else, really wanted to understand what he was saying anyway. So he just published the book and let the chips fall where they may, hoping that someone would be able to pick up the pieces later. By the way, I have read a number of his other essays and found them quite readable and insightful. He's clearly a smart guy. However, that doesn't mean it's worth my time to take the additional time to get through this book. I'd think about it if I was about 50 years younger and a graduate student in philosophy.
Bottom line: you should take a look at this book if you're interested in ecological economics or the philosophy of science. The author presents several intriguing ideas and spreads the applications all over the length and breadth of human knowledge, from Plato to modern physics. However, it is not really the foundational book for ecological economics specifically, which is the expectation I brought when I sat down to read the book. Read Herman Daly and others like him for this. Unless you are a graduate student in philosophy with background in economics and physics and looking for a Ph. D. thesis in philosophy, it is probably not worth your time to read through the whole thing. You will have to dip in and extract what you can.
The basic idea of the book is clear enough. Economics doesn't understand the entropy law, but entropy is decisive in any understanding of economics. It's even deeper than that; no discipline fully understands the entropy law, and if you think about it broadly, everything is economics. What I mean by "everything is economics" is this: physics involves economics because it is an organization of knowledge that is efficient in understanding a particular part of nature. Ditto with chemistry, sociology, history, and all the other disciplines. They have all landed on something that is important and worth passing down to future generations. Inevitably, these disciplines have to pick and choose what to pass on and what to pass over. You can't possibly pass everything on (see "entropy, law of"). This choice ("important? not important?") is essentially an economic choice. So this book is really also about philosophy of science, as well as about the foundations of economics and indeed the foundations of all knowledge.
Unfortunately, the book's comprehensibility goes downhill quickly. This downhill progress is already present in the Introduction, and keeps up a steady pace of difficulty wherever you turn. There are a lot of mathematical equations, which left me asking, is this equation really necessary? And how much do I really need to know about Lentief or Lotka? What exactly is his point, and does all the detail really contribute to this point? There were a few references to authors I'd actually read, like Plato and Marx. But much more frequent were references to authors I'd heard of, but hadn't read (e. g. Paul Samuelson, Max Planck), and countless authors that I'd never even heard of (e. g. Alfred J. Lotka, Wassily Leontief, Paul Levy, Nicholas Kaldor, A. I. Khimchin).
True confessions: I read about 2/3 of the book, and lot of it is over my head. I've benefitted from reading and understanding what I could. I'd probably leave it on my shelf a little longer, but it's due at the library, and the book is rather expensive to purchase ($65 from Amazon). So, the entropy law appears once again. Perhaps to get you to this level of understanding was the author's real philosophical purpose.
As a practical matter, there's no way that I can look up all the authors to whom Georgescu-Roegen refers, or take time out to master all the physics and math involved. If you have done this, perhaps you could explain it to the rest of us? If, that is, it's worth your effort. Once again, we see the operation of entropy in our everyday lives, even as I wade through this intriguing but difficult book.
What I actually suspect, but can't prove, is that the author hadn't fully worked out all the connections himself, and that this book represents something like a roughly organized "core dump" of the information he had collected to that point. He realized that neither the economists, nor anyone else, really wanted to understand what he was saying anyway. So he just published the book and let the chips fall where they may, hoping that someone would be able to pick up the pieces later. By the way, I have read a number of his other essays and found them quite readable and insightful. He's clearly a smart guy. However, that doesn't mean it's worth my time to take the additional time to get through this book. I'd think about it if I was about 50 years younger and a graduate student in philosophy.
Bottom line: you should take a look at this book if you're interested in ecological economics or the philosophy of science. The author presents several intriguing ideas and spreads the applications all over the length and breadth of human knowledge, from Plato to modern physics. However, it is not really the foundational book for ecological economics specifically, which is the expectation I brought when I sat down to read the book. Read Herman Daly and others like him for this. Unless you are a graduate student in philosophy with background in economics and physics and looking for a Ph. D. thesis in philosophy, it is probably not worth your time to read through the whole thing. You will have to dip in and extract what you can.
July 22, 2017
I gave this book 100 pages to wow me, and it did no such thing. I thought that with the title Georgescu-Roegen would go right into the crux of his argument, but he is still explaining the background. For one thing, he has mentioned entropy and shows a phenomenal understanding of a lot of different subjects. I don't know why he needs to denigrate the works of so many great minds, but this is his modus operandi so to speak. Georgescu-Roegen has a passionate thing going on for Aristotle and keeps mentioning Arithmomorphic, which my spell-checker assures me is actually a word.
Anyway, I gave it a chance, but this book just made me angry. Perhaps I have some sort of cognitive dissonance going on with the subject matter, but he just keeps dancing around the topic. Get to the point. Thankfully I got it from the Library so I didn't have to pay anything for it. That is all I have to say.
Anyway, I gave it a chance, but this book just made me angry. Perhaps I have some sort of cognitive dissonance going on with the subject matter, but he just keeps dancing around the topic. Get to the point. Thankfully I got it from the Library so I didn't have to pay anything for it. That is all I have to say.
November 27, 2020
This is the closest you can come to truth and magic from the orthodox academic angle. An antimaterialist anthem
November 22, 2024
Rigorous, concise, and initially hard to grasp, but undeniably worth the time it took me to read and understand. This book challenges traditional economic thought by integrating the Entropy Law, linking thermodynamics—particularly the concept of entropy—with economics. It exposes the critical connections between economics, energy, and the environment. Nicholas Georgescu-Roegen’s insights provide an essential perspective on the limits of growth in a finite world, while offering a framework for understanding economic processes, natural resources, and human activity.
April 27, 2024
The writing style can be a little difficult, but this book is a huge innovation on the field of economics considering it was written in the 70’s. He was one of the first people to push the tying of ecology and economics together. I learned a lot from this book but I felt like he didn’t take his theory’s to the next step of conclusions, maybe due to the fear of the zeitgeist of the time. This book will age very well and has a lot of good information on general philosophy as well.
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June 3, 2019I read this ages ago. I think it was recommended by Amory Lovins. Most of it was over my head.
Displaying 1 - 10 of 10 reviews