Possibility of Equilibrium Between the Environment and the Economy - Reviewing the Entropy Law
We as humans are obsessed with the concept of growth (ie perpetual exponential growth). This concept could not have come into existence if it wasn’t for the freely available energy resources (thought to be limitless). However, M. Hubbert’s prediction that oil reserves behave in a bell curve and that the world’s oil production will peak and drop exponentially, underlines Georgescu-Roegen’s point that natural resources are indeed limited.
M. Solow, acknowledged the laws of entropy (1997, p268), but neglected its relevance by stating that “these laws have no substantial consequences for economic analysis”. This, quite rightly was criticized by Herman E. Daly by asserting that these laws do not only apply to the universe as a whole, but to all systems that process mass or energy including economic production & consumption activities and that they have consequences as they rule out the common model of a closed nature independent economy that can grow without limits.
Stephen L. Gillett’s point, that free energy is the basic resource (not low entropy) is well put. But the argument that thermodynamic analysis can identify possibilities for technological developments is not detailed. He cites the example of fuel cells. He ignores the fact that the feasibility of such technology is depends heavily on freely available hydrocarbons (a limited natural resource in a low entopic state fulfilling the sufficient condition of usefulness) that can be broken down to produce hydrogen. This option becomes infeasible for the economy in case the indirect resource of sun’s energy becomes unavailable.
David Fisk on the other hand seems to have a casual approach towards inclusion of thermodynamics into economics. His contention that "a conventional critique of growth models that focused on the economics plausibility of over simplified depreciation representations and the classical economists rent from finite reserves would have been just as effective", is missing the point that
M. Solow, acknowledged the laws of entropy (1997, p268), but neglected its relevance by stating that “these laws have no substantial consequences for economic analysis”. This, quite rightly was criticized by Herman E. Daly by asserting that these laws do not only apply to the universe as a whole, but to all systems that process mass or energy including economic production & consumption activities and that they have consequences as they rule out the common model of a closed nature independent economy that can grow without limits.
Stephen L. Gillett’s point, that free energy is the basic resource (not low entropy) is well put. But the argument that thermodynamic analysis can identify possibilities for technological developments is not detailed. He cites the example of fuel cells. He ignores the fact that the feasibility of such technology is depends heavily on freely available hydrocarbons (a limited natural resource in a low entopic state fulfilling the sufficient condition of usefulness) that can be broken down to produce hydrogen. This option becomes infeasible for the economy in case the indirect resource of sun’s energy becomes unavailable.
David Fisk on the other hand seems to have a casual approach towards inclusion of thermodynamics into economics. His contention that "a conventional critique of growth models that focused on the economics plausibility of over simplified depreciation representations and the classical economists rent from finite reserves would have been just as effective", is missing the point that