The founder of ecological economy  Nicholas Georgescu-Roegen
(1906-1994)

The main contribution of this Romanian economist was "The Law of Entropy and the Economic Process" (The Entropy Law and the Economic Process). This work where for the first time ecological economics was defined as an integral system was published in 1971. In turn it had been preceded by an introductory essay to analytical economics in 1965.
Many years later, his revolutionary vision is still ignored by the prevailing paradigm (which he himself had helped to solidify). Although he died without being fully recognized, his work has become an uncontainable reference of contemporary economics. Though dismissed by many, his theory of the law of entropy and economics provided the key to understanding the enormous limitations of orthodox economics.
In his work Georgescu changed the flow diagram that allows to represent the economic process.
Before, the economic flow was a circular flow isolated from the industries / companies to the consumers and vice versa, without entrances or exits.
This circular diagram serves to some extent to analyze exchanges but fails miserably to study production and consumption appropriately. It is a diagram in which maintenance and replacement would seem to take place internally, without dependence on the environment.
It is as if we studied an animal with a circulatory system but without mentioning the digestive system. The circulatory apparatus itself would be a machine of perpetual motion.
Real animals have digestive systems that connect them to the environment at both ends.
They continually take matter with low entropy and evacuate it with high entropy. An organism can not recycle its own waste. Luckily, biology books do not omit the digestive system.
However, in economcs only the circulatory system exists. This occurs in both Marxist and neo-classical economics. What is the concept in economics that relates it to its environment?
Some speak of "throughput". In any case, if it existed, scarcity was not considered and therefore it was omitted from the economist's view.
The conclusion is that our revised text should show a different diagram: a flow of matter and energy represented by lines emanating from environmental sources leading to producers and consumers and evacuated to the environment through the outlet (environmental "sink").

There can not be an economy without this entropic flow. However, an economy without a circular flow is conceivable (in the case of an economy of self-sufficient peasants without exchange).
The problem with the ortodox view is that the concept of entropic flow is like a Trojan horse ... once it is accepted on the book cover, its implications attack all its chapters and concepts.
Let's see.
The standard economy is mechanistic. It deals with profits and self-interest.  It studies reversible phenomena "without quality"
Circular flow is non-qualitative and reversible. The entropic flow is qualitative and irreversible.
Entropy is the measure of the qualitative difference between useful resources and useless waste.
This qualitative change is irreversible.
That is why mechanistic models can not be used to interpret this basic fact of economic life.
On the other hand, the presence of the entropic flow, which is necessary to maintain the economic process, necessarily induces qualitative changes in the same environment on which it depends because what it returns is qualitatively different from what it extracts.
As the environment changes, the economy must adapt. It is a process of co-evolution.
The arithmomorphic model is useless because it can not deal with dialectical concepts that include evolving penumbra. Dialectical approaches must be included in order to encompass these changing concepts.
According to the circular view, production consists of "ordering" indestructible blocks to provide gain, and consumption consists in cluttering those blocks as a result of their use, destroying their capacity for utility. But then the production takes the blocks again and reorders them, and so the cycle continues. This is not contradictory with the first law of thermodynamics (conservation of matter and energy), but it is with the second law: the law of entropy.
In the mechanistic book, natural resources and the environment are an "annex". In the revised book they constitute the essence of the analysis.
Another consequence of the analysis is about unlimited growth.
According to the orthodox book, growth can continue forever because the abstract value of change has no physical dimension.
However, growth in an entropic flow approach finds the physical barriers of pollution, depletion and ecological degradation.
In the traditional agrarian economies the difference is not very great because they depend on sunlight which is an abundant source of low entropy.
Industrial economies, on the other hand, are more dependent on sources of low entropy that are rather scarce (minersl fuels and minerals) and focus on the accumulation of abstract exchange value (debt, "negative" pigs). For this approach more is synonymous with better ...
In this economy, pollution and emptying are a expected consequence and not surprising externalities as in the circular flow diagram.
Of course, technological adaptation is possible. But such technologies tend to extract more quality of life (benefiting the future and the present at the same time) or more production (benefiting the present at the expense of the future).
In orthodoxy it is thought that natural resource blocks are only valuable because man adds them. Georgescu says that nature also adds value and that value is what differentiates resources from waste.
In the circular flow diagram we have an intergenerational harmony and a helping hand, in the entropic flow diagram we have intergenerational conflict and potential obstacles. .
Another consequence is the conclusion that growth can not forever replace redistribution and demographic control.
Poor countries will not be able to get out of poverty simply by turning the wheels of their circular diagram faster. Rather they must redistribute their wealth, control their population, etc.
It is curious how the national accounts are calculated taking into account the depreciation of the artificial goods and forgetting the depreciation of the natural resources. A country could deplete its mines, cut down its forests, erode its soils and end its wildlife and fisheries, and at the same time its national accounts could be pointing to growth during that period as those resources disappear.
If we look at the entropic flow we must pay attention to the natural capital that produces this vital flow.  Capital and labor are conceived as funds or agents that transform a flow of natural resources into the flow of products.
Thinking that capital is a good substitute for resources is like imagining that you can make a house just as big with double sawdust and half the wood.
The concept of optimum population must be reanalized. Instead of asking how many people? we must ask: how much population for how long and based on what resources.
From "Drought in a Water World". Danilo Anton, C.I.R.A., Piriguazú Editions.

Life's Chaotic: Let's Learn About Entropy

There are some universal certainties. Death. Taxes. The second law of thermodynamics. I'm sure you'll find plenty of articles online and off about the first two things on that list, but this one is about the third. This law, first identified by Sadi Carnot in 1824 in his musings of how the useful but mysterious steam engines actually worked, stands tall and proud today, elevated into an immutable fact of existence. No matter how hard you try, you simply can't escape the iron grip of its cold, relentless conclusion: In isolated systems, the entropy cannot decrease.

Count the molecules

If I gave you a box of air and asked you to measure its properties, your first instinct would be to bust out a ruler and thermometer, recording important scientific-sounding numbers like volume, temperature or pressure. There's a good reason that's your first instinct. You know that something like "air" is really a collection of buzzing and jumbling microscopic molecules. You might imagine — briefly — that you could record all the positions and velocities of every single molecule, but you would quickly abandon such notions as overly cumbersome and also silly.

After all, numbers like the temperatura, pressure and volume give you all the information you actually care about. Those facts will tell you everything you need to know about how the box of air will behave if you opened it, squeezed it or blew it up. It doesn't really matter how all those tiny particles arrange themselves — that's their business, not yours.

And that's exactly the point. There are so many different ways of arranging the  air molecules in your box that lead to the exact same pressure, temperature and volume. Swap one particle with another — would you even notice? Turn a few of the them around — did you even catch it? No, you didn't. The pressure, temperature and volume could all remain unchanged.

And here's where entropy comes in. The concept of entropy captures the number of different ways you can rearrange the stuff you can't see (the tiny air particles) to still get the exact same measurements you can see (like the pressure).

Changing times

That's nice, but why should that number never, ever decrease? To explore, let's clean your room.

Imagine finally getting it together, clearing your weekend schedule, waking up early, grabbing that cup of joe, and doing the thing you've been putting off since the holidays: cleaning your room. Top to bottom, wall to wall. Clean and organized. A place for everything and everything in its place. Perfection.

How long do you think that Platonic ideal of a room will last? Not long, you realize, as the Sisyphean nature of your endeavors — and perhaps your entire existence — clicks into sharp focus.

But why shouldn't your room stay neat and tidy for years to come? Because if just one thing — one single thing — changes, it's no longer clean. A dirty sock on the bed? Messy. A pillowcase ruffled? Messy. A box of snack crackers on the nightstand? I won't judge, but also messy. 

In this example, there are only select arrangements that lead to the measurement of "clean," but there are millions upon millions of possible arrangements that lead to the measurement of "messy." If a tornado were to strike your newly cleaned room, what are the chances of it remaining in the clean state? It's not zero: The tornado, by pure random chance, could pick up every single thing in your room and return it to its original spot. But that one tiny chance in the ultimate Powerball ticket — and let's face it, you're not going to be the winner. You are much, much more likely to find a messy room after the tornado strike, simply because there are so many more ways for a room to be messy.

Entropy is a harsh mistress

Similarly, there's absolutely nothing stopping the air molecules in your room from collectively deciding to head in the same direction and crowd into the corner, leaving you to asphyxiate in the vacuum. Seriously, no law of particle or molecular interactions prevents that. But the motion of air molecules is governed by countless random collisions and movements — a never-ending molecular tornado of activity. These innumerable motions will essentially always leave the air in a disorganized, messy state: evenly spread all throughout the room. And all because there are so, so many more ways for the air to be spread out than crammed into a corner.

Ultimately, systems never move from disorder to order (unless there's a way to add energy to them, but that's a story for another article) because of the sheer overwhelming statistics preventing it. The likelihood of a disorderly state versus an orderly state isn't something like 10 to 1 or 3,720 to1, it's more like trillions upon trillions upon trillions (and throw a few more trillions in there just for good measure) to 1. 

As in the case of our once-tidy room, there are very few ways to make a clean room, and an overwhelming number of ways to make a messy one. And different arrangements of "messy" (like a dirty sock left on the bed versus on the dresser) will lead to the same measurement of temperature or pressure. Entropy captures the number of different ways you can rearrange your messy room to get those same values. And systems, left to their own chaotic devices, will always seek higher entropy, simply because there are a lot more ways to make a mess than make a clean: the second law of thermodynamics.

By Paul Sutter, Astrophysicist, 2019 

Reproduced from Space.com

https://www.space.com/43138-life-is-chaotic-entropy.html

The founder of ecological economy  Nicholas Georgescu-Roegen
(1906-1994)

The main contribution of this Romanian economist was "The Law of Entropy and the Economic Process" (The Entropy Law and the Economic Process). This work where for the first time ecological economics was defined as an integral system was published in 1971. In turn it had been preceded by an introductory essay to analytical economics in 1965.
Many years later, his revolutionary vision is still ignored by the prevailing paradigm (which he himself had helped to solidify). Although he died without being fully recognized, his work has become an uncontainable reference of contemporary economics. Though dismissed by many, his theory of the law of entropy and economics provided the key to understanding the enormous limitations of orthodox economics.
In his work Georgescu changed the flow diagram that allows to represent the economic process.
Before, the economic flow was a circular flow isolated from the industries / companies to the consumers and vice versa, without entrances or exits.
This circular diagram serves to some extent to analyze exchanges but fails miserably to study production and consumption appropriately. It is a diagram in which maintenance and replacement would seem to take place internally, without dependence on the environment.
It is as if we studied an animal with a circulatory system but without mentioning the digestive system. The circulatory apparatus itself would be a machine of perpetual motion.
Real animals have digestive systems that connect them to the environment at both ends.
They continually take matter with low entropy and evacuate it with high entropy. An organism can not recycle its own waste. Luckily, biology books do not omit the digestive system.
However, in economcs only the circulatory system exists. This occurs in both Marxist and neo-classical economics. What is the concept in economics that relates it to its environment?
Some speak of "throughput". In any case, if it existed, scarcity was not considered and therefore it was omitted from the economist's view.
The conclusion is that our revised text should show a different diagram: a flow of matter and energy represented by lines emanating from environmental sources leading to producers and consumers and evacuated to the environment through the outlet (environmental "sink").

There can not be an economy without this entropic flow. However, an economy without a circular flow is conceivable (in the case of an economy of self-sufficient peasants without exchange).
The problem with the ortodox view is that the concept of entropic flow is like a Trojan horse ... once it is accepted on the book cover, its implications attack all its chapters and concepts.
Let's see.
The standard economy is mechanistic. It deals with profits and self-interest.  It studies reversible phenomena "without quality"
Circular flow is non-qualitative and reversible. The entropic flow is qualitative and irreversible.
Entropy is the measure of the qualitative difference between useful resources and useless waste.
This qualitative change is irreversible.
That is why mechanistic models can not be used to interpret this basic fact of economic life.
On the other hand, the presence of the entropic flow, which is necessary to maintain the economic process, necessarily induces qualitative changes in the same environment on which it depends because what it returns is qualitatively different from what it extracts.
As the environment changes, the economy must adapt. It is a process of co-evolution.
The arithmomorphic model is useless because it can not deal with dialectical concepts that include evolving penumbra. Dialectical approaches must be included in order to encompass these changing concepts.
According to the circular view, production consists of "ordering" indestructible blocks to provide gain, and consumption consists in cluttering those blocks as a result of their use, destroying their capacity for utility. But then the production takes the blocks again and reorders them, and so the cycle continues. This is not contradictory with the first law of thermodynamics (conservation of matter and energy), but it is with the second law: the law of entropy.
In the mechanistic book, natural resources and the environment are an "annex". In the revised book they constitute the essence of the analysis.
Another consequence of the analysis is about unlimited growth.
According to the orthodox book, growth can continue forever because the abstract value of change has no physical dimension.
However, growth in an entropic flow approach finds the physical barriers of pollution, depletion and ecological degradation.
In the traditional agrarian economies the difference is not very great because they depend on sunlight which is an abundant source of low entropy.
Industrial economies, on the other hand, are more dependent on sources of low entropy that are rather scarce (minersl fuels and minerals) and focus on the accumulation of abstract exchange value (debt, "negative" pigs). For this approach more is synonymous with better ...
In this economy, pollution and emptying are a expected consequence and not surprising externalities as in the circular flow diagram.
Of course, technological adaptation is possible. But such technologies tend to extract more quality of life (benefiting the future and the present at the same time) or more production (benefiting the present at the expense of the future).
In orthodoxy it is thought that natural resource blocks are only valuable because man adds them. Georgescu says that nature also adds value and that value is what differentiates resources from waste.
In the circular flow diagram we have an intergenerational harmony and a helping hand, in the entropic flow diagram we have intergenerational conflict and potential obstacles. .
Another consequence is the conclusion that growth can not forever replace redistribution and demographic control.
Poor countries will not be able to get out of poverty simply by turning the wheels of their circular diagram faster. Rather they must redistribute their wealth, control their population, etc.
It is curious how the national accounts are calculated taking into account the depreciation of the artificial goods and forgetting the depreciation of the natural resources. A country could deplete its mines, cut down its forests, erode its soils and end its wildlife and fisheries, and at the same time its national accounts could be pointing to growth during that period as those resources disappear.
If we look at the entropic flow we must pay attention to the natural capital that produces this vital flow.  Capital and labor are conceived as funds or agents that transform a flow of natural resources into the flow of products.
Thinking that capital is a good substitute for resources is like imagining that you can make a house just as big with double sawdust and half the wood.
The concept of optimum population must be reanalized. Instead of asking how many people? we must ask: how much population for how long and based on what resources.
From "Drought in a Water World". Danilo Anton, C.I.R.A., Piriguazú Editions.