Sunday, October 28, 2018

Modern economics violates thermodynamics

More importantly, the traditional treatment of additive capital and economic consumption appears to violate the Second Law of Thermodynamics. Although sometimes overlooked, perhaps the most profound implication of the Second Law is that it forbids the existence of isolated systems, either in space or time. By necessity, everything is connected through dissipative flows, even if the connection is very remote.
Assuming the Second Law applies equally to human systems, it would seem problematic to treat something like physical capital as being purely mathematically additive, as is presumed in traditional treatments. A better perspective might be that the magnitude of civilization wealth lies in its connections or a network, insofar as network elements allow for the dissipative flows that sustain it.