UNINVITED GUESTS: A THERMODYNAMIC APPROACH TO RESOURCE ALLOCATION

A. Eddington, The Nature of the Physical World, The University of Michigan Press, Ann Arbor, Michigan, 1958, p.74.

This acronym is the suggestion of Martin O'Connor. Dr O'Connor kindly refereed this paper and alerted me that a deterministic and reductionist NET is probably a minority opinion.

H. E. Daly, Steady-State Economics, W.H. Freeman and Company, San Francisco, 1977.

N. Georgescu-Roegen, The Entropy Law and the Economic Process, Harvard University Press, Cambridge, Massachusetts, 1971.

J. Martinez-Alier, Ecological Economics: Energy, Environment, and Society, Basil Blackwell, Oxford, 1987.

J. Rifkin, Entropy: Into the Greenhouse World, Bantam Books, New York, 1989.

S. Carnot, Reflexion sur la puissance motrice du feu et sur les machines propres a developper cette puissance. 1912 Reimpression facsimile conforme a l'edition originale de 1824, Libraire scientifique A.Hermann and Fils, Paris.

L. Boltzmann, ‘Uber die Beziehung zwischen dem zweiten Hauptsatze der mechanischen Warmetheorie und der Wahrscheinlichkeitsrechnung respektive den Satzen uber das Warmegleichgewicht’, Wissenschaftliche Abhandlungen, 2, 1877, pp.164–223.

A. J. Lotka, ‘Contributions to the energetics of evolution’, Proceedings of the National Academy of Sciences, 8, 1922, p.149.

H. Odum, Systems Ecology, John Wiley and Sons, New York, 1983.

R. Swenson, ‘Emergent attractors and the law of maximum entropy production: foundations to a theory of general evolution’, Systems Research, 6, 1989.

J. Vogel, ‘Evolution as an entropy driven process: an economic model’, Systems Research, 1988, 5, 4, pp.229–312.

J. H. Justice, Maximum Entropy and Bayesian Methods in Applied Workshop 1984 University of Calgary, Cambridge University Press, Cambridge, 1986.

R. Carneiro, ‘A theory of the origin of the state’, Science, 169, 1970, pp.733–8.

M. Sahlins, ‘Evolution: specific and general’, in Marshall D. Sahlins and Elma R. Service (eds), Evolution and culture, University of Michigan Press, Ann Arbor, Michigan, 1960, pp.12–14.

R. N. Adams, Paradoxical Harvest: Energy and Explanation in Great Britain 1970-1914, Cambridge University Press, Cambridge, 1982.

J.L.R. Proops, ‘Organisation and dissipation in economic systems’, Journal of Social and Biological Structures, 6, 1982, pp.353–66.

A. Lotka, ‘The Law of Evolution as a maximal principle, Human Biology, 17, 3, 1945, p.192.

The relationship of information to the release of energy and material flows has also been induced by institutionalists: “The characteristics of information define the state of knowledge that underlies all social and economic processes”. See W. H. Melody, ‘Information: An emerging dimension of institutional analysis’, in Marc R. Tool (ed.) Evolutionary Economics, 2, 1988, p.361.

R. X. Chase, ‘A theory of socioeconomic change: entropic processes, technology, and evolutionary development’, Journal of Economic Issues, 4, 1985, pp.797–823.

Although all of this may sound a bit depressing, it need not be. Erwin Schrodinger thought we should be thankful that nature is deterministic: “… one begins to wonder… whether physical determinism is not perhaps quite a suitable correlate to the mental phenomenon of will, which is not always easy to predict ‘from inside’, To my mind this is the most valuable outcome of the whole controversy: the scale is turned in favour of a possible reconciliation of free will with physical determinism, when we realise how inadequate a basis (the) physical haphazard provides for ethics” (Science and Humanism: Physics in Our Time, Cambridge, The Cambridge University Press, 1952, p.62).

S. Fox, ‘Protenoid experiments and evolutionary theory’, in M.W. Ho and P.T. Saunders (eds), Beyond Neo-Darwinism, Academic Press, London, 1984, pp.15–60.

Even the left-handedness of amino acids is not some accident, some contingency of history that could easily have gone the other way, but has to do with a fundamental bias in nature toward left-handedness. See, e.g., D. Kondepudi, ‘Parity violation and the origin of biomolecualar chirality’, in Bruce Weber, David Depew, and James Smith (eds), Entropy, MIT Press, Cambridge, Massachusetts, 1988, pp.41–50.

A. I. Zotin, Thermodynamic Aspects of Development Biology, S. Krager, New York, 1972.

E. Baum, ‘Neural nets for economists’, in Phillip W. Anderson, Kenneth J. Arrow, and David Pines (eds.), The Economy as an Evolving Complex System, Addison-Wesley Publishing Company, Santa Fe, New Mexico, 1988, pp.33–48.

J. J. Hopfield, ‘Neural networks and physical systems with emergent collective computational abilities’, Proceedings of the National Academy of Sciences USA, 79, 1982, p.2554; and ‘Neurons with graded response have collective properties like those of two-state neurons’, Proceedings of the National Academy of Sciences USA, 81, 1984, p.3088.

M. S. Gazzaniga reduces mental activities into discrete units called modules: “…the term modularity refers to the collective action of several subprocesses that produce either overt or covert actions and behaviours. Studies on split-brain patients have revealed the presence of a system in the left hemisphere that interprets these actions, moods, and thought processes that are generated by groups of modules that are acting outside the realm of our conscious awareness”, (‘Organization of the human brain’, Science, 245, 1989, pp.947-52).

M. Faber, H. Niemes, G. Stephan, Entropy, Environment, and Resources: An Article in Physico-Economics, Springer-Verlag, New York, 1987.

M. O'Connor, The Thermodynamic Heuristic in a Neo-Austrian Environmental economics, Working Paper No.51. Department of Economics, University of Auckland, Private Bag, Auckland, New Zealand, 1988.

In the case of Faber et al., the adoption of mixing/concentration (Boltzmann entropy) to model resource allocation and the absence of nonrational behaviour and ethics in the degradation of those resources makes their synthesis seriously incomplete. The selection of phenomena to fit the language of a discipline and the truncation of all else that rightfully belongs, is the fallacy of misplaced concreteness (Alfred North Whitehead, Process and Reality: An Essay in Cosmology, Harper Brothers, New York, 1929). The fallacy was first enunciated in economics by N. Georgescu-Roegen op. cit.) and has been reiterated over the years by H. Daly (‘A.N. Whitehead's fallacy of misplaced concreteness: examples from economies’, Journal of Interdisciplinary Economics, 2, 1987, pp.83-9). To the extent that Faber et. al. have committed the fallacy in their otherwise excellent synthesis of economics and thermodynamics attests to the ease with which even the most competent theorist can fall victim. The insidiousness of the fallacy is that those who commit it are right within the domain they choose (e.g., the allocation of mineral resources); it is via the construction of a model that must exclude certain phenomena (e.g., nonrational behaviour and ethics) that properly belong to the domain that they are wrong.

This same false assumption of infinite substitutibility legitimates the neoDarwinian's disinterest in the origin of life. NeoDarwinians do not ask how the first replicator came into being; instead they ask how life changes once it has begun. When pressed about origins, they usually revert to a Newtonian metaphor of molecules behaving like bouncing balls; given enough time, they argue, here will be a fortuitous collision that can replicate (see, for example, R. Dawkins, The Blind Watchmaker, Norton, New York, 1986). The lifetime work of Sidney Fox (see, for example, The Emergence of Life: Darwinian Evolution from the Inside, Basic Books, New York, 1988) demonstrates just how wrong this argument is.

For a DARNET explanation of entrepreneurship, see J. Vogel, ‘Entrepreneurship, evolution, and the entropy law’, Journal of Behavioural Economics, 18, 3, 1989, pp. 185–204.

J. S. Wicken, Evolution, Thermodynamics, and Information: Extending the Darwinian Program, Oxford University Press, New York, 1987.

R.G. Lipsey and K. Lancaster, ‘The general theory of second best’, Review of Economic Studies, 24, 1956, pp.11–32.

C. Lumsden and E.O. Wilson have come to a similar conclusion in their pursuit of deterministic pathways from genes to mind to culture: “A society that chooses to ignore the implications of the innate epigenetic rules will still navigate by them and at each moment of decision yield to their dictates by default. Economic policy, moral tenets, the practices of child rearing, and virtually every other social activity will continue to be guided by inner feelings whose origins are not examined … Such an archaic procedure might lead in the most direct and untroubled manner to a stable and thoroughly benevolent culture. More likely, it will perpetuate conflict and relentlessly drag humanity along what is a tortuous and dangerous path” (C. Lumsden and E.O. Wilson, Genes, Mind, and Culture, Harvard University Press, Cambridge, Massachusetts, 1981, pp.358-60).

Society will have to identify the context in which otherwise harmless behaviours (e.g., tipsy at home) become dangerous (e.g., tipsy on the road). J. M. Keynes correctly foresaw the complexity of social engineering in the well intended prohibition: “How far is bored and suffering humanity to be allowed, from time to time, an escape, an excitement, a stimulus, a possibility of change? — that is the important problem. It is possible to allow reasonable licence, permitted Saturnalia, sanctified Carnival, in conditions which need ruin neither health nor the pockets of the roysterers, and will shelter from irresistible temptation the unhappy class who, in America, are called addicts?” (J. M. Keynes, Essays in Persuasion, W.W. Norton and Company, New York, 1963, pp. 333-4).

T. Kuhn, The Structure of Scientific Revolutions, University of Chicago Press, Chicago, 1962.

H. Johnson, Further Articles in Monetary Economics, Harvard University Press, Cambridge, Massachusetts, 1973, p.55.

For example, the thermodynamicist Peter Allen writes: “The equilibrium hypothesis is tenacious, mainly because it avoids all the real difficulties of life, and can lead to elegant theorems and lemmas, which are the very stuff of Ph.D.'s, professorial appointments and honorary degrees. Despite the fact that it flies in the face of everyday experience, it has therefore been the foundation on which the whole edifice of economic theory has been built,” (‘Evolution, innovation, and economies’, in Giovanni Dosi, et. al. (eds) Technical Change and Economic Theory, Pinter Publishers, New York, 1988).

P. Samuelson, ‘Maximum principles in analytical economies’, American Economic Review, June 1972, pp.249–62.

It is an historical fact that mathematical economics originates in forced analogies between Newtonian mechanics and social phenomena. See, e.g., P. Mirowski, Against Mechanism, Rowman and Littlefield, Totowa, New Jersey, 1988.

M. Faber and J.L.R. Proops, ‘Interdisciplinary research between economists and physical scientists: retrospect and prospect’, Kyklos, 38, 1985, pp.599–616.

During the transitional period of reduction, the discipline below is invariably resisted by the discipline above only to be later accommodated and accepted by “the younger and hungrier colleagues.” Perhaps NET will be different; with respect to the origins of life, NET advocates such as Wicken no longer consider themselves "uninvited guests" in neoDarwinian circles (See Wicken, op. cit., p.7.)