Re: Entropy.

[BILL MITCHELL <ECWFM@xxxxxxxxxxxxxxxxxxx>]

>Could someone please explain a specific case in which entropy is
>crucial and the concept of entropy changes one's analysis of a specific
>economic issue?  I don't doubt that it could be done, I am just
>confused.

Jim

there was all this fancy stuff round that suggested that the laws of
thermodynamics could be applied to economics b/c the analogy as an energy using
system was appropriate. accordingly the 2nd law suggests that a system must
continue to receive energy to remain in motion. i once heard someone argue that
by applying this to macro one gained the perfect raison d'etre for government
intervention in the sense that if private sector investment failed to maintain
the energy, then the govt sector should.

i thought at the time it was a pretty far fetched detour to make a point well
founded in left economics.

but mostly i have seen the concepts of entropy applied in the management and
organisation literature. i also read somewhere an argument that the stipulates
of negative entropy meant we had to maintain economic growth or else the system
would fail to maintain energy. sounded like an anti-Club of Rome approach at
the time.

my suggestion. please don't worry about it.

kind regards
bill