Source: Herman Daly, "Beyond Growth", p. 29, 1996.
Economics & Entropy
"A word is in order about what I have omitted from Part I, but might have included. The relation of economics and entropy is mentioned, but not discussed in detail. For this the reader is referred to the magisterial work of the late Nicholas Georgescu-Roegen, The Entropy Law and the Economic Process.' A summary of his contribution is provided in Chapter 13, but it will be helpful to briefly outline here Georgescu-Roegen's insights regarding entropy and economics.
The main thrust of Georgescu-Roegen's ideas can be summarized in his "entropy hourglass" analogy (see figure 1).Figure 1: "Entropy Hourglass" (Georggescu-Roegen)
First, the hourglass is an isolated system: no sand enters, no sand exit.
Second, within the glass there is neither creation nor destruction of sand, the amount of sand in the glass is constant. This, of course, is the analog of the first law of thermodynamics-conservation of matter / energy,
Third, there is a continuing running-down of sand in the top chamber, and an accumulation of sand in the bottom chamber. Sand in the bottom chamber has used up its potential to fall and thereby do work, it is high-entropy or unavailable (used up) matter / energy. Sand in the top chamber still has potential to fall- it is low-entropy or available (still useful) matter/ energy. This is the second law of thermodynamics: entropy (or "used-up-ness") increases in an isolated system. The hourglass analogy is particularly apt since entropy is time's arrow in the physical world.
The analogy can be extended by considering the sand in the upper chamber to be the stock of low-entropy energy in the sun. Solar energy arrives to earth as a flow whose amount is governed by the constricted middle of the hourglass, which limits the rate at which sand falls, the rate at which solar energy flows to earth. Suppose that over ancient geologic ages some of the falling sand had gotten stuck against the inner surface of the bottom chamber, but at the top of the bottom chamber, before it had fallen all the way. This becomes a terrestrial dowry of low-entropy matter / energy, a stock that we can use up at a rate of our own choosing. We use it by drilling holes into its surface through which the trapped sand can fall to the bottom of the lower chamber. This terrestrial source of low-entropy matter / energy can be used at a rate of our own choosing, unlike the energy of the sun, which arrives at a fixed flow rate. We cannot "mine" the sun to use tomorrow's Sunlight today, but we can mine terrestrial deposits and, in a sense, use up tomorrow's petroleum today.
There is thus an important asymmetry between Our two sources of low entropy. The solar Source is stock-abundant, but flow-limited. The terrestrial Source is stock-limited, but flow-abundant (temporarily). Peasant societies lived off the abundant solar flow; industrial societies have come to depend on enormous supp1ements from the limited terrestrial stocks.
Reversing this dependence will be an enormous evolutionary shift. Georgcscu-Roegen argued that evolution has in the past consisted of slow adaptations of our "endosomatic organs" (heart, lungs, etc.), which run on solar energy. But the present path of evolution has shifted to rapid adaptations of our "exosomatic organs" (cars, airplanes, etc.), which depend on terrestrial low entropy. The uneven ownership of exosomatic organs and of the terrestrial stocks of low entropy from which they are made, compared to the egalitarian distribution of ownership of endosomatic capital, is for Georgescu-Roegen the root of social conflict in industrial societies.
One more thing. Unlike a real hourglass, this one cannot be turned upside down! Its central feature is what Georgescu-Roegen called the "metabolic flow," the entropic throughput of matter / energy by which the economy depends on its environment. This dependence is completely abstracted from in the neoclassical economist's starting point, the circular flow of exchange value."