Thermoeconomics

Thermoeconomics is the name given to a type of heterodox economic theory that attempt to explicitly apply the principles of thermodynamics to economics.^[1] The term "thermoeconomics" was coined in 1962 by American engineer Myron Tribus.^[2][3][4] Thermoeconomics can be thought of as the statistical physics of economic value.^[5][6] Thermoeconomics is based on the proposition that the role of energy in biological evolution should be defined and understood through the second law of thermodynamics but in terms of such economic criteria as productivity, efficiency, and especially the costs and benefits (or profitability) of the various mechanisms for capturing and utilizing available energy to build biomass and do work.^[7][8]

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Thermoeconomists claim that human economic systems can be modeled as thermodynamic systems then, based on this premise, attempt to develop theoretical economic analogs of the first and second laws of thermodynamics.^[9] In addition, the thermodynamic quantity exergy, i.e. measure of the useful work energy of a system, is the most important measure of value. In thermodynamics, thermal systems exchange heat, work, and or mass with their surroundings; in this direction, relations between the energy associated with the production, distribution, and consumption of goods and services can be determined.

Thermoeconomists argue that economic systems always involve matter, energy, entropy, and information.^[10] Moreover, the aim of many economic activities is to achieve a certain structure. In this manner, thermoeconomics attempts to apply the theories in non-equilibrium thermodynamics, in which structure formations called dissipative structures form, and information theory, in which information entropy is a central construct, to the modeling of economic activities in which the natural flows of energy and materials function to create scarce resources.^[1] In thermodynamic terminology, human economic activity may be described as a dissipative system, which flourishes by transforming and exchanging resources, goods, and services. These processes involve complex networks of flows of energy and materials.

See also

• Population dynamics

References

1. ^ ^{a b} Sieniutycz, Stanislaw; Salamon, Peter (1990). Finite-Time Thermodynamics and Thermoeconomics. Taylor & Francis. ISBN 0-8448-1668-X. 
2. ^ Yehia M. El-Sayed (2003). The Thermoeconomics of Energy Conversions (pg. 4). Pergamon.
3. ^ A. Valero, L. Serra, and J. Uche (2006). Fundamentals of Exergy Cost Accounting and Thermoeconomics. Part I: Theory, Journal of Energy Resources Technology, March, Volume 128, Issue 1, pp. 1-8
4. ^ Gong, Mei, Wall, Goran. (1997). On Exergetics, Economics and Optimization of Technical Processes to Meet Environmental Conditions. Exergy Studies.
5. ^ Georgescu-Roegen, Nicholas (1971). The Entropy Law and the Economic Process. Harvard University Press. ISBN 0-674-25781-2. 
6. ^ Chen, Jing (2005). The Physical Foundation of Economics - an Analytical Thermodynamic Theory. World Scientific. ISBN 981-256-323-7. 
7. ^ Peter A. Corning 1 *, Stephen J. Kline. (2000). Thermodynamics, information and life revisited, Part II: Thermoeconomics and Control information Systems Research and Behavioral Science, Apr. 07, Volume 15, Issue 6 , Pages 453 – 482
8. ^ Corning, P. (2002). “Thermoeconomics – Beyond the Second Law” – source: www.complexsystems.org
9. ^ Burley, Peter; Foster, John (1994). Economics and Thermodynamics – New Perspectives on Economic Analysis. Kluwer Academic Publishers. ISBN 0-7923-9446-1. 
10. ^ Baumgarter, Stefan. (2004). Thermodynamic Models, Modeling in Ecological Economics (Ch. 18)

Further reading

• Soddy, Frederick (1922). Cartesian Economics: The Bearing of Physical Science upon State Stewardship. London:Hendersons. 
• El-Sayed, Yehia, M. (2003). The Thermoeconomics of Energy Conversions. Pergamon. ISBN 0-08-044270-6.