Thermodynamics and economics. A review of Nicholas Georgescu-Roegen proposal and the critics

Presented at the 17th Biennal Conference of the international society for ecological economics, Santa Marta, Colombia, October 23-28, 2023
William Sacher and Paul Cooney, 2023, [email protected]

Abstract
Nicholas Georgescu-Roegen is recognized as one the fathers of ecological economics and a pioneer regarding the integration of thermodynamics and economics, particularly through the concept of entropy and the second law of thermodynamics. His work in this realm has been a major contribution in terms of understanding of economics as a system embedded and constantly interacting with Nature. His discussion of how thermodynamic laws constrain economic activities constituted a very relevant example of the pursuit of interdisciplinarity, if not transdisciplinarity. However, since Georgescu-Roegen work in the 1970-1980s and despite promising potentialities to describe and analyze aspects of the nature-society metabolism and environmental and ecological concerns in the present-day such as the issue of recycling, there has not been a single consolidated theory which has been universally accepted regarding the constraints thermodynamics laws exert on economic processes. In particular, there has been much debate about his work on the fourth law of thermodynamics.

This paper begins with an evaluation of the range of definitions of entropy and the absence of a unified definition of the concept. A review of the different definitions is presented; those coming from classical and statistical thermodynamics and from the theory of information. An assessment of the current state of the art regarding how these definitions relate to each other and to the laws of thermodynamics is made.

This is followed by a synthesis of the theoretical framework proposed by Nicholas Georgescu-Roegen (entropy-matter, 4th law of thermodynamics, etc.), followed by an evaluation of the defenders and critics of NGR’s work, including authors from a range of fields, such as, physics, geology, economics and industrial ecology. In conclusion, it is evident that more work is still needed to establish a more rigorous dialog between thermodynamics, physics and economics and to extend beyond the critical advances of Nicholas Georgescu-Roegen to address global issues of economics and the environment in the present day.