title: Entropy Analysis of an Economic Activity: A Case Study of Simple Brickmaking in China
Creators: name: Coulter, John Edward
Publisher: name: Griffith University
Year: 1993
Subjects: subject: Entropy analysis
subject: Thermodynamics
subject: Second Law of thermodynamics
subject: Economics
subject: China
subject: Brickmaking
subject: Industry
subject: Locked up electromagnetic forces
subject: Electromagnetic forces
subject: Radiated electromagnetic forces

description: 1. There is a crisis in economics. The discipline evolved in nineteenth century Europe and is difficult to adapt to modern conditions, even in the West, and particularly in alien cultures. Application of conventional economic analysis to economic activity in a culture as alien as traditional China highlights the biases in assumptions of the paradigm. 2. The concepts, models and vocabulary evolved over one hundred years ago predate important developments in the natural sciences. It is now necessary for economists to concede no goods can ever be 'produced', and they are not 'consumed' either. In clear terms matter is transformed, but is not created or destroyed (First Law of Thermodynamics). 3. When people transform matter, in lay language we say energy is 'used'. In a simple cottage industry, 'raw material' is transformed into a commodity in front of our eyes by the use of human energy and the release of energy from a 'fuel'. In modem complex economic activity, it is difficult or impossible to keep track of the processes from raw matter to transformed 'product' although the principle is the same. 4. The Second Law of Thermodynamics states that in any transformation, energy is not created or destroyed, but becomes 'less available'. In short, entropy increases. This appears to work well for pure physics and chemistry, but its application to analysis of economic activity has only been notional. 5. There is a reason why economists borrowing terms from hard science experience difficulty. It is because physicists and chemists have addressed specific laboratory and engineering problems, but not the broader economic issues. The hypothesis gradually evolved in this research program that not only economic concepts and terms needed reworking, but those in physics as well. The definitions of energy as 'ability to do works and of entropy as 'unavailable energy' jar the logic of our commonsense. 6. The notion of 'available energy' was traced back to the phenomenon in physical chemistry known as exothermicity, or the release of energy during a chemical reaction. It was reasoned that while scientists had focussed on this phenomenon and measured it carefully they saw no need to ask where the energy came from, or to measure its transformation. From the perspective of analysing economic activity, the question was important. 7. It was hypothesised that the energy released from a fuel as electromagnetic radiation (mainly heat) was the residual of the set of coulombic forces within atoms that maintain the structure of shells of electrons around the protons. This idea in turn came from the presumption that molecular bonding is a residual of vectors of the set of coulombic forces within atoms, and the likelihood that in an exothermic reaction, after the reactants are said (by scientists) to 'seek equilibrium', product molecules have a portion of the coulombic forces 'left over' and not required to maintain their structures. An estimate was made of the coulombic forces extant in various fuels, and compared with the known data for their release of energy. 8. The idea was developed in detail. The concept we call in economics, 'production', and should call 'transformation' can only occur when forces locked within atoms are released as electromagnetic forces. (Gravitational forces exist because matter has been put 'there' by electromagnetic radiation). When 100 grams of dry grass fuel is burnt, about 2 megajoules of electromagnetic radiation are released. It was estimated that the coulombic forces between each electron and proton in that amount dry grass total 150 gigajoules (or giganewtons, since the reference is to forces). 9. Within the boundary of a simple economic activity, the ratio of aggregated coulombic forces locked up within atoms to the electromagnetic forces radiated out was estimated at the beginning of the activity, and then after a duration. The ratio of forces always tends towards 'evening out'. This measurement captures the entropy phenomenon which has been said by Georgescu-Roegen to be the basis of all economic activity. 10. At the roots of the economic paradigm founded by Adam Smith is the premise that the material world, as a set of substances, is a stage on which economic actors 'add value', bid prices up and down, and by their rational perception manage their livelihoods and surroundings well. From the findings of this research program it is contended that the surroundings of economic actors can be classed into two categories: locked up (coulombic) electromagnetic forces, and radiated electromagnetic forces. The former has a tendency to convert to the latter. All action, including all economic activity, and all life can be traced to a point in space and time where this conversion is (naturally) occurring. The phenomenon is analogous to a slope where water cascades, and gravitational potential energy converts to other (either useless or useful) forms of energy. To appreciate the nature of this phenomena, and to attempt to fathom its dimensions, sets our perceptions of ourselves as economic actors in a quite different and very humbling context.