ENTROPY: A BAFFLING CONCEPTION?

Dick Pountain /The Political Quarterly/ 22 May 2025 02:06

Book Review: Entropy Economics: The Living Basis Of Value And Production by James K. Galbraith and Jing Chen; University Of Chicago Press 2025; pp248; £25.76

“The second law is the most metaphysical law of physics since it points out without interposing symbols, without artificial devices of measurements, the direction in which the world is going.”
— Henri Bergson, Creative Evolution (1907)

Thermodynamics is possibly the branch of science that’s least understood, and least enjoyed, by the general public. People who didn’t take A-level Physics will probably only be familiar with a couple of its concepts, namely ‘entropy’, understood as a synonym for chaos, and ‘the Second Law’ as a portent of doom, the eventual demise of everything including the universe itself. Neither understanding is entirely wrong, but neither is especially useful. In fact thermodynamics is the most profound way of understanding the world and everything we undertake in it, mostly because of the constraints it imposes (which may well explain its unpopularity). It’s why we can’t have perpetual motion machines, why climate change happens and is so hard to mitigate, and why we age. 

The internet is full of clever visualisations that explain difficult science topics, but the most popular by far are about quantum mechanics and cosmology, not thermodynamics. The weird incomprehensibility of quantum behaviour can be misinterpreted as making room for magic, the glorious star-scapes from the James Wigg Telescope show us the vastness of space (which Elon Musk and Jeff Bezos would like to open up as a holiday destination). Thermodynamics merely explains frostily why it ain’t going to happen…

In fact entropy is neither chaos nor order but rather a universally applicable concept that distinguishes between them – it’s a quantitative property that can be measured, but explaining it in plain language is hard. (Albert Mathews’ 1927 work ‘The Nature of Matter, Gravitation, and Light’ labelled it “an extremely baffling conception”). The idea arose historically from studying the physics of steam engines and observing that heat will only spontaneously flow from hot places to cooler places, never in the opposite direction. Such a heat flow can be harnessed to perform work, which increases the overall entropy of the system. Reversing the flow (say in a refrigerator) requires exerting work. 

Physicists soon realised that entropy applies not just to heat but to all forces of nature that evolve in the direction of less orderliness, the basis of the infamous Second Law. In particular it applies to all living things and hence to humans – we all age, die and decompose thus increasing the entropy of the universe. Humans have understood from ancient times that the Sun is what gives us light, life and sustenance. Nowadays we know that plants employ chlorophyll to trap sunlight and turn carbon dioxide from the air into sugars, which animals eat to make proteins from which to make their mobile bodies. The Earth actually re-radiates all the energy it receives from sunlight back into space, but at a lower quality than it received. That quality consumed is entropy, and it drives all living things, ocean circulation, the weather…

James K. Galbraith and Jing Chen believe that entropy also applies to human institutions like the economy. Galbraith (son of J.K.Galbraith, famous 1960s exponent of Keynesian economics) is Professor of Government-Business Relations at the University of Texas, specialising in inequality studies; Jing is a Professor of Mathematics at the University of British Columbia and specialises in the physical basis of economics. Their book is a collaborative critique of mainstream economic theory, which they regard as a mathematical travesty unable to fully model problems of the real world.

They claim that the standard equilibrium model of the economy, which matches supply with demand, is an ideological construct that portrays capitalism as politically neutral, inevitable and eternal (in rather the same way that Fukuyama’s ‘End Of History’ represented geopolitics). Equilibrium theory treats recessions and crashes as unfortunate deviations from the perfect self-regulation of markets, and also fails to deal realistically with resources, which it regards as infinitely available, and with waste products which it tries to hide because they’re not profitable.

Galbraith and Jing set out an alternative theory that’s biophysically realistic to oppose this quasi-religious belief in self-regulating and all-knowing markets:

“The theories of value and production are the foundations of economic theory. Both should be consistent with life processes and physical laws […] Given the universality of the entropy law, it is natural to suspect that entropy somehow forms the basis of economic value. And indeed, this thought is not entirely new; an entropy theory of value is a scarcity theory, very familiar in the history of economic thought”

 To build this biophysically realistic theory the authors adopt an insight from Claude Shannon – the American electrical engineer father of Information Theory – that entropy and information are connected by a logarithmic relationship. We all recognise what exponential growth looks like: the reproduction of rabbits or locusts, the burning of gunpowder, any process that grows bigger and bigger, faster and faster. A logarithmic process is more or less the opposite, one that starts fast and then slows down: it’s a template for modelling decline and exhaustion, like diminishing returns, depreciation of machinery, decay, decomposition and ageing. In short, 2nd Law Entropy. Galbraith and Jing take Shannon’s formula and turn it into their definition of economic value:

V is value, P is the probability, that is the scarcity, of some resource or artefact, and b is its number of suppliers. (Don’t panic, this is the only formula I intend to present here). Their first two chapters examine equilibrium and non-equilibrium dynamics, linear, non-linear and chaotic systems, boundaries and inequalities, the role of regulation and government, to analyse the shortcomings of equilibrium economics and justify the need for biophysical realism.

Chapter 3 examines previous theories of value: the Labour theories of Ricardo, Marx, Sraffa and Pasinetti; the Utility theories of Jevons, Marshall and Arrow-Debreu, and the Scarcity theories of Walras, Schumpeter and Georgescu-Roegen. Chapters 4, 5 and 6 unfold their own entropy/scarcity based theories of value, resource use and production, and apply these to some simple examples. In the economic sphere production means taking low-entropy resources – say a seam of metal ore or coal in the ground – then mining, burning, smelting, forging, manufacturing and widely distributing the products, so increasing their value. Value may also be increased by other means:

“In practice, the most important method to enhance valuation is to reduce the number of providers, creating monopoly or oligopoly. Governments enjoy many forms of monopoly, including over legalized violence, judicial punishments, and taxation. Governments grant monopolies, through patents, intellectual property rights, regulation, and industry standards. Businesses seek monopoly through technological innovation and market dominance, sometimes legal and sometimes not. Unions seek monopolies in bargaining — also called countervailing power— to help workers enjoy some of the fruits of their employers’ monopoly power.”

 Chapter 7 expounds Chen’s full mathematical treatment of their theory of production. I’m fairly adept at differential calculus but this goes way, way beyond my pay-grade (it involves partial differential equations and Richard Feynman’s path integrals for stochastic processes). We know that during the derivatives boom that preceded the 2007-8 Wall Street crash, brokers were recruiting young particle physicists straight out of MIT and Caltech, because pricing complex future derivatives demands their level of mathematical skill. They came up with the infamous Black-Scholes Equation, which worked very well until it didn’t… 

Chen’s production equation turns out to be effectively the same thing with a minus sign in front of it, which changes it from being about finance (how much to pay for risky stock-market speculations today) to production (what future returns to expect from capital investment today).

The final chapter 8, ‘Life in a World without Equilibrium’, collects together the implications of the authors’ new theories for the future of energy usage, climate change and demography, a disturbing conclusion that departs some way from mainstream progressive opinion. Readers of this journal who aren’t professional economists may find this chapter alone justifies reading the book.

Mainstream economists assume constant returns to scale, so that ever-increasing resource use will yield ever-increasing outputs, but in the real world finite resources can be depleted – and that applies to human labour, water, soil, even land. The unique chemical properties of carbon permitted the emergence of all our life forms: all the major non-renewable energy sources we depend upon – coal, oil, natural gas – arose from the fossilised remains of living carbon-based organisms. Our civilisation is the Fossil Fuel Civilisation, but it’s increasing the cost of all these low-entropy, high-quality resources while causing warming of the climate, rising of sea levels and a decline of human fertility. Avoiding these pitfalls will require us to move away from burning fossil fuels to alternative renewable energy sources – some existing, others still being developed – and to do that we have to accurately determine their Energy Return on Investment (EROI), which encompasses all the actual costs of research and deployment. Only if EROI is greater than one does that technology provide net energy to society. 

However monetary returns – especially in economies with large degrees of monopoly – don’t always provide an accurate measure of EROI, thanks to intervention by powerful interest groups (the sums involved are enormous). The authors consider two prominent kinds of renewable energy, corn-based ethanol and photovoltaic solar power, and conclude that low EROI makes these only viable with government subsidy:

“It is difficult to rule out the possibility that human beings can develop new technologies that have significantly higher overall efficiency in energy use than other living organisms and our own ancestors. But if research and development costs are included, the likelihood will be low. Human beings, like other dominant species, excel at extracting resources, not at using resources more efficiently.”

 They conclude that we will most likely fail to deal with global heating, that a warmer climate with raised levels of CO₂ will probably ‘green’ the Earth by enhancing plant growth, but not nearly fast enough to prevent the collapse of our current economic structures. Much of our current infrastructure will be rendered obsolete and economic activity unprofitable:

“The future of human society is likely, for a long time, to devolve back to smaller populations, shorter life spans, higher variable costs, and lower fixed costs, along with smaller countries and harsher inequalities both within and between them. Social arrangements, advance planning, new energy sources, and new investments can mitigate the suffering from this transition, up to a point. But this, very likely so far as we understand it, is the biophysical reality with which future economists, engineers, and planners will have to engage.”

Enjoy the rest of your day.

 

NO WOKERY

Dick Pountain /The Political Quarterly/ 16 Jul 2024 03:35

Left Is Not Woke by Susan Neiman: Polity; June 2023; pp160; £15.17

When a civilisation begins to unravel, the first symptoms will often appear in its language. As its population drifts apart into mutually hostile camps, certain words will start to be used as epithets to hurl at each other as a precursor to hurling stones. ‘Woke’ is currently one of those words (another is ‘fake’). Susan Neiman observes that the first recorded appearance of the phrase ‘stay woke, keep your eyes open’ was by folk-blues singer Lead Belly in 1938 when discussing his song ‘Scottsboro Boys’, which he recorded to support the campaign to save nine black teenagers wrongly accused of rape in Alabama. He meant by it, stay aware of various forms of oppression that people were suffering, by white against black, rich against poor, men against women.

Revival of the word ‘woke’ began sometime around 2010-13 on social media and US student campuses during the agitation over Black Lives Matter, and its application has since expanded rapidly from racial to many other forms of perceived social discrimination and disadvantage, even to hurtful speech and matters of identity. There is however a significant difference from its 1938 meaning: the campaign to save the Scottsboro Boys was organised by the US Communist Party which was committed (nominally at least) to universal emancipation by abolishing capitalism. In contrast, most current campaigns for increased diversity – of race, gender and more – appeal to the importance of having people who “look like me” in positions of authority. Neiman claims that woke has ceased to be universalist: “Universalism is under fire on the left because it’s conflated with fake universalism: the attempt to impose certain cultures on others in the name of an abstract humanity that turns out to reflect just a dominant culture’s time, place, and interests”. Each kind of wokeness now experiences its own oppressed minority like a separate ‘tribe’.

Alarmed by a worldwide swing toward reactionary nationalism, everywhere from Hungary and India, Norway, Israel, India, and perhaps soon the USA, she declares the purpose of her book is not merely to oppose this return to tribalism but to demonstrate that the woke Left is falling into the very same trap by abandoning the Enlightenment ideal of universal rights in favour of defending various sectional interests in highly divisive ways: "The right may be more dangerous, but today’s left has deprived itself of the ideas we need if we hope to resist the lurch to the right. Woke reactions to the October 7 Hamas massacre underline how poor theory can lead to terrible practice”.

Neiman is currently director of the Einstein Forum and previously a professor of philosophy at Yale and Tel Aviv who has written several academic works of moral philosophy, tackling the lessons of the Holocaust and the problem of evil in modern thought.The book reviewed here however is short, readable and tightly focussed on the specific problem of wokeness, which she frames in philosophical terms as the difference between universalism and tribalism. To brutally condense her argument, she believes the Left needs three founding philosophical commitments – to universalism; to a hard distinction between justice and power; and to the possibility of progress – but a return to tribalism erodes all three of these, and woke represents such a return.

The principle of tribalism is that you can only truly connect with those who belong to your own tribe, and need have no deep commitments to anyone else: tribalists of Left and Right both find it easier to ally with their own than with those who remain committed to universalism. For Neiman this rejection stems from a view of power first examined all the way back in Plato’s Republic where the Sophist Thrasymachus claimed that morality is nothing but rules imposed by those in power for their own benefit, that justice is nothing but the advantage of the strongest. This brutal realism, beloved of autocrats and dictators throughout history, waned somewhat during those 800 years when Christianity pretended that power belongs only to God, until in the 18th century the Enlightenment tried to tame it with those ideas of universal liberty, equality and progress that founded (in theory at least) modern liberal democratic nation states.

Neiman blames the current resurrection of sophist scepticism on two thinkers – Michel Foucault and Carl Schmitt – whose ideas proliferated among academic radicals particularly in France and the USA from the 1960s. Foucault was a man of the Left, famed for his criticism of the punitive state, who claimed that power is entwined into the very structure of society, institutions, habits, even language itself. Deconstructing such structures to reveal power relations is hard work, but actually removing them is harder still and most likely impossible, which over several decades has lead to the distortions and absurdities now called woke. Carl Schmitt was a jurist theoretician and active member of the Nazi party who proclaimed the basis of tribalism as distinguishing friends from enemies: he saw conflict as the law of life. An acute observer and analyst of the weaknesses of liberal constitutionalism and cosmopolitanism (but with no desire to cure them) his critiques were nevertheless influential in some Left circles.

In a chapter called ‘Justice and Power’ Neiman takes on the neoliberal claim to be an expression of intrinsic human selfishness, and its purported scientific support from evolutionary biology, while the following chapter ’Progress and Doom’ explores the compulsory optimism that neoliberalism requires of citizens: “Optimism is a refusal to face facts. Hope aims to change them. When the world is really in peril, optimism is obscene”.

She regards woke as a product of, rather than an opponent of neoliberalism: if we’re all individuals competing in the market, we can promote our ‘brands’ more effectively by banding together into tribes. To do that we need to control the way in which we’re described, and the censoring of library books and school curriculums in Republican-governed ‘Red’ states in the USA is merely the mirror image of the Left’s cancellings and no-platformings on college campuses

In an impassioned final chapter Neiman tackles the ill effects of tribalism on current Left politics: “The woke call to decolonize thinking reflects the belief that we will not survive the multiple crises we’ve created unless we change the way we think about them. I agree that we desperately need fundamental changes in thinking, but I’ve urged another direction. For, as I’ve argued, the woke themselves have been colonized by a row of ideologies that properly belong to the right”.

Like Thomas Piketty, she recognises that flight back into identitarian politics is in part a result of disillusion with progressive politics following the collapse of the Soviet Union, but also a product of the rage caused by escalating economic inequality and indifference shown by university-educated ruling elites: “Much of that rage is a reasonable response to conditions that are profoundly unreasonable, though few Americans can imagine any others. That’s because they are missing what other wealthy countries call rights: health care that pays for the drugs needed to treat diseases, sick leave that covers the duration of an illness, paid vacations and parental leave, higher education and childcare. Americans call those things benefits, granted or denied at the will of their employer – a very different concept from the concept of rights”.

This book was largely written before Hamas’s atrocious October 2023 massacre, but Neiman mentions it in her introduction, supporting justice for Palestine as legitimate Left policy but condemning celebrations of the Hamas attack by the postcolonial wing of woke (for whom “Israel has long been located in the Global North, while Palestine belongs to the Global South”) as ‘resistance’ or ‘poetic justice’. As for Netanyahu’s grotesquely brutal policy of retaliation “I will not hazard to guess whether its leader will manage to stay out of jail by undermining Israeli law and waging war against thousands of Palestinians by the time this book is printed”.

The UK Conservative Party briefly believed that ‘anti-wokery’ was the weapon that might turn around their trailing position in the polls, but they were doomed to disappointment as it turned out to be blunt (dulled by post-Boris shenanigans?) and left them routed in the July 4th election. Post-election analysis suggests that Keir Starmer’s prescient decision to simply refuse to engage in culture-war was a prime reason, though it cost him a loss of young voters and several winnable seats with large Muslim communities, and might allow Nigel Farage to pull a Siegfried by reforging and sharpening the weapon. I’m writing this review on the weekend that Joe Biden has stepped down as US presidential candidate in favour of Vice President Kamala Harris (black, female, leftwing) so in November we might be going to learn whether woke can defeat proto-fascism. Neiman’s neat conclusion may be of some comfort: “If you want to establish a dictatorship, your best chance is to convince your fellows that humankind is naturally brutal and needs a strong leader to prevent it from tearing itself to bits. If you want to establish a social democracy, you will magnify every instance of natural cooperation you can find”.