Abstract
This paper, using Algorithmic Information Theory (AIT), argues that once energy resources are considered, an economy, like an ecology, requires continuous energy to be sustained in a homeostatic state away from the decayed state of its (local) thermodynamic equilibrium. AIT identifies how economic actions and natural laws create an ordered economy through what is seen as computations on a real world Universal Turing Machine (UTM) that can be simulated to within a constant on a laboratory UTM. The shortest, appropriately coded, programme to do this defines the system’s information or algorithmic entropy. The computational behaviour of many generations of primitive economic agents can create a more ordered and advanced economy, able to be specified by a relatively short algorithm. The approach allows information flows to be tracked in real-world computational processes where instructions carried in stored energy create order while ejecting disorder. Selection processes implement the Maximum Power Principle while the economy trends towards Maximum Entropy Production, as tools amplify human labour and interconnections create energy efficiency. The approach provides insights into how an advanced economy is a more ordered economy, and tools to investigate the concerns of the Bioeconomists over long term economic survival.
Highlights
How can an economy the size of the United States of America support 325 million people, when such a population level would be impossible for simple hunter-gatherer communities ranging over the same territory? Algorithmic Information Theory (AIT) addresses this question by providing a framework to identify the thermodynamic requirements for a complex system such as an economy to be maintained far from thermodynamic equilibrium
Entropy 2018, 20, 228 a developed economy, as in the United States, is a highly ordered interconnected set of structures, having low algorithmic entropy, and which is able to be sustained distant from it local thermodynamic equilibrium, by using stored energy and ejecting high entropy waste
In contrast to the neoclassical understanding of economic equilibrium where economic forces balance, once energy is considered it is seen that an economy is far from its local thermodynamic equilibrium
Summary
Algorithmic Information Theory (AIT) addresses this question by providing a framework to identify the thermodynamic requirements for a complex system such as an economy to be maintained far from thermodynamic equilibrium From this perspective, a living system such as an economy, can be understood as far-from-equilibrium, real-world, computational system existing in a highly ordered set of states. Entropy 2018, 20, 228 a developed economy, as in the United States, is a highly ordered interconnected set of structures, having low algorithmic entropy, and which is able to be sustained distant from it local thermodynamic equilibrium, by using stored energy and ejecting high entropy waste. Know-how that exists in human brains as computational routines organises the information embodied in the external resources, levering off the genetic instructions to create more ordered structures While such an economy becomes further from equilibrium, it becomes more dependent on resource inputs and must eject more waste. The “degree of order” of such a system is the difference in the number of bits between the algorithmic description of a low entropy or ordered far-from-equilibrium state, and the thermodynamic equilibrium state
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
