Georgescu-Roegen Research Articles

Slavcho Zagorov (1898–1970), A forgotten pioneer of energy and ecological economics

This article aims to rediscover a relatively unknown author to the general public, Slavcho Zagorov, and to revive his ideas. Zagorov was a Bulgarian economist and statistician whose main works date back to 1954 and are mainly devoted to the concept of energy flows in the economy and human metabolism explained through the prism of thermodynamics. His work and career are reminiscent of another Balkan economist, Nicholas Georgescu-Roegen. We first present Zagorov's theoretical work on the importance of energy in economic activity and secondly on the measurement of national income and productivity through energy. Thirdly, we show the relation he establishes between energy and utility. Finally, we discuss his texts in relation to his professional and personal trajectory and point out some preliminary elements of comparison with Georgescu-Roegen's work.

Ecological economics as the science of sustainability and transformation: Integrating entropy, sustainable scale, and justice

Ecological economics, developed in the late 1980s, came to be known as the multi- and transdisciplinary science of sustainability. Since that time, it has blended basic and applied research with the intention of both informing and bringing change to environmental policy, governance, and society. However, many conventional economists have questioned its originality and contributions. This paper begins by clarifying the foundational perspectives of ecological economics that it engages an economy embedded in both real and limited ecosystems as well as socially constructed power relations. Herman Daly, a founder of the field, expanded on Nicholas Georgescu-Roegen’s entropy economics by focusing on a quantifiable sustainable scale of the economy and achieving justice in the control and distribution of economic benefits. He called for both quantitative analyses of economic scale and discursive approaches to a just distribution. The paper then discusses how the terms entropy, scale, and justice are used and interact in the literature, illustrated by some of the key debates in the field involving the Ecological Footprint, substitutability of natural and manufactured capital, and the growth—“agrowth”—degrowth debate. The debates also illustrate the potential for the field to influence policy. Ecological economics as the science of both sustainability and transformation can deploy numerous concepts and tools to provide insights on how to illuminate and solve some of the most pressing problems of the Anthropocene.

Relationship Between Economic Growth and Environmental Degradation in Peru, Period 1990-2019

Objective: The objective of this research is to analyze the relationship between economic growth and environmental degradation through a regression model for the Peruvian case, during the period 1990-2019, based on Georgescu Roegen's Bioeconomy; who explains that, in environmental terms, economic growth seems to be more of a problem than a solution. Method: The quantitative approach was considered, of a non-experimental type, with a descriptive and correlational design; where secondary source information from the World Bank database was used. Results: According to the results obtained, it is concluded that the variable with the most relationship or that best explains economic growth is energy consumption, followed by CO2 emissions; indicators of environmental degradation explain 24% of economic growth, being a model without problems of heteroscedasticity or autocorrelation; the level of individual significance in all cases is less than 5% and according to the proposed model it is necessary to; if CO2 emissions increase, PBI per capita would increase by 19% and if energy consumption increases, PIB per capita would increase by 20%. Conclusions: Finally, it was possible to contrast the hypothesis that there is a direct and significant relationship between economic growth and environmental degradation.

КЪМ ПРЕОТКРИВАНЕ НА ЕНЕРГЕТИЧНАТА И ЕКОЛОГИЧНАТА ИКОНОМИЧЕСКА ТЕОРИЯ НА СЛАВЧО ЗАГОРОВ (1898 – 1970)

The purpose of this article is to present the pioneering works in the field of environmental and energy economics by the Bulgarian economist Slavcho Zagorov (1898–1970) during the early 1950s, when Zagorov was in emigration. Zagorov is known to the Bulgarian reader as an economist and policy maker in the years between the two world wars. It is little known, however, that Zagorov was one of the first (his publications chronologically predate those of Nicolas Georgescu Roegen by about a decade) to present the concept of energy flow in the economy and human metabolism, explained through the prism of thermodynamics. Criticizing the traditional economic approach to national income from the point of view of "value", Zagorov developed a new energetic approach to national income and productivity. According to him, national income is a "movement of energy", which he calculates in terms of primary energy sources. The Bulgarian economist conducted a number of empirical studies on energy balances in the Danube Region, including in Bulgaria.

Otro fin del mundo es posible. Nicholas Georgescu-Roegen, de la bioeconomía a la arquitectura

For many, the degrowth problem is the problem of time management, not just resources. Reflecting upon the work of the Romanian-born economist Nicholas Georgescu-Roegen, this article applies the theory of the irreversible quality of (natural) resources used for economic purposes to architecture. The discussion helps us to think about whether architecture could, given its material quality, extend the life or death of the world or whether we are subject to the - very contemporary - brevity of its extravagance.

An emigrant economist in the tropics: Nicholas Georgescu-Roegen on Brazilian inflation and development

AbstractNicholas Georgescu-Roegen was a ‘travelling economist’ in a double sense: after emigrating from Romania in the late 1940s, he became involved with the economic problems of the developing world through his engagement in Vanderbilt University’s Graduate Program in Economic Development. One of his missions brought him multiple times to Brazil between the mid-1960s and mid-1970s, leading to an article on the complicated dynamics between inflation and economic growth in developing countries – his sole incursion into the field of monetary economics. In this paper, we will set Georgescu-Roegen’s contribution against the background of the lively debates about inflation taking place in Brazil during the 1960s. Relatedly, we will show how he anticipated important aspects of later arguments about the perverse distributive effects of inflation. Finally, we will discuss why Georgescu-Roegen’s arguments had only limited influence, despite his prestige and connections within the Brazilian community of economists.

How should We Operationalize Bioeconomics for Strong Sustainability? Toward a Transdisciplinary and Systemic Approach in Line with a Georgescu-Roegen Epistemology

Strong sustainability has not been truly operationalized despite the fact that it is one of the major challenges facing society today. Thus, this work proposes a way to rediscover the bioeconomic epistemology of Nicholas Georgescu-Roegen as an approach toward informing strong sustainability operationalizations. Through a literature review, this article demonstrates how various bioeconomic studies (stock-flow or fund-flow models, multi-scale integrated analysis of societal and ecosystem metabolism (MuSIASEM), mainstream bioeconomy, etc.) fail to operationalize strong sustainability as it remains trapped either in normalization or marginalization. To overcome such limitations, a systemic and transdisciplinary approach of bioeconomic epistemology is proposed to fundamentally redefine the logic of development as a qualitative change driven by immaterial objectives that are defined by the main stakeholders.JEL Codes: O440, Q570.

How should We Operationalize Bioeconomics for Strong Sustainability? Toward a Transdisciplinary and Systemic Approach in Line with a Georgescu-Roegen Epistemology

Strong sustainability has not been truly operationalized despite the fact that it is one of the major challenges facing society today. Thus, this work proposes a way to rediscover the bioeconomic epistemology of Nicholas Georgescu-Roegen as an approach toward informing strong sustainability operationalizations. Through a literature review, this article demonstrates how various bioeconomic studies (stock-flow or fund-flow models, multi-scale integrated analysis of societal and ecosystem metabolism (MuSIASEM), mainstream bioeconomy, etc.) fail to operationalize strong sustainability as it remains trapped either in normalization or marginalization. To overcome such limitations, a systemic and transdisciplinary approach of bioeconomic epistemology is proposed to fundamentally redefine the logic of development as a qualitative change driven by immaterial objectives that are defined by the main stakeholders.JEL Codes: O440, Q570.

NICHOLAS GEORGESCU-ROEGEN, DEVELOPMENT ECONOMIST

Accounts of Nicholas Georgescu-Roegen’s career usually focus on his pioneer contributions to mathematical economics during the 1930s and his later conversion to a critical approach to economic theory anchored on the entropy law. These disparate moments, however, were connected by Georgescu-Roegen’s strong attraction to the study of problems afflicting less developed societies. This began with his work on the agrarian economy of his native Romania, in the late 1940s, under the auspices of Harvard’s Russian Research Center. Thenceforth, he embarked on a journey that spawned his early interest in Leontief-type linear models, an extended tour of Southeast Asia commissioned by Vanderbilt University’s Graduate Program in Economic Development, and several visits to Brazil during the 1960s. The paper highlights these lesser-known aspects of Georgescu-Roegen’s trajectory, examining how he built on neo-populist writings from the early twentieth century to construct an alternative to the mainstream emphasis on industrialization policies.

Joan Robinson on Environment and Ecology

The last works of Joan Robinson showed increasing preoccupation with ecological and environmental issues. Some of these preoccupations were already present in some of her main earlier works, but as she approached old age, the discussion of these questions became more frequent, as well as of other issues such as the arms race and the nuclear threat to the human race. However, Robinson had not dealt with ecological and environmental questions by means of a systematic approach. This article evaluates Robinson’s views on ecology and environment not only because this is a gap in the literature on her work, but mainly because some of Robinson’s insights on these questions are yet to be fully developed. Therefore, this article mixes the history of economic thought with political economy, Robinson’s perspectives being summarized and then analyzed in light of the ecological critique as established by Nicholas Georgescu-Roegen. The article shows that despite the fact that Robinson could have developed more profoundly the logical consequences of some of her core contributions to economic theory to a broader ecological critique, many of her theoretical perspectives overlap with Georgescu-Roegen’s ecological economics, being able to contribute to a heterodox critique of the neoclassical approach.

Towards a Philosophy of a Bio-Based Economy: A Levinassian Perspective on the Relations between Economic and Ecological Systems

This paper investigates the fundamental idea at stake in current bioeconomies such as Europe's Bio-Based Economy (BBE). We argue that basing an economy upon ecology is an ambivalent effort, causing confusion and inconsistencies, and that the dominant framing of the damaged biosphere as a market-failure in bioeconomies such as the BBE is problematic. To counter this dominant narrative, we present alternative conceptualisations of bio-economies and indicate which concepts are overlooked. We highlight the specific contradictions and discrepancies in the relation between economy and ecology, and then work towards outlining a genuine and consistent conceptualisation of the BBE. The philosophical perspective of Emmanuel Levinas is employed to develop a more profound understanding of the tensions at stake; Levinas’ work is compared with that of Nicholas Georgescu-Roegen's work on bioeconomics, and found to be of complementary value. Our hypothesis is that, rather than the impossible, absolute amalgamation of economy and ecology striven for today, a principal heterogeneity between humankind and nature must be acknowledged if a bioeconomy that truly operates within the carrying capacity of planet Earth is to be achieved.

Models as ‘analytical similes’: on Nicholas Georgescu-Roegen's contribution to economic methodology

ABSTRACT This paper investigates the methodology of Nicholas Georgescu-Roegen and his conception of economic models as analytical similes. His approach has received little attention from mathematical economists and economic methodologists. Thus, the purpose of this paper is to characterize his perspective and situate it in the broader spectrum of economic methodologies. It shows that Georgescu-Roegen criticized the lack of significance of certain economic models and attempted to give philosophical foundations to this criticism. He also provided a set of methodological principles that are illustrated by his practice of economic modeling. This perspective placed Georgescu-Roegen in opposition to the axiomatic approach that dominated postwar economics, and in line with economists such as Marshall, Wicksell, and Keynes, on the limited and subordinate role of mathematics in the discipline. Overall, the paper shows that Georgescu-Roegen's methodological contribution is still relevant to contemporary debates on the status of economic models.

Some notes on Gossen’s “submerged and forgotten” approach to consumption and time

Hermann Heinrich Gossen has traditionally been considered a forerunner of the neoclassical theory of demand. With the long-awaited publication, in 1983, of the English translation of Gossen’s book, its editor, Nicholas Georgescu-Roegen, saw in The Laws of Human Relations and the Rules of Human Action Derived Therefrom the roots of a wholly different theory of consumption choices than that generally accepted, one in which the flow of time plays a non-trivial role. However, Georgescu-Roegen’s interpretation did not object to Gossen being a precursor of the subjective theory of value. The paper argues, with evidence from the works of Gossen, Jevons, Menger and Walras, that, contrary to this interpretation, the theoretical connection between Gossen and the marginalist school is unwarranted in that Gossen, contrary to the early marginalists, was not concerned with adding to the theory of exchange the demand side which the classical British tradition had neglected. In fact, Jevons and Walras, concerned with building a demand-and-supply theory of price and with their relative merits as discoverers of the new approach, “elected” Gossen as their common precursor, despite the fact that Gossen explicitly rejected the idea that his laws of pleasure could bear any implication for the theory of exchage.

Some historiographical tools for the study of intellectual legacies

Intellectual legacies are part of historians' concerns, when they study the evolution of ideas. There are, however, no guidelines to help characterize the reception of intellectual legacies. This article provides preliminary tools to fill this gap, with a typology (faithful, formal, substantial legacies), and with two criteria to assess the conformity between the heir's and her inspirer's proposals. The objective is not to judge the legitimacy of this or that reception, but to facilitate its characterization, for a better understanding of the transmission of ideas. One case study from the history of economic thought, Nicholas Georgescu-Roegen's bioeconomics and its legacies, is provided to illustrate the operability of the toolbox.

From Thermodynamic Entropy to Knowledge Entropy

Abstract The purpose of this paper is to present the evolution of the concept of entropy from engineering to knowledge management, going through information theory, linguistic entropy, and economic entropy. The concept of entropy was introduced by Rudolf Clausius in thermodynamics in 1865 as a measure of heat transfer between two solid bodies which have different temperatures. As a natural phenomenon, heat flows from the body with a higher temperature toward the body with a lower temperature. However, Rudolf Clausius defined only the change in entropy of the system and not its absolute entropy. Ludwig Boltzmann defined later the absolute entropy by studying the gas molecules behavior in a thermal field. The computational formula defined by Boltzmann relates the microstates of a thermal system with its macrostates. The more uniform the probability distribution of the microstates is the higher the entropy is. The second law of thermodynamics says that in open systems, when there is no intervention from outside, the entropy of the system increases continuously. The concept of entropy proved to be very powerful, fact for which many researchers tried to extend its semantic area and the application domain. In 1948, Claude E. Shannon introduced the concept of information entropy, having the same computational formula as that defined by Boltzmann, but with a different interpretation. This concept solved many engineering communications problems and is used extensively in information theory. Nicholas Georgescu-Roegen used the concept of entropy and the second law of thermodynamics in economics and business. Today, many researchers in economics use the concept of entropy for analyzing different phenomena. The present paper explores the possibility of using the concept of knowledge entropy in knowledge management.

La crisis del estilo histórico de razonamiento económico:Joseph A. Schumpeter, Nicholas Georgescu-Roegen, y Paul A. Samuelson

En este artículo abordaré el declive del estilo histórico de razonamiento económico en relación con las obras de Joseph A. Schumpeter, Nicholas Georgescu-Roegen y Paul A. Samuelson. Argumentaré dos tesis básicas. La primera afirma que la teoría schumpeteriana de los ciclos de negocios es una respuesta en pespectiva histórica a la comprensión de las crisis económicas y, en consecuencia, cabe ser concebida como una instancia del estilo histórico de razonamiento económico. La segunda sostiene que el declive de este estilo histórico-económico estuvo asociado a la derrota intelectual de Schumpeter frente al keynesianismo. En la medida en que la teoría schumpeteriana de los ciclos de negocios y del empresario innovador requerían de la historia económica como el lugar último de fundamentación, su descrédito llevó aparejada la crisis del estilo histórico de razonamiento económico. Esta quiebra puso de relieve el conflicto de racionalidades económicas durante la segunda mitad del siglo XX y restó legitimidad epistemológica a la historia de la economía en beneficio de los análisis formales de tipo sincrónico.

Exploring Knowledge Entropy in Organizations

Abstract The purpose of this paper is to explore the knowledge entropy processes within organizations and how they are reflected in the knowledge management and organizational intellectual capital. Entropy is a very powerful concept, which can be found today in almost any branch of science and technology. It was introduced by Rudolf Clausius in 1865 in Thermodynamics, then used in the communication theory by Claude Shannon, and expanded by Nicholas Georgescu-Roegen in economics. However, dues to its extensive use in so many different research domains, the concept of entropy became fuzzy and sometimes misleading in applications. Also, its statistical formulations based on the Boltzmann theory made the entropy understanding rather difficult and its interpretations on the edge of coherence. Knowledge entropy is an extension of information entropy and used within the framework of knowledge management. Our conceptual analysis aims to shed light on the appropriate use of knowledge entropy and its potential in knowledge management research and practice. Since knowledge entropy is associated to all transformational processes in knowledge creation, knowledge sharing, knowledge acquisition, and knowledge loss, we may say that knowledge management can be interpreted as the process of managing knowledge entropy within organizations.

Producing the ecological economy: A study in developing fiduciary principles supporting the application of flow-fund consistent investment criteria for sovereign wealth funds

In the current financial climate, there is an opportunity for surplus capital to incentivize ecological economic production. Markets and financial products created in response to this surplus include investments in the maintenance of biologically viable natural systems and the development of sustainability transformation technologies. In this paper we critically examine their potential for supporting conservation and socio-ecological transformation. Using Nicholas Georgescu-Roegen's flow-fund theory, we take sovereign wealth fund (SWF) investments as a case in point and ask: according to what principles might it be possible to ensure that SWF investments are directed toward producing new economic processes compatible with the transformation to an ecological economy? Employing the flow-fund theory concepts of economic Anschauung and process-funds, we specify a flow-fund fiduciary responsibility associated with ensuring that an economic process is designed so that its final cause, or purpose, can be realized sustainably and sustained over time. We illustrate the generalizability of these fiduciary criteria by applying them to the two very different potential target investments: mangrove forest recuperation and conservation and the roll-out of the electric vehicle transport sector. We conclude with reflections on the general applicability of this approach and recommendations for further research.

A Phillips Curve for the Poor: The Development of the Sawtooth Wages Model of Inflation

This paper aims to contribute to the literature on the intellectual history of the economics discipline by delving into the history of the the sawtooth wages model, namely: the behavior of periodically-adjusted fixed nominal wages under persistent inflationary conditions. Ranging from the immediate post-War years to the end of the 1960s, our narrative reveals that, prior to Nicholas Kaldor’s statement of the sawtooth model of real wages, other contributions sprung from various traditions. To this effect, we underscore this model’s ancestor in the Operations Research research program and its the early neoclassical version by Bent Hansen (1951). Later analogous representations by Celso Furtado and Nicholas Georgescu-Roegen maintain the model’s legacy until it is fully rehabilitated as workhorse for theoretical and policy analysis, in the 1980s, as the inertial inflation hypothesis gains terrain in the second round of the monetarist-structuralist debate on economic stabilization in Latin America.

An Emigrant Economist in the Tropics: Nicholas Georgescu-Roegen on Brazilian Inflation and Development

After his escape from communist Romania in the late 1940s, Nicholas Georgescu-Roegen used to describe himself as an “emigrant from a developing country”. Through his professional engagements with Vanderbilt University, he also came to visit many other parts of the developing world. One of his missions brought him multiple times to Brazil between the mid-1960s and mid-1970s, an experience which led him to write an article on the complicated dynamics between inflation and economic growth in developing countries – first published in Portuguese in 1968, then in English in 1970. In this paper, we will set Georgescu-Roegen’s contribution against the background of the lively debates on inflation taking place in Brazil at the time, stressing how his analysis departed from other approaches. Relatedly, we will show how he anticipated aspects of later controversies regarding the perverse distributive effects of inflation. Finally, we will explore some of the reasons why Georgescu-Roegen’s arguments had only limited influence over other scholars then working on inflation, despite his prestige and very strong connections with the Brazilian community of economists.