Georgescu-Roegen Research Articles

Production, unemployment and wage flexibility in an ICT-assisted economy: A model

This paper presents a simple macroeconomic model in which a fall in money wages has contractionary effects on output and employment. As it is well known this argument in itself is not novel: the contractionary effect of a rise in the mark-up is a standard result in Kaleckian models of imperfect competition. The new contribution of this paper lies in the fact that the contractionary effect of a money wage decline is consistent with perfect competition and rationality of economic agents. This result depends on an original specification of the production side and the associated implications for pricing. This specification, which embraces many features of modern production (characterized by a massive use of ICT), represents the first attempt to use Georgescu Roegen's contribution to production analysis within a Keynesian macroeconomic framework.

Concepções da economia ecológica: suas relações com a economia dominante e a economia ambiental

O trabalho aborda as relações natureza-sociedade com o propósito de ampliar o leque das teorias socioambientais disponíveis. Faz rápida revisão e avaliação crítica do pensamento econômico tradicional diante da dimensão ambiental do processo econômico. Mostra o esforço de se incorporar o meio ambiente ao modelo econômico e trata da atividade econômica sob a restrição ambiental. Introduz a perspectiva da economia ecológica e sua abordagem transdisciplinar, explorando implicações da visão integradora dela decorrente. Conclui com uma apreciação de tendências no pensamento econômico-ecológico, lembrando nomes que as representam, com ênfase em Nicholas Georgescu-Roegen.

The Influence of Thermodynamic Ideas on Ecological Economics: An Interdisciplinary Critique

The influence of thermodynamics on the emerging transdisciplinary field of 'ecological economics‘ is critically reviewed from an interdisciplinary perspective. It is viewed through the lens provided by the 'bioeconomist' Nicholas Georgescu-Roegen (1906–1994) and his advocacy of 'the Entropy Law' as a determinant of economic scarcity. It is argued that exergy is a more easily understood thermodynamic property than is entropy to represent irreversibilities in complex systems, and that the behaviour of energy and matter are not equally mirrored by thermodynamic laws. Thermodynamic insights as typically employed in ecological economics are simply analogues or metaphors of reality. They should therefore be empirically tested against the real world.

Nicholas Georgescu‐Roegen: His Bioeconomics Approach to Development and Change

Development and ChangeVolume 40, Issue 6 p. 1235-1254 Legacies Nicholas Georgescu-Roegen: His Bioeconomics Approach to Development and Change Kozo Mayumi, Kozo Mayumi graduated from the Graduate School of Engineering at the Department of Applied Mathematics and Physics of Kyoto University. Between 1984 and 1988 he studied bioeconomics at the Department of Economics of Vanderbilt University under Prof. Nicholas Georgescu-Roegen's supervision, and since then has worked in the fields of energy analysis, ecological economics and complex hierarchy theory. Since 1998, he has been involved in organizing a biennial international workshop (Advances in Energy Studies) in which many distinguished scholars have taken part. Mayumi is a professor at the Faculty of Integrated Arts and Sciences, University of Tokushima, Tokushima City 770-8502, Japan (e-mail: mayumi@ias.tokushima-u.ac.jp). He is currently an editorial board member of Ecological Economics, International Journal of Ecological Economics and Statistics and International Journal of Transdisciplinary Research. He has authored or co-authored many books and articles, including Bioeconomics and Sustainability: Essays in Honour of Nicholas Georgescu-Roegen, co-edited with John Gowdy (Edward Elgar, 1999); The Origins of Ecological Economics: The Bioeconomics of Georgescu-Roegen (Routledge, 2001); The Jevons Paradox and the Myth of Resource Efficiency Improvements, with Blake Alcott, Mario Giampietro and John Polimeni (Earthscan, 2008); and The Biofuel Delusion: The Fallacy of Large-Scale Agro-Biofuel Production, with Mario Giampietro (Earthscan, 2009).Search for more papers by this author Kozo Mayumi, Kozo Mayumi graduated from the Graduate School of Engineering at the Department of Applied Mathematics and Physics of Kyoto University. Between 1984 and 1988 he studied bioeconomics at the Department of Economics of Vanderbilt University under Prof. Nicholas Georgescu-Roegen's supervision, and since then has worked in the fields of energy analysis, ecological economics and complex hierarchy theory. Since 1998, he has been involved in organizing a biennial international workshop (Advances in Energy Studies) in which many distinguished scholars have taken part. Mayumi is a professor at the Faculty of Integrated Arts and Sciences, University of Tokushima, Tokushima City 770-8502, Japan (e-mail: mayumi@ias.tokushima-u.ac.jp). He is currently an editorial board member of Ecological Economics, International Journal of Ecological Economics and Statistics and International Journal of Transdisciplinary Research. He has authored or co-authored many books and articles, including Bioeconomics and Sustainability: Essays in Honour of Nicholas Georgescu-Roegen, co-edited with John Gowdy (Edward Elgar, 1999); The Origins of Ecological Economics: The Bioeconomics of Georgescu-Roegen (Routledge, 2001); The Jevons Paradox and the Myth of Resource Efficiency Improvements, with Blake Alcott, Mario Giampietro and John Polimeni (Earthscan, 2008); and The Biofuel Delusion: The Fallacy of Large-Scale Agro-Biofuel Production, with Mario Giampietro (Earthscan, 2009).Search for more papers by this author First published: 15 December 2009 https://doi.org/10.1111/j.1467-7660.2009.01603.xCitations: 13Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Citing Literature Volume40, Issue6FORUM 2009November 2009Pages 1235-1254 RelatedInformation

The Fund-Flow Approach: A Critical Survey

The fund-flow approach to production theory was first proposed by Nicholas Georgescu-Roegen almost half a century ago. Since then, from time to time it has received attention, but, probably because of its analytical complexity and difficulty to deliver sound operational conclusions, it is now almost abandoned. The approach has been also recently criticized for its instrumental assumption of constant efficiency of funds, by emphasizing its limitations in addressing issues related to fixed capital depreciation. The paper critically surveys Georgescu-Roegen's original model, together with the later developments and modifications. It also discusses the recent criticisms. The conclusion is that, despite its drawbacks, the fund-flow approach has a competitive advantage in the actual description of production as a process unfolding in time and entailing a temporal coordination between different elements. In this respect, it seems that most of its fruitful applications have yet to come.

Time horizons and electricity futures: An application of Nicholas Georgescu-Roegen's general theory of economic production

This paper reports theoretical economic production work and uses electricity futures trading to illustrate its argument. The focus is relationships between time, production and tradition both in Nicholas Georgescu-Roegen's analytical representation of the production process (i.e., flow/fund model) and in his dialectical scheme dealing with the evolutionary changes in the economic process. Our main arguments are (1) the flow/fund model is designed to be employed in conjunction with attention to how the boundaries of a given process are determined and (2) process boundaries are dialectical distinctions—between process and not-process—that are strongly related to time and tradition. We propose that Georgescu-Roegen's The Entropy Law and the Economic Process is best understood as the elaboration of a general theory of economic production and we developed two conceptual tools (time and meta-funds), both of which are related to the dialectical distinction between process and not-process, which we use to operationalise this general theory. Finally, we demonstrate that, although trading in electricity futures is surprising if one uses a stock/flow vs services distinction (because electricity supply is classed as a service) it appears perfectly logical under Georgescu-Roegen's general theory: shortening time horizons, combined with a shift in the relationship between raw fuel supplies and power production procedures, lead to a shift in the status of electricity supply, from fund to flow.

Aggregation and Desaggregation of Information as an Adaptive Task

(Received January 19, 2007; In final form January 28, 2008) Purpose - The paper aims at supporting innovation into Philosophy of Science approach on the humankind long-termtask of aggregation and desaggregation of information. This is a systemic task, involving human ideas and ITC by boosting synergy, non-entropy, and ephemeral efficiency properties at multiple echelons. The paper is dedicated to a deeper understanding on the Information Fusion – as part of a dual universal task; into this context the paper proposes a Philosophy of Science approach on Dempster Sheffer Theory (DST ), Dezert-Smarandache Theory (DSmT ), Interactive Modeling (IM), Structural-Phenomenological Modeling (S-PM ). Basic sub-goals: a) Shrinking the gap between the humanist perspective and the technologist one. b) Promoting an equilibrated anthropocentric & technocentric perspective by starting with stimuli fromthe real world expressed by (old and new) ideas regarding the (re)construction of a World/e-World balance. c) Illustrating a positive e-World response by sketching innovative, synergy-based, interactive models, considering metaphors linked to those ideas. Design/methodology/approach - A general framework is suggested and an instance model is presented, that of Interactive Modeling approach. To maximise synergy, to minimise entropy, and to prolong the ephemeral efficiency - all their sources are considered. The approach is based on real-world “stimulus-ideas” (here, the shift from algorithmic towards sub-symbolic reasoning) and “metaphor-prompted e-world (IT-)responses”. Findings - A) Regarding the framework : a) Based on semantic transfer, metaphors are an encouraging path to get closer humanists and technologists, i.e., real world and e-world. b) Corollary: heavily metaphor-based research domains – as artificial life and intelligence – are valuable interdisciplinary “[John von Neumann & Nicholas Georgescu Roegen & John K. Galbraith, and Mihailo Mesarovic & Herbert Simon]’s niches”. c) Even if the approach proposed does not ensure, transdisciplinarity, it provides a workable framework and pays tribute to “systems thinking”. B) Regarding the model: the 2005 research stage of DSmT is described in (Smarandache, and Dezert, 2005); while this paper type of approach in (Bulz, 2005) – but, here, co-referring DST , DSmT , IM , S-PM.. Research limitations/implications - Since no undertaking – particularly when it involves a rather general framework – can be commented upon in an apodictic manner after its first application, the assertions stated above have a variable degree of plausibility and should be amended after more applications. Keywords : (e-)World, Metaphor, Human-machine systems, Synergy, Non-entropy, Ephemeral efficiency

Stefan Baumgärtner, Malte Faber and Johannes Schiller: Joint Production and Responsibility in Ecological Economics. On the Foundations of Environmental Policy

Evolutionary and ecological economics share a similar history. Discontent with standard economics was a major impetus in the emergence of both fields. In the case of ecological economics, understanding and overcoming the limits of standard economic tools in addressing environmental issues was most important. Both fields are moreover characterized by methodological plurality, including an openness to draw on concepts and findings imported from other disciplines. Neither has developed a canonical approach, but the diversity in methods has been sustained. Evolutionary and ecological economics also share common interests. Most notably, both are concerned with long-term development, and with the interrelations between the natural and the socio-economic spheres. These parallels make it worthwhile for evolutionary economists to keep track of advances and discussions in ecological economics. For more than 20 years, Malte Faber, professor emeritus at the University of Heidelberg, has been a leading theorist of ecological economics. In contrast to many other ecological economists (but not unlike Nicholas Georgescu-Roegen, the towering pioneer of that field), Faber came from economic theory, specifically Austrian capital theory, and he has always maintained a close relationship to it. At the same time, he has engaged in interdisciplinary research of an unusual scope. His collaborators and students include researchers trained in physics, chemistry, and engineering, as well as philosophy and management. Based on their diverse backgrounds, Faber and his collaborators have integrated ideas from disciplines as dissimilar as thermodynamics and ethics into theoretical advances that are solidly grounded in economics and build on accepted economic concepts. The result is a

Global Justice and the Distribution of Natural Resources

What should a political theorist say about the justice of the global distribution of natural resources? One issue is whether principles of distributive justice should be applied globally, and this has been debated between nationalists and cosmopolitans. A second, though, is how the category of ‘natural resources' should be conceived in relation to other distributable goods. This has not adequately been addressed even by theorists of global justice who expressly focus on natural resources. In particular, neither Charles Beitz's argument for a natural resources redistribution principle nor David Miller's argument against works with a satisfactory account of how the physical distribution of resources relates to the distribution of their economic value. A more satisfactory account can be developed from the perspective of ecological economics as inspired by Nicholas Georgescu-Roegen. From this perspective, global inequalities in the command of natural resources can be viewed with the clarity that a normative theory of their justice requires. If natural resources are re-conceptualised in terms of ‘ecological space’, Beitz's argument can be recast and vindicated. The re-conceptualisation is necessary to overcome the problems with the original version, as is shown by reference to the existing alternative formulations of Hillel Steiner and Thomas Pogge.

Ordre lexicographique, besoins et préférences dans l'œuvre de Georgescu-Roegen

Résumé Dans son article "Choice, Expectation and Measurability", Nicholas Goergescu-Roegen mène une attaque en règle contre la théorie de l’utilité en rejetant l’un de ses principe fondateurs : l’axiome d’Archimède. Son argumentaire s’appuie pour l’essentiel sur la notion d’ordre lexicographique. Mais une fois son attaque menée, il n’a pas cherché à refonder la théorie des préférences en autorisant ce type de structure d’ordre. L’objectif de ce travail est de reprendre l’argumentaire de Georgescu Roegen à l’encontre de la théorie de l’utilité afin non seulement de comprendre pourquoi il n’a pas su tirer parti de la littérature mathématique sur les structures ordonnées mais aussi de voir où l’aurait mené l’utilisation de cette technique.

O debate dos economistas sobre a sustentabilidade: uma avaliação sob a ótica da análise do processo produtivo de Georgescu-Roegen

O artigo avalia o debate que a economia do meio ambiente vem travando em torno do conceito de desenvolvimento sustentável, tendo por base contribuições de Nicholas Georgecu-Roegen. Este autor se notabilizou por ter trazido para a análise econômica o conceito de entropia, hoje peça fundamental da estrutura conceitual da economia ecológica. Entretanto, não é este o aspecto da obra de Georgecu-Roegen aqui focalizado. Ressaltam-se, ao invés, contribuições para a discussão derivadas de sua análise do processo produtivo. Procura-se mostrar, de forma especial, que a incorporação, pela economia do meio ambiente, da distinção, sugerida pelo autor, entre a categoria de capital natural de estoque e a de fundo de serviços ambientais básicos, forçaria as visões sobre a sustentabilidade a se confrontarem com aspectos fundamentais da inter-relação entre o sistema econômico e o meio ambiente, que hoje tendem a estar ocultos nas hipóteses simplificadoras da análise convencional da sustentabilidade.

Energy, money, and pollution

This paper explores general equilibrium consumption choices and interest rate determination in a deterministic two-period model in which the production side explicitly describes the thermodynamic process unavoidably connected with production, as argued by Georgescu Roegen. A simple energy based production process is modeled, which is not in a stationary state. The resulting production function is time dependent. In neoclassical general equilibrium the thermodynamic implication of the production process, i.e., the production of waste, will not be taken into account by decision making agents. For welfare optimality, the resulting externality needs to be corrected by a social planner, or through the use of environmental related taxation. However, it is shown that imposing energy as a medium of exchange (money) in the same economy makes agents “energy conscious” and decreases the externality associated with entropic waste through a market mechanism, without the need for intervention. In the limit case in which production occurs in thermodynamic equilibrium, no entropic waste is produced, and the model collapses to the nested neoclassical model. A contribution of the proposed approach is the determination of energy (money) prices in general equilibrium. Despite the fact that energy does not enter the agents' utility function, and therefore has no direct value, money prices and interest rate can be fully characterized in the model due precisely to the production technology adopted. In this competitive equilibrium the market interest rate will be greater than the real interest rate. The change in the numeraire and medium of exchange used affects the economy due to the non stationarity of the production process, but has no effect in the limit case in which the productive process reaches a steady state.

Energy, Money and Pollution

This paper explores general equilibrium consumption choices and interest rate determination in a two-period model in which the production side explicitly describes the thermodynamic process unavoidably connected with production, as argued by Georgescu Roegen. A simple energy based production process is modeled, which is not in a stationary state. The resulting production function is time dependent. In neoclassical general equilibrium the thermodynamic implication of the production process, i.e. the production of waste, will not be taken into account by decision making agents. For welfare optimality, the resulting externality need be corrected by a social planner,or through the use of environmental related taxation. However, it is shown that imposing in the same economy energy as a medium of exchange (money), makes agents energy conscious and decreases the externality associated with entropic waste production through a market mechanism, without the need for the intervention. In the limit case in which production occurs in thermodynamic equilibrium, no entropic waste is produced, and the model collapses to the nested neoclassical model. A contribution of the proposed approach is the determination of energy (money) prices in general equilibrium. Despite the fact that energy does not enter the agents utility function, and therefore has no direct value, money prices and interest rate can be fully characterized in the model due precisely to the production technology adopted. The change in the numeraire and medium of exchange performed affects the economy due to the non stationarity of the production process, but has no effect in the limit case in which the productive process reaches steady state.

Fund–flow versus flow–flow in production theory: Reflections on Georgescu-Roegen’s contribution

The paper discusses Nicholas Georgescu-Roegen’s contribution to production theory, comparing it with the contributions of John von Neumann and Piero Sraffa and emphasizing the problem of the choice of technique. It is shown that Georgescu-Roegen’s fund–flow approach, in which fixed capital is taken to be an “immutable agent”, can be misleading and cannot address issues that are easily handled by the alternative flow–flow approach that reduces fixed capital to circulating within a joint-products framework and allows adequate treatment of the wear and tear of machines as well as the problem of capital utilization.

Nicholas Georgescu-Roegen about himself

Nicholas Georgescu-Roegen about himself

When, where, and by how much do biophysical limits constrain the economic process?: A survey of Nicholas Georgescu-Roegen's contribution to ecological economics

When, where, and by how much do biophysical limits constrain the economic process?: A survey of Nicholas Georgescu-Roegen's contribution to ecological economics

The Legacy of Hicks: His Contributions to Economic Analysis.

Sir John Hicks made a major contribution to almost every aspect of modern economic theory. His diverse and inventive work has left a huge impression on the discipline. Contributors: Christopher Bliss, Oxford University; John S. Chipman, University of Minnesota; Nicholas Georgescu-Roegen, Vanderbilt University; Richard Goodwin, University of Siena; Frank H. Hahn, Cambridge University; John D. Hey, University of York; Charles M. Kennedy, University of Kent; David Laidler, University of Western Ontario; Axel Leijonhufvud, University of California, Los Angeles; Robin C.O. Matthews, Cambridge University; Michio Morishima, London School of Economics; Kurt W. Rothschild, Vienna; Robin Rowley, McGill University; Roberto Scazzieri, University of Bologna.

Georgescu-Roegen's defense of classical thermodynamics revisited

Nicholas Georgescu-Roegen's criticisms, added to those of physicists and philosophers, result in a definitive refutation of Boltzmann's claim that his H-theorem derives the Second Law of Thermodynamics solely from Newtonian Mechanics. Some authors using Boltzmann's Statistical Mechanics go so far as to claim that perpetual motion machines are feasible in principle; this is also incorrect. Modern approaches by Ilya Prigogine and by the “Astrophysical School” to build thermodynamics on a basis that avoids Georgescu-Roegen's objections are surveyed. These conclusions have both epistemological and technological importance for economics; this paper emphasizes the former. The epistemological argument is: (1) The entropy law is an evolutionary law. (2) Modern neoclassical economics is arithmomorphic. (3) Arithmomorphic laws cannot capture evolutionary changes. (4) Hence neoclassical economics cannot incorporate the entropy law's implications for the economic process. (5) If one can show that modern physicists use evolutionary laws despite their non-arithmomorphic nature, then maybe (6) economists will become accepting of evolutionary laws. (7) This would be good because the entropy law, which is evolutionary (point 1), has important implications for economics. This paper primarily treats the most unfamiliar point for non-physicists, point 5.

On Nicholas Georgescu-Roegen's contributions to economics: an obituary essay

On Nicholas Georgescu-Roegen's contributions to economics: an obituary essay

Eminent Economists: Their Life Philosophies.

Introduction The passion for research Mauric Allais 'I Know a Hawk from a Handsaw' Kenneth J. Arrow On my attitudes: sociopolitical and methodological William J. Baumol Recollections and reflections of a comparativist Abram Bergson From chemistry to economics and beyond Kenneth E. Boulding My quest for economic knowledge Karl Brunner From the inside looking out James M. Buchanan Random walk and life philosophy Gerard Debreu How I tried to become an economist Evsey D. Domar Nicholas Georgescu-Roegen about himself Nicholas Georgescu-Roegen Autobiographical notes with reflections Frank Hahn My working philosophy Charles P. Kindleberger My professional life philosophy L. R. Klein Social science, ethics, and the role of the public sector Richard A. Musgrave My apprenticeship as an economist Austin Robinson Reflections on political economy: past, present, and future W. W. Rostow My life philosophy: policy credos and working ways Paul A. Samuelson My search for welfare Tibor Scitovsky Living in interdisciplinary space Herbert A. Simon Notes on copying Robert M. Solow Solving the most urgent problems first Jan Tinbergen Scientific humanism as an ideal Shigeto Tsuru Index.