Do you have any idea what this title means? Did you ever hear of Entropy before? It is a common concept in science and has almost universal application, so why not economics? That is what this blog is about. After a little research on this subject, I find that I am "not" its inventor, but the fact that I have come to the same place all by myself puts me into a special class.
A brief definition of Entropy is that energy tends to balance out. High temperatures tend to go down over time. Tall things tend to fall down. Tall mountains tend to wear down. Sharp things tend to dull over time. These are some simple ideas that demonstrate the concept of Entropy. Here is another concept. Energy is only available if there is a path for the energy to flow from a place of high energy to a place of lower energy. Example, water on a mountain top only has energy available if there is a place at lower elevation for the water to flow too. A hydro generator on a dam is a good example. You don't see hydro generators located on calm lakes.
Now, how does this apply to economics? Wealth is a relative thing too. Wealth is like water at the top of a mountain and poverty is like water in a lower elevation calm lake. Over time all the water eventually ends up down in the ocean without any more energy or wealth. If there was no energy from the Sun, the whole process of wealth creation would end. For the human race there is a source of energy like the Sun and it is the mental inventiveness of the human mind.
A brief definition of Entropy is that energy tends to balance out. High temperatures tend to go down over time. Tall things tend to fall down. Tall mountains tend to wear down. Sharp things tend to dull over time. These are some simple ideas that demonstrate the concept of Entropy. Here is another concept. Energy is only available if there is a path for the energy to flow from a place of high energy to a place of lower energy. Example, water on a mountain top only has energy available if there is a place at lower elevation for the water to flow too. A hydro generator on a dam is a good example. You don't see hydro generators located on calm lakes.
Now, how does this apply to economics? Wealth is a relative thing too. Wealth is like water at the top of a mountain and poverty is like water in a lower elevation calm lake. Over time all the water eventually ends up down in the ocean without any more energy or wealth. If there was no energy from the Sun, the whole process of wealth creation would end. For the human race there is a source of energy like the Sun and it is the mental inventiveness of the human mind.
