The second law of economics : energy, entropy, and the origins of wealth / Reiner Kümmel.

Format:

Book

Author/Creator:

Kümmel, Reiner, 1939-

Series:

Frontiers collection

Language:

English

Subjects (All):

Economics.

Physical Description:

xix, 293 pages : illustrations (some color) ; 24 cm.

Place of Publication:

New York : Springer Science+Business Media, LLC, [2011]

Summary:

Nothing happens in the world without energy conversion and entropy production. These fundamental natural laws are familiar to most of us when applied to the evolution of stars, biological processes, or the working of an internal combustion engine, but what about industrial economies and wealth production, or their constant companion, pollution? Does economics conform to the First and the Second Law of Thermodynamics? In this important book, Reiner Kümmel takes us on a fascinating tour of these laws and their influence on natural, technological, and social evolution. Analyzing economic growth in Germany, Japan, and the United States in light of technological constraints on capital, labor, and energy, Professor Kümmel upends conventional economic wisdom by showing that the productive power of energy far outweighs its small share of costs, while for labor just the opposite is true. Wealth creation by energy conversion is accompanied and limited by polluting emissions that are coupled to entropy production. These facts constitute the Second Law of Economics. They take on unprecedented importance in a world that is facing peak oil, debt-driven economic turmoil, and threats from pollution and climate change. They complement the First Law of Economics: Wealth is allocated on markets, and the legal framework determines the outcome. By applying the First and Second Law we understand the true origins of wealth production, the issues that imperil the goal of sustainable development, and the technological options that are compatible both with this goal and with natural laws. The critical role of energy and entropy in the productive sectors of the economy must be realized if we are to create a road map that avoids a Dark Age of shrinking natural resources, environmental degradation, and increasing social tensions. Book jacket.

Contents:

1 Prologue: Time Travel with Abel 1

1.1 From the Big Bang to the Sun 1

1.2 Light on Earth 3

1.2.1 As Life Goes 4

1.2.2 Fire and Grain 6

1.3 Ancient Empires 8

1.4 Wind Power, Gunpowder, and Wood 11

1.5 Industrial Revolution 16

1.6 Golden Age 20

1.7 Outlook 24

References 26

2 Energy 29

2.1 Understanding the Prime Mover 29

2.1.1 How the Energy Concept Evolved 29

2.1.2 Energy for all and Forever 33

2.1.3 Energy Quantity and Quality 35

2.2 Sun and Earth 37

2.2.1 Energy Production in the Sun 37

2.2.2 The Natural Greenhouse Effect 40

2.2.3 Solar Activity and Climate 42

2.2.4 Photosynthesis, Respiration, and Food Production 43

2.3 Amplifiers of Muscles and Brain 45

2.3.1 Heat Engines 45

2.3.2 Transistors 51

2.4 Energy Services 52

2.4.1 Freedom from Toil 52

2.4.2 Comfort, Mobility, Information 54

2.4.3 Political Power 56

2.5 Consumption, And What Is Left 58

2.5.1 Consumption of Energy Carriers 58

2.5.2 Reserves and Resources of Fossil and Nuclear Fuels 62

2.5.3 Renewable Energies 64

2.5.4 Energy Conservation 73

2.6 Technological Perspectives 76

2.6.1 Fission 77

2.6.2 Fusion 81

2.6.3 Solar Power from Deserts and Space 83

Appendix 1 Basic Forms of Energy 92

Appendix 2 Energy Units 107

References 108

3 Entropy 113

3.1 No Free Lunch 113

3.2 Equipartition, the Toddler, and Entropy 117

3.3 States of Systems 120

3.4 The Way Things Change 124

3.4.1 Driving toward Disorder 124

3.4.2 Haste Makes Waste: Irreversible Processes 128

3.5 Arrow of Time 130

3.6 Entropy Production and Emissions 134

3.6.1 Sources and Substances 135

3.6.2 Anthropogenic Greenhouse Effect. 137

3.6.3 Pollution Control and Heat Equivalents of NO_x SO₂, CO₂, and Nuclear Waste 147

Appendix: Non equilibrium Thermodynamics and the Second Law 154

References 167

4 Economy 171

4.1 Complementary Perspectives on the Economy 171

4.2 Energy, Entropy, and the Growth Paradigm 173

4.3 Preanalytic Vision: The Law of Diminishing Returns 181

4.4 How Technological Constraints Change Economic Equilibrium 184

4.4.1 Output Elasticities 186

4.4.2 Shadow Prices 187

4.5 The Second Law of Economics 192

4.5.1 Levels of Wealth Creation 192

4.5.2 The Technological Constraints on Capital, Labor, and Energy 194

4.5.3 Modeling Production 199

4.5.4 Economic Growth in Germany, Japan, and the USA 205

4.5.5 The Productive Powers of Capital, Labor, Energy, and Creativity 210

4.5.6 Cointegration 215

4.5.7 The "Useful Work" Approach 219

4.5.8 Pollution, Recycling, and Perspectives on Growth 221

4.6 Distribution of Wealth 227

4.6.1 Adam Smith's Concepts and Karl Marx's Error 227

4.6.2 Rich and Poor 229

4.6.3 Taxes and Debts 234

4.6.4 Discounting the Future 242

4.7 Summary and Discussion 245

Appendix 1 Maximizing Profit 247

Appendix 2 Maximizing Overall Welfare 248

Appendix 3 Aggregating Output and Factors in Physical Terms 252

Appendix 4 Explicit Constraint Equations 260

Appendix 5 Empirical Data of Output and Inputs 262

Appendix 6 Determining Technology Parameters 265

References 269

5 Epilogue: Decisions Under Uncertainty 275

5.1 Ethics 275

5.2 Reason 278

References 281.

Notes:

Includes bibliographical references and index.

ISBN:

1441993649

9781441993649

OCLC:

706784539