Economy
From Hobson's Choice
The space in which transactions and production occur. Arbitrarily limited in scope by the national boundaries and population. At this site, we speak of an "economy" in contrast to an "industrial system," which implies a structure of economic institutions with some degree of collective interests and volition.
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Context
Economics is normally taught as if it were analogous to physics. In physics, the object is to understand universal rules that describe all translations among objects. The nature and composition of objects doesn't influence those laws.[1] Likewise, generalizations about the health of the economy presuppose that all institutions or participants in it are essentially the same; that growth is hydraulic, homeostatic, and isotropic; and that an inevitable corollary to this, all interference in the economy by state action is inherently misguided.
Efforts to explain the behavior of institutions operating within the economy as wholly guided by impersonal laws of economics have become extremely sophisticated, but have tended to blur the distinction between the economy as an immense institution of its own, and the Cartesian conception of the economy advanced by orthodox economics.
Critiques
One famous critique was advanced by Nicholae Georgescu-Roegen (1906-1994), who noted the problem that economics tended to operate in "logical time," rather like the translations of elementary physics. All collisions are elastic, and theoretically reversible. Time is imagined to be practically the same whichever direction it runs. In contrast, the collateral branch of physics dealing with thermodynamics may be said to have time's direction imposed by the phenomenon of entropy.[2]
Another was Philip Mirowski, whose attacks on the physics analogies of economics is especially thorough.
Notes
- ↑ The Special Theory of Relativity does allow for some conditions under which the behavior of gravitation may be greatly distorted by, for example, extremely massive, yet tiny, objects—like black holes. However, this merely means that the real laws of gravitation are not those of Newton, but the more general ones of Einstein.
- ↑ See John Gowdy & Susan Mesner, "The Evolution of Georgescu-Roegen's Bioeconomics"
, Rensselaer Polytechnic Institute (1998)
See Also
External Links
- Philip Mirowski, More Heat Than Light: Economics as Social Physics, Physics as Nature's Economics Cambridge University Press (1989)
- John Gowdy & Susan Mesner, "The Evolution of Georgescu-Roegen's Bioeconomics" , Rensselaer Polytechnic Institute (1998)
James R MacLean (14:10, 30 December 2007 (PST))
