Entropy

= the second law of thermodynamics, also known as the law of entropy

Description

"The second law of thermodynamics states that the “entropy” of a “closed” system always increases. This means that such a system will spontaneously “run down” as all available energy is used up and eventually there is no potential for further useful work. A system which no longer has the capacity to do useful work because all the energy available to it has been used up is said to be in a state of maximum entropy.” (http://www.uic.edu/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/2186/2062)

Example

“A useful analogy to describe the second law is an hour glass [16]. An hour glass can be considered a closed system in that no sand enters the glass and none leaves. But although the quantity of sand in the hour glass is constant, the bottom chamber is filling up and the top chamber is becoming empty. The sand in the bottom chamber may be seen as a measure of the amount of entropy in the system. Sand in the top chamber is capable of doing work by falling, like water at the top of a waterfall, while sand in the bottom chamber has spent its capacity to do work. The second law therefore states that whenever work is done the amount of usable energy in the system declines, which, in the case of a closed system, means that the system will eventually run down.” (http://www.uic.edu/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/2186/2062)

Discussion: The Negative Entropy of Open Systems

Mike Chege:

““Open” systems, on the other hand, unlike closed systems, receive an inflow of material and energy from their environment so that they do not run down. In the terminology of the physicist Erwin Schrödinger (1945), open systems receive “negative entropy” from the environment. Biological systems such as human beings are good examples of open systems.

Because every process of production is, at bottom, a transformation of energy and matter, it should come as no surprise that a number of economists have found the laws of thermodynamics to be concepts with considerable relevance for economics. In fact, interest in the laws of thermodynamics has led to the rise of an approach known as Thermoeconomics. Approaches within thermoeconomics range from from those that seek to develop highly technical analytical models of the economy based on the laws of thermodynamics, to those that view thermodynamic concepts as analogies and metaphors. While the analogies–and–metaphors approach may not allow us to make exact and deductive scientific statements about economic systems, it still has merit as a heuristic, with the capacity to allow us to see economic phenomena in a new light and hence stimulate research in new and potentially fruitful directions. In this essay we will be taking the analogies–and–metaphors approach.

So, how do we incorporate the entropy law into our model? If we acknowledge that any process of economic production is dependent on close interaction with the environment from which it extracts materials and energy, then it follows that any process of economic production that remains isolated from its surroundings, in the sense that it does not receive any inputs from its surroundings, will eventually succumb to “economic entropy.” In other words, it will eventually become incapable of generating any more outputs just as a thermodynamic system that has used up all its energy is incapable of doing any more work.” (http://www.uic.edu/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/2186/2062)