The Economy as a Whole Living
AbstractNeoclassical economics, governed by the first principle of thermodynamics, based on Newtonian mechanics and centred on the rational individual, reifies the human actions and preferences in unites of measure for calculating marginal utility, determining the indifference curve and the ‘equilibrium point’. But it is exactly this wish of the neoclassic economists to formalize and abstract which will later prove to be the main deficiency of the mainstream orthodox theory. Instead, we are being proposed to adopt an organic view upon the economy and to orientate towards identifying the quality of human actions and not their quantitative coordinates. The optics is changed under the influence of the second principle of thermodynamics, which emphasizes the fact that the economic process is irreversible and eminently characterized by entropy. Within human activities massive amounts of materials are engaged. These materials dry the planet of resources and exhaust the reserves supply for the future generations. In the light of this new view, the purpose of economic activity slightly shifts from the maximization of production and revenues to the minimization of the entropy of personal actions and to laying the foundations of sustainable development.
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Bibliographic InfoArticle provided by Ovidius University of Constantza, Faculty of Economic Sciences in its journal Ovidius University Annals, Economic Sciences Series.
Volume (Year): XI (2011)
Issue (Month): 2 (May)
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Web page: http://www.univ-ovidius.ro/facultatea-de-stiinte-economice
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bioeconomy; law of entropy; whole living; sustainable development;
Find related papers by JEL classification:
- B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian
- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
- Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
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