Dear Aleks & collegues
In my understanding, entropy is an illuminating concept at the level of
semi-closed systems like the earth, which is closed to material but open to
energy flows. Here the Second Law teaches us that there are limits to
material growth of economies, and as Bob remarked, these limits may come
from the overloaded sinks even before we have degraded the sources. This
issue has been long ignored by mainstream economists although the notion of
entropic processes has been introduced by Georgescu Roegen already in the
early seventies. When we come to microeconomic issues and economic networks
I see entropy as a rather rough conceptual tool.
Firms and networks may be
better described (in my opinion!) as autocatalytic systems (what follows is
based on ecological networks analysis of Bob Ulanowicz ). Suppose that a
firm is started at t=0 with one person and the resources of size R=1. If
the entrepreneur after, say, periods t=3 succeeds to increase the resource
size to R(t3)= 2, than there is propensity that he will reinvest part of the
resources to add an employee. As the firm gets bigger its potential to
dissipate energy/resources and increase internal organization grows, but
subject to some constraints that I will skip here. The constitutive elements
of the firm - its employees - exchange energy, resources and information in
the process of business activity. As members of the internal autocatalytic
loop of the firm they are subject to competition and selection processes (as
well as the firm is subject to these processes in its wider environment -
the market). Autocatalysis stimulate competition
and selection in the sense that it streamlines preferentially energy and
material flows towards more efficient members, be these already inside the
loop or act at its periphery as potential "new entrants". In the competitive
process a new member who contributes more to the growth of the loop may
replace a less
efficient member. In that sense firm is autonomous of its microscopic
constitution: although individual members can be replaced
the loop itself may persist in time (the same is valid at the next
hierarchical level that of the market where firms enter and exit but the
industry persist over much longer period of time). It follows then, that
cooperative behavior is guaranteed or inscribed in the system - those
members of the firm which fail to cooperate (read, to contribute!) are most
likely to be expelled from the "loop" and replaced with a new entrant. This
is valid for also for the firms which are subject to selection process in
the economic network. The internal autocatalytic loop of the firm persists
only if the inflows of funds are equal or greater than outflows, and
therefore, as you mention, on the
average its employs will maintain or increase their energy (or the firm will
die out).
A single market (e.g.the automotive market) is a functional
network of interdependent firms, hich exchange energy, resources and
information, and
in concert with household demand operated as an autocatalytic system of its
own.
The economy is an ensemble of interrelated markets and total household
demand. As the economy gets bigger its autocatalytic loop drives in more
energy and
resources (the centripetal pull) and an ensemble of economies (e.g. G8) may
produce an autocatalytic loop at the international level (e.g. the period of
industrialization in Western Europe and its periphery 1870-1914) and the
more globalized loop after the II World War, including Japan the US etc.
When the global autocatalytic loop become large enough its effects are
necessarily felt on the whole biosphere (sources and sinks) and we come at
the beginning of our story. At this point the entropy analysis at the level
of the global system becomes wholly operative and illuminating.
The very best
Igor
---- Original Message -----
From: "Aleks Jakulin" <jakulin@acm.org>
To: "Loet Leydesdorff" <loet@leydesdorff.net>; "FIS"
<fis@listas.unizar.es>
Sent: Wednesday, May 11, 2005 11:43 AM
Subject: Re: [Fis] Economic Networks
> I'll present some brief ideas on entropy, networks and the present
> thread, which is far from being mature, but perhaps it can be
> chiseled into a better form. This way, we'll see the connection between
> the seemingly far-fetched philosophical discussion and the topic of the
> present thread.
>
> 1. ENTROPY FOR HIERARCHIES
>
> Let's focus on the level of a (possibly compound) system, composed of
> components, which are themselves composed from molecules. The energy
> posessed by the components is X, and the energy posessed by the molecules
> is Y. The total energy is X+Y, and this is interpreted as fixed in most
> contexts of thermodynamics, but we interpret Y as entropy. The second law
> of thermodynamics can be interpreted as saying that whatever you do,
> molecules never take less than the components.
>
> Let's take this to economics: the funds of a corporation are X, the
> funds of its employees are Y. In a zero-sum game, closed system,
> X+Y=constant. Whatever goes on, employees won't give their money to the
> corporation, but will happily take money from the corporation. This way,
> we can predict the dispersal of the corporation. HENCE, the corporation
> can only exist when there is an inflow of funds from outside. This
> doesn't mean that everyone in a corporation will happily disperse: there
> can be sub-corporate entities that cut in the intermediate space between
> the corporation as a whole and an individual employee.
>
> The message is that when you have an emergent system, such as the body
> or a corporation, it is built on simpler systems that are only involved
> in cooperative behavior so that their own energy is maintained or
> increased.
>
> The other message is that unless you take take entropy as a metaphor,
it's
> easy to dismiss as "reductionist".
>
> 2. EMOTION, HOPE, SUSTAINABILITY, SURVIVAL
>
> I'm going to be quite un-romantically neo-Darwinian now, to everyone's
> chagrin, I guess...
>
> Emotion can be seen as an evolved mechanism to keep human beings
> cooperating (attachment, friendship), surviving (fear, disgust),
> reproducing (love), and taking care of their offspring (parental love,
> generosity) in their pursuit of happiness. The quiet integrating inertia
> of emotion protects against the brittle differentiating chaotic nature of
> reason.
>
> Maximizing the sheer number of humans *counters* with their ability to
> survive in the long run: this leads to the degradation of the
environment,
> to an increased risk of quickly transmitted diseases. No, this is not the
> goal. The goal is balancing on the Quality(cultural, sexual and Darwinian
> selection)~Quantity(cultural and sexual reproduction, cellular division).
>
> So evolution takes place at many levels. The key realization is that one
> level sits on top of other levels. You cannot survive under an x-ray
> machine because your cells are dependent on stable molecules and atoms. A
> culture that consumes its people in wars, or expends its best people
> without letting them reproduce (e.g., through an overextended education
> that interferes with reproduction), is a dying one. See the failure of
> communism/socialism, see the failure of nazism, see the failure of
> industrial age capitalism, and perhaps the impeding failure of systems
> that currently exist: these were the cultures that didn't pay attention
to
> the level they were built upon (the productive culture-building people in
> contrast to the unproductive and selfish). That's one aspect of what
> sustainability is about, the other is the environment. Or perhaps I
should
> call it survivability, not sustainability.
>
> Now my version of Pascal wager. I don't know what's the case:
> a) there is a sustainable way, there is a meaning
> b) there is none.
>
> I do know what are my options:
> 1) learn, work hard and hope
> 2) give up
>
> The outcomes
> a)&1) = win
> a)&2) = lose
> b)&1) = lose
> b)&2) = lose
>
> Therefore, learn what there is, pick something that's worth believing
> into, and then hope for the best, working hard. I won't sacrifice myself
> for a culture that I don't believe is sustainable, though.
>
> Some replies:
>
> Loet Leydesdorff wrote:
>> This is a social-darwinistic model of society and therefore not
>> attractive
>> to Soren and me. In addition to being "in the system," we
are also
>> reflexive.
>
> My comment to Soren was not about sociobiology, though, and my reference
> to "your philosophy" did not refer to Soren's philsophy (that
would be
> very offensive).
>
> I was merely trying to concoct a physicalist theory of meaning in terms
> of Stan's hierarchies: the higher level is the 'meaning' of the lower
> level, and the lower level is the 'fact' to a higher level. This way one
> avoids the recursive self-referential loop (What is A to A? What is the
> feeling of feeling cold? What is the meaning of meaning?), also see
> general semantics [http://www.esgs.org/uk/goal.htm]
>
> We are able to think about societies, their purpose and meaning, so we
> are indeed able to think of things that are greater than we are. Even
> our own thinking about our own purpose and meaning is an example of
> this. Of course, the thinking is not complete and perfect, but if one
> accepts that thinking is essentially a web of constructs, we can discuss
> different theories of meaning: all of them are oversimplified, but some
> we might like better than the others.
>
>> The social system has developed, for example, a juridical system
>> which tries to prevent people from perishing when they are weak. The
>> dynamics of philosophies ("your philosophy will perish")
are in important
>> ways different from the dynamics at the level of species. These in
the
>> dynamics provide us with room for generating a knowledge-based
>> economy. Scientific knowledge is often based on counter-factuals and
>> counter-intuitive by nature.
>
> I agree that the dynamics is different, but still I find it similar
> enough so that the same explanatory metaphors can be used. I have seen
> my share of technologies and methodologies that have perished, a great
> many of dead ends. And there too are means of protecting and saving the
> weak, like the web archive [http://www.archive.org], and various
> sanctuaries for old software
> [http://www.woundedmoon.org/win32_freeware.html]
and old computer games
> [http://www.the-underdogs.org/].
Nevertheless, a lot unnamed things have
> perished, and I'm sure this is the case of philosophy as well. Beware
> the trap: if you can remember it, it hasn't perished yet.
>
>> Thus, the natural ("biological") order of things is a
dangerous
>> argument at the level of society because one risks to
>> throw away the child with the bathing water (i.e., culture).
>> The differences between "biological" evolution and cultural
evolution are
>> to
>> be celebrated if we wish to understand how a knowledge-based
subdynamics
>> can
>> counteract upon the "natural" order of things. I write
"biological"
>> deliberately between quotation marks because the biological sciences
are
>> part and parcel of this culture.
>
> Agreed. But naturalistic approaches do speak of co-evolution between
> culture and population, so the workers in the area are well aware of the
> problem. The devices, however, are at a lower level, see culture as an
> emergent phenomenon, but do not model it (with some exceptions, see
> "memes"). It's the same as the interface between chemistry and
biology,
> or between psychology and sociology.
>
> While chemistry and biology, psychology and sociology peacefully
> coexist, humanists and naturalists keep throwing insults at one another.
> Most naturalists don't take the time to understand philosophy and just
> ridicule it and dismiss it in their naive overconfidence; most humanists
> fear the one-sided uninformed brashness of naturalists, and then employ
> scare tactics. I guess the problem is in the competition between
> psychology and cognitive neuroscience, and between sociology and
> evolutionary psychology. With the escalated temper at both sides, there
> is rarely an opportunity to exchange ideas.
>
> Aleks
>
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Received on Mon May 16 10:55:55 2005
