While physical sciences deal with the interactions of matter and energy, economics can be said to deal with the production and exchange of goods and services. Because goods and services incorporate matter and energy, the physical sciences are clearly relevant to economics. In particular, one can expect the laws of thermodynamics to impose constraints on economic processes as they do on physical processes (figure 1). It is clear that the laws of conservation—of matter and energy, for example—have implications for the use of resources and for the generation and treatment of wastes. The law of the increase of entropy—the second law of thermodynamics—constrains economic processes to those that reduce available work, increasing the entropy of the Universe.
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November 1984
November 01 1984
Thermodynamics and economics
The laws of the conservation of energy and of the increase of entropy constrain the processes by which raw materials are transformed into consumable goods, and therefore have implications for the way economists model these processes.
Physics Today 37 (11), 62–71 (1984);