An Interview with Justin Stolen, Ph.D., Chair of the Information Systems & Quantitative Analysis Department at the University of Nebraska in Omaha.
ENTROPY PRESS: Please define entropy in terms of economics, or, how you understand the term in general?
JUSTIN STOLEN: As I understand it, I see entropy as energy moving from an ordered state to an unorganized state. And I suppose entropy's relation or effect on economics goes back to Malthus.
E.P.: I don't know who that is.
J.S.: Oh...well, Malthus was an economist, one of the first economists, back in the late 18th century. He called economics the "dismal science." Malthus was very pessimistic; he died in 1834. He called it the dismal science because he based his theories on population growth. You know, the population would keep growing and growing until there were not enough resources to feed everybody and so a famine would break out killing off the population.
E.P.: Oh yeah! Like the case studies you always read about with sheep on an island or fish in a pond.
J.S.: Right. So in that regard I think entropy -- "order" to "not order" -- is similar to Malthusian economics. It's also applicable when I think about the process of production. In production you have high order or low entropy; you're making products in a systematized way so it appears as high order. However, during the process you are using resources and other products and by displacing those resources you yield high entropy.
E.P.: You're creating a mess.
J.S.: Exactly. And the price of the product you've just produced isn't necessarily matching the actual price of your product say in terms of pollution, used resources, etc., so you have entropy: low to high. I mean, no matter what we produce, this process of displacement/waste occurs and our resources will be depleted, even if it takes 10,000 years -- taking into account technological change -- but it will happen. Were going to use up everything. But we'll probably destroy ourselves first...
E.P.: I agree.
J.S.: You see. And that's where I think entropy has more social and political aspects. Take, for instance, England. It was coal producing during the height of it's empire. They never took into account that that resource fueled much of their economy and when the coal ran out it shifted the balance of power. So through the utilization and depletion of resources it rendered England a second class nation.
E.P.: Would you say this example is applicable to the US and oil?
J.S.: Of course. No matter what the resource is -- oil in the US or Middle East, coal in England -- we'll use it up. Like Malthus said: Economics is a dismal science.