Wasn't sure where to put this?

Is "debt" a sort of "entropy" in its scientific/mathematical model?

I'm not looking for general answers, but I would like to see something specific if possible ie math/physics/econimocs/biological..ect to argue "yay" or "nay"

Originally posted by joe shmo
Is "debt" a sort of "entropy" in its scientific/mathematical model?

I'm not looking for general answers, but I would like to see something specific if possible ie math/physics/econimocs/biological..ect to argue "yay" or "nay"

Well, now that I think about it I guess debt cant be paralelled with entropy as some time there is "negative debt" in transactions

Originally posted by joe shmo
Is "debt" a sort of "entropy" in its scientific/mathematical model?

I'm not looking for general answers, but I would like to see something specific if possible ie math/physics/econimocs/biological..ect to argue "yay" or "nay"

Check out

http://en.wikipedia.org/wiki/Thermoeconomics

Originally posted by JS357
Check out

http://en.wikipedia.org/wiki/Thermoeconomics

Its puzzleing to think that our whole economic and societal system, which we beleive has been "our abstract creation" could and most likely is governed by thermodynamics, and natural laws.

Originally posted by joe shmo
Its puzzleing to think that our whole economic and societal system, which we beleive has been "our abstract creation" could and most likely is governed by thermodynamics, and natural laws.

By 'puzzling' you mean 'absurd'?

Originally posted by joe shmo
Its puzzleing to think that our whole economic and societal system, which we beleive has been "our abstract creation" could and most likely is governed by thermodynamics, and natural laws.

Any system whether in nature or created by us, will follow certain laws. Often those laws are at least in part a result of statistical effects or other common mathematical patterns. It is not surprising then that there are similarities between different systems and that analogies can be drawn. The mathematical branch 'Algebra' is all about studying such common pattern in their generality.
But one must always be careful with analogies not to go too far. If you see some similarities between two systems, it does not always mean it is valid to apply all the rules of one to the other. There must be justification for doing so, and it must be able to stand up to scrutiny.

One has to be careful here to draw distinctions between a theory of economics and a model of
specific situations.

A theory is supposed to explain how and why a system works.
A model is more like a black box where you put the initial conditions in and turn the handle
and get the result back out. The internal workings don't have to have any barring on how
in reality the system works as long as in the applied situation the outputs you receive match
the result in reality.

Originally posted by bbarr
By 'puzzling' you mean 'absurd'?

No, I suppose I just meant that for a moment while having the 'thought' I felt slightly more conscious.

Originally posted by twhitehead
Any system whether in nature or created by us, will follow certain laws. Often those laws are at least in part a result of statistical effects or other common mathematical patterns. It is not surprising then that there are similarities between different systems and that analogies can be drawn. The mathematical branch 'Algebra' is all about studying such c ...[text shortened]... other. There must be justification for doing so, and it must be able to stand up to scrutiny.

Are you purposing that this 'thermoeconomic model' is just a black box (as googlefudge stated)?

Originally posted by joe shmo
Is "debt" a sort of "entropy" in its scientific/mathematical model?

I'm not looking for general answers, but I would like to see something specific if possible ie math/physics/econimocs/biological..ect to argue "yay" or "nay"

According to economists, perhaps. Who knows what they think? Ask ten economists a question, and you'll get at least eleven answers, at most one of which will be provable (and probably provable wrong).

According to science, sheesh no. For one, entropy is constantly increasing in a closed system. Is debt? Guaranteed? Then to whom is that debt, in a closed(!) economy? For another, entropy has a certain relation to energy. What is the economic equivalent of energy? Money is the easy answer, but it won't wash: debt is, in essence, negative money (it's money I owe someone rather than money I have), while entropy is certainly nothing like negative energy.

Richard

Originally posted by Shallow Blue
According to economists, perhaps. Who knows what they think? Ask ten economists a question, and you'll get at least eleven answers, at most one of which will be provable (and probably provable wrong).

According to science, sheesh no. For one, entropy is constantly increasing in a closed system. Is debt? Guaranteed? Then to whom is that debt, i ...[text shortened]... ather than money I have), while entropy is certainly nothing like negative energy.

Richard

lets say I give you 10 dollars for some good, and then I make 5 dollars from re-selling that good,what recieves the difference...the economy?

Originally posted by joe shmo
lets say I give you 10 dollars for some good, and then I make 5 dollars from re-selling that good,what recieves the difference...the economy?

If we're to take the entropy analogy seriously, then there should be some sort of loss (expressible in economic terms) attending every economic transaction. There is some sort of loss that attends every deviation from Pareto-optimality. But that is analytic; it's what defines Pareto-optimality. If I exchange $5 for your frosty pint of beer, and I value it at $5 and you do too, then is there something lost in the exchange? Is there some higher-order notion of value here that function independently of what we, the exchangers, believe, and independently of what the market has established as a going price for pints? I guess I'm just confused here.

Originally posted by bbarr
If we're to take the entropy analogy seriously, then there should be some sort of loss (expressible in economic terms) attending every economic transaction. There is some sort of loss that attends every deviation from Pareto-optimality. But that is analytic; it's what defines Pareto-optimality. If I exchange $5 for your frosty pint of beer, and I value it a ...[text shortened]... what the market has established as a going price for pints? I guess I'm just confused here.

I guess I'm being lazy in not doing the research, but roughly how many countries/kingdoms/empires in the past/present historically failed because of debt?

Originally posted by joe shmo
I guess I'm being lazy in not doing the research, but roughly how many countries/kingdoms/empires in the past/present historically failed because of debt?

I have no idea. Is debt supposed to be the economic analog of entropy? If so, then the analogy seems very, very rough. Many economic transactions do not result in debt, debt can be strategically run in order to increase economic power (as when one builds credit), debt can be forgiven, etc.

Originally posted by bbarr
I have no idea. Is debt supposed to be the economic analog of entropy? If so, then the analogy seems very, very rough. Many economic transactions do not result in debt, debt can be strategically run in order to increase economic power (as when one builds credit), debt can be forgiven, etc.

Yeah, I didn't say that debt "is" analogous to entropy, It was just a gut feeling that a had during the original thought. I threw that out on my second post because I couldn't rectify it with profit (negative debt)...

I hadn't known of the "thermoeconomic model" until JS357 pointed it out to me, so im really not sure what the actual analogies are.

however, I may have been a little hasty in my ( probably just as hasty as I was drawing the debt/entropy analog in the first place) denial of it, as if memory serves correctly, the second law only forbodes negative entropy in any 'real' process. Is the economics a 'real' system as far as the natural laws go?