- 21 Oct '11 12:25

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" - 21 Oct '11 20:08

Check out*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"

http://en.wikipedia.org/wiki/Thermoeconomics - 22 Oct '11 10:14

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.*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.**

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. - 22 Oct '11 12:03One 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. - 22 Oct '11 14:19

Are you purposing that this 'thermoeconomic model' is just a black box (as googlefudge stated)?*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.** - 22 Oct '11 14:41

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).*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 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 - 22 Oct '11 22:11

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 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 - 23 Oct '11 22:48

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 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?** - 24 Oct '11 00:29

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 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.** - 24 Oct '11 00:41

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 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?** - 24 Oct '11 01:26 / 2 edits

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)...*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.**

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?