by From Katharine Farrell Georgescu-Roegen’s call, echoed by many of his contemporaries, and today paid lip service to by most, if not all economist, was to give serious analytical attention to representing the role of biological dynamics in economic process. It was expressed in large part through his detailed and repeated reference to the second law of thermodynamics, which served as the basis for his proposal to radically reconfigure the mathematical foundations of economic analysis: because economic process is intended to bring about qualitative change, which is frequently irreversible and which “eludes arithmomorphic schematization” (Georgescu-Roegen, 1971, p. 63). This means that accurate representation of the dynamics of economic process must include theory that addresses the
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from Katharine Farrell
Georgescu-Roegen’s call, echoed by many of his contemporaries, and today paid lip service to by most, if not all economist, was to give serious analytical attention to representing the role of biological dynamics in economic process. It was expressed in large part through his detailed and repeated reference to the second law of thermodynamics, which served as the basis for his proposal to radically reconfigure the mathematical foundations of economic analysis: because economic process is intended to bring about qualitative change, which is frequently irreversible and which “eludes arithmomorphic schematization” (Georgescu-Roegen, 1971, p. 63). This means that accurate representation of the dynamics of economic process must include theory that addresses the structure of the relationship between qualitative and quantitative elements. While there is not sufficient space to unpack the point here in detail, that position, which includes postulates regarding the relationship between time, space and human intentionality, is closely linked to a second position that underpins his elaboration of an alternative analytical economics methodology – the flow-fund theory.
Using flow-fund theory, which replaces the stock, flow, fund distinction used in conventional economic analysis, with a flow-fund distinction that depends on the spatial and temporal boundaries of the economic process in question (Farrell and Mayumi, 2009; Silva-Macher and Farrell, 2014; Farrell and Silva Macher, 2017), makes it possible to construct complex, functional analyses that continue to represent the basic features of economic process, while making explicit the role of intentionality in their delimitation and also providing a means to include ecological elements and dynamics, which cannot be accurately represented in monetary units. The two propositions at the heart of Georgescu-Roegen’s flow-fund theory, to make analytical space: 1) for the representation of biodynamics and 2) for the role of purpose in delimiting the boundaries of an economic process, rest at the core of what he referred to as “bioeconomics”, (Georgescu-Roegen, 1986; Mayumi and Gowdy, 1999). Mayumi (2009, p. 1237) describes this as “a new style of scientific thought… that combines elements of evolutionary biology, institutional economics and biophysical analysis associated with energy and mineral resources.” At a most basic level, I would say, the work of Georgescu-Roegen needs to be taken far more seriously by mainstream and conventional heterodox economists than it has been to date. Precisely because it implies the need for a radical break with convention, it has been left to the side or cherry picked. It is well past time for that to change.