The nature of economic entropy and the necessity of intervention

Abstract

The aim of the present paper is to formulate a new (epistemological) version for the meaning and the role of entropy in a social and particularly in an economic system. The increase of the entropy in an isolated and closed system leads to the devaluation of the system’s energy (Entropy’s Law). Thus, it is necessary to “open” the system, by the external intervention (action), so that system avoids collapsing.

JEL Classification: P00