Episode Description
This podcast critically examines mainstream economics, particularly its reliance on equilibrium theory and its limited treatment of natural resources and production. The authors propose an alternative "entropy economics" rooted in biophysical principles, viewing economic systems as extensions of living systems constrained by thermodynamics. They argue that value is determined by scarcity and the number of suppliers, offering a simple mathematical model for this concept. The text critiques standard models like Arrow-Debreu for their unrealistic assumptions and limited relevance to the real world, emphasising the importance of nonequilibrium perspectives. Furthermore, it explores the role of regulation, inequality, and the impact of resource abundance and depletion on economic activity and societal structures. Ultimately, the work advocates for a more realistic and unified understanding of economics grounded in physical and biological realities, moving beyond the illusions of mainstream thought.