Geobiodynamics and Roegen Type Economy

C. Udrite, M. Ferrara, D. Zugrvescu, F. Munteanu s a

Abstract Section 1 presents a connection between geobiodynamics and the Roegen type economy. Section 1 discusses the applicability of concepts and techniques of thermodynamics in economics and viceversa via an isomorphism. Section 2 shows that the economy of European Union Economy is far form equilibrium. Section 3 describes some economic black holes as small parts of a global economic system in which the national income is so powerful. We use these ideas to improve our understanding of the nature of thermodynamic-economic development and evolution.

Mathematics Subject Classication: 80A99, 91B74 J.E.L. classication: B41 Key words: Key words: Roegen economy, thermodynamics-economics dictionary, economic black holes, economic equilibrium.

Geobiodynamics and Roegen Type Economy

The Planet Earth System, is, as any living system (or system supporting life), extremely dicult to dene and characterize properly and completely. Presently mankind can be described as being in a Modern Era in which the Informational Society is currently unfolding while at the same time the Knowledge-based Society (while not fully matured or functional) may be regarded as emerging. Taking into account this general context, we attempt a denition of the Planet Earth System that extends beyond the natural structures (inorganic, organic or living) that are typically the object of study for 1

Geosciences and/or Biology and Biochemistry. However, besides the Natural structures, man-made Artifacts have also been produced throughout the entire human history and, after adding onto/combining with the Natural ones, resulted in a complex symbiot. Presently, a tentative list of such articial systems with signicant impact (ecologically, economically and socially) may include the following items: - the entire assembly of systems dedicated to the generation and distribution of electrical energy, as well as the extraction and renement of oil and the distribution of the nal oil-derived products down to industrial and individual customers; - the entire combination of roadways, rail-roads and airways that make up the infrastructure necessary for commerce and tourism, i.e. the circulation of goods and people; - the production and distribution of any type of goods. All these Articial systems, when combined with the Natural ones in which they are situated and/or with which they interact for their normal operation generate an entirely new System, of a dierent type and quality. Natural and Articial systems are now intermingled, interacting, interrelated and interdependent, thus permanently dening and inuencing each other, giving rise to an entirely new and qualitatively dierent dynamics. This novel symbiosis and its dynamics are only partly controllable or predictable, and in order to be understood (even if only partially) they have to be examined using an interdisciplinary approach, a re-evaluation of the classical sciences, a fundamental change in the points of views and techniques used to study, model and predict such complex systems [3]. Investigations have been started and research is being carried out worldwide in order to elucidate which are the best directions of study to be followed for the examination and understanding of this Articial-Natural hybrid. From the ndings that have resulted from such work until now it is worth mentioning that the sole methodology capable to study an object of such a complexity and diversity with an integrative approach is that oered by the Science of the Complexity [14]. In this new vision, the behavior and dynamics of the Planet Earth System is simultaneously determined by two major force systems: a) The complicated interactions between the crust, atmosphere, hydrosphere and ionosphere, whose activity is additionally inuenced and modulated by the Solar Systems dynamics (electromagnetic storms, the solar 2

wind, the ionospheric and telluric currents, the sun spots and their eruptions, the tides, etc.) b) The essential social components that dene in their evolution new needs and opportunities, resulting in a constantly changing world of artifacts, and hence a permanently modifying coupling and interaction between Natural and the Articial across the entire planet. From this perspective, the sociological, economical or engineering studies/sciences must be recongured and integrated in a larger and broader subject (meta-science) that transcends yet combines them interdisciplinary in order to create this new framework in which each part would also depend on and be supported by elements from the other ones. In a rst stage, the generation and application into practice of the previously mentioned phenomenon has already been started as an increasing number of researchers more and more frequently refer to such novel meta-domains, e.g. bioeconomy, biogeophyisics, geobiophyisics, astrobiophyisics as well as bioelectronics, microelectromechanics and jurisdynamics. Although not yet fully mature or developed as complete meta-sciences, we can still consider them as intermediary stages in the integration of several dierent sciences in a new area. We can thus presume that this can be identied as the rst sign highlighting a signicant current trend of integration of various disciplines that ultimately may lead towards a single global concept, probably similar to some extent with the Gaia concept [4,5]. It should be clear that, once such a meta-science has been generated, disciplines like economics and sociology will no longer be studied separately or independently, but interdependently and always within the context of their interactive co-evolution with the Planet Earth System. Consequently, in this new context one may expect increased interest and more intense studies in the following possible directions: (1) stimulating knowledge transfer between dierent elds and encouraging pluri- and inter-disciplinary approaches; (2) evaluating the capability of present days methodologies of eciently understanding theoretically and experimentally the transition from part to the whole, from complicated to complex; (3) discovering or inventing new experimental concepts, models, theories, methods and techniques of monitoring and evaluating hierarchical dissipative systems that evolve far from thermodynamical equilibrium; (4) developing and successfully using an educational infrastructure that can ensure the transfer and ltration of information and specic knowledge and know-how. The main target is to educate the new generation and re-educate the cur3

rent one by shifting from the current reductionist paradigm to one related to nonlinearity and complexity. This should result in a better understanding of current phenomena, increased capacity and willingness to assimilate new knowledge and adopt an exploratory frame of mind in order to further generate new knowledge. Therefore, a long-term consequence of such a new educational infrastructure should be the creation and propagation through society of a life-long learning attitude, based on a formal standard education but also including an informal one and a non-formal one as well, while at the same encompassing both localized and delocalized aspects (e.g. e-learning). WIKIPEDIA: Nicholas Georgescu-Roegen, born Nicolae Georgescu (Romania, Constanta, Romania, 4 February 1906; Nashville, Tennessee, 30 Oc tober 1994) was a Romanian mathematician, statistician and economist, best known for his 1971 magnum opus [2], which situated the view that the second law of thermodynamics, i.e., that usable free energy tends to disperse or become lost in the form of bound energy, governs economic processes. His book is considered a founding book in the eld of thermoeconomics. Roegen introduced into economics the concept of entropy from thermodynamics and did foundational work which later developed into evolutionary economics. Also his work contributed signicantly to bioeconomics and to ecological economics. In this paper we explore the vision of Nicolae Gergescu Roegen, who related the economical phenomena to entropy [5]. For this purpose we identify a formal correspondence between economic processes and thermodynamic laws, with heuristic implications for characterizing the dynamics and evolution of economical systems. Based on this formalism we then study the problem of establishing an economical equilibrium in the case of aggregating together initially stable and independent economical subsystems in a nal functional entity, e.g. the set up of the European Communitys economy. Similarly, we intend to extend the physics black hole concept in order to apply it in economy as well. This would be possible by applying to economical phenomena the formalism usually used to model entropic processes. In order to apply successfully such formalism a Thermodynamics-Economics Dictionary would be created, as a clear Table of correspondences between physical parameters and economical ones. This Dictionary/Table would be just one of the dedicated tools and examples proposed in this paper illustrating the capacity of transferring and utilizing knowledge and theories from one initial, well-dened and established, eld (physics, in this case) into the 4

understanding and modeling of another one (economical processes).

Thermodynamics-Economics Dictionary

The thermodynamics is important as a model of a phenomenological theory, one which describes and unies certain properties of many dierent sorts of physical systems. There are many systems in biology, economics, and computer science, for which a similar organizing and unifying phenomenological theory would be highly desirable. Our aim is to present certain features of economics inspired from thermodynamics and viceversa, giving a short dictionary that reect the Thermodynamics-Economics isomorphism. The formal analytical-mathematical analogy between economics and thermodynamics is by now fairly well-known or at least accepted by economists and physicists alike [1]-[14]. In this context, the papers [8]-[13] build an isomorphism between thermodynamics and economics, admitting that the fundamental laws are also in correspondence via our identication. In this way each thermodynamic system is naturally equivalent to an economic system, and the laws in thermodynamics have correspondents in economics. Let us reproduce the correspondence between the characteristic state variables and laws in thermodynamics and economics as was described in [8]-[13] starting from the theory of Roegen [2]. This permits also to include in economics the idea of black hole with a meaning similar to those in astrophysics [11]. TERMODYNAMICS U = internal energy T = temperature S = entropy P = pressure V = volume Q = electric charge ECONOMICS G = potential growth I = internal politic stability E = entropy P = level of prices (ination) Q = production quantity I = total investment

M = total energy (mass) Y = national income (revenue)

J = angular momentum (spin) M = M (S, Q, J) = = TH =

M J M Q

J = economic angular momentum (economic spin) Y = Y (E, I, J)

Y = marginal propensity to spin J Y = marginal propensity to invest I Y E

= angular velocity = electric potential

M S

= Hawking temperature

= marginal propensity to entropy

This correspondence can interchange the structural relations from one discipline to another. That is why, the thermodynamics and the economics are two faces of real-world phenomena. The fundamental Gibbs-Pfa equation of thermodynamics dU T dS + P dV + k dNk = 0 is changed into fundamental Gibbs-Pfa equation of economics dG IdE + P dQ + k dNk = 0. These equations are combinations between the rst law and second law (in thermodynamics, respectively economics). The third law of thermodynamics lim S = 0 suggests the third T 0 law of economics lim E = 0. I0 The process variables W = work, Q = heat are introduced in thermodynamics by elementary work, dW = P dV (rst law), and by second law, elementary heat, dQ = T dS (for reversible processes) or dQ < T dS (for irreversible processes). Their correspondents in economics, W = wealth of the system, q = production of commodities are dened by dW = P dq (elementary wealth in economics) and dq = IdE or dq < IdE (second law or elementary production of commodities in economics). Sometimes a thermodynamics system is found in an external electromagnetic eld (E, H). The external electric eld E determines the polarization P and the external magnetic eld H determines the magnetization M . Altogether gives the total elementary work dW = P dV + EdP + HdM . By a natural way, an economic system is found in an external econo-electromagnetic eld (e, h). The external investment (econo-electric) eld e determines the initial growth conditions (econo-polarization) p and the external growth eld (econo-external magnetic eld) h determines the growth (econo-magnetization) m. All produce the total elementary work 6

dW = P dQ + ede + hdm. The economical elds just introduced are imposed in part by the economic system and in other part by policy makers (Government, public, private rms etc). The long term association between Economics and Thermodynamics may be strengthened with new tools based on the previous dictionary. Of course, this new idea of a thermodynamics-economics dictionary produces dierent concepts as those in econophysics. Basically econophysics looks to built economical notions similar to those in physics [1], [6], [7], as those from economics are not enough, in time that a proper thermodynamics-economics dictionary can permit the transfer of the information from one discipline to another [8]-[13] as pointed Roegen [2].

Equilibrium of European Union Economy

The European Union (EU) is a union of twenty-seven independent states based on the European Communities and founded to enhance political, economic and social co-operation. Therefore we must analyze the equilibrium states after interaction of 27 simple economic systems: R5 , i = dGi Ii dEi + Pi dQi = 0, i = 1, ..., 27. The evolution of each simple economic system can be only 1-dimensional or 2-dimensional manifolds since each 1-form i is a contact form. The best way to analyze the interaction is to consider the product economic system R135 , i = 0, i = 1, ..., 27 and to look for the constrained critical points of some suitable functions. For example,
27

G=
i=1 27

Gi the total growth Ei the total entropy

i=1

E=
27

Q=
i=1

Qi the total production quantity

are very often used in the classical economic literature. The economical equilibrium after interaction states is described by the critical points of one of three functions constrained by the sets of constant level of the other two functions and by 27 Gibbs-Pfa equations i = 0, i = 1, ..., 27. Also, we can extend the study replacing the total growth (total entropy, total production quantity) by a weighted mean. This kind of economical research was in our attention from 2001 [8]-[13]. Theorem. Critical points of the total growth G constrained by E = const., Q = const., i = 0, i = 1, ..., 27 are the points of the manifold R135 , i = 0, i = 1, ..., 27 at which I1 = ... = I27 and P1 = ... = P27 . Proof. Critical points of the total growth G =
27 27 27 i=1

Gi constrained by

E=
i=1

Ei = const., Q =
i=1

Qi = const., i = 0, i = 1, ..., 27

are zeros of the Lagrange 1-form

27 27

dGi +
i=1 i=1

i i + 28

27 i=1

dEi + 29

27

dQi .
i=1

It follows i + 1 = 0, i Ii + 28 = 0, i Pi + 29 = 0, and we nd i = 1, 28 = I1 = ... = I27 , 29 = P1 = ... = P27 . Similar arguments are applied to prove the next two theorems. Theorem. Critical points of the total entropy E constrained by G = const., Q = const., i = 0, i = 1, ..., 27 are the points of the manifold R135 , i = 0, i = 1, ..., 27 at which I1 = ... = I27 and P1 = ... = P27 . 8

Theorem. Critical points of the total production Q constrained by G = const., E = const., i = 0, i = 1, ..., 27 are the points of the manifold R135 , i = 0, i = 1, ..., 27 at which I1 = ... = I27 and P1 = ... = P27 . Geometrically, the set of all critical points is a hyperplane in R135 . Economically, the equilibrium of interacting economic systems can be realized only for equal internal politic stabilities and equal level of prices (ination). Consequently the nonequilibrium in European Community is mathematically obvious and our Gibbs-Pfa economic models are sustainable.

Economic Black Holes

From WIKIPEDIA: A black hole is a region of space in which the gravitational eld is so powerful that nothing can escape after having fallen past the event horizon. The name comes from the fact that even electromagnetic radiation (e.g. light) is unable to escape, rendering the interior invisible. However, black holes can be detected if they interact with matter outside the event horizon, for example by drawing in gas from an orbiting star. While the idea of an object with gravity strong enough to prevent light from escaping was proposed in the 18th century, black holes as presently understood are described by Einsteins theory of general relativity, developed in 1916. This theory predicts that when a large enough amount of mass is present within a suciently small region of space, all universal lines from the space are warped inwards towards the center of the volume, forcing all matter and radiation to fall inward. While general relativity describes a black hole as a region of empty space with a pointlike singularity (gravitational singularity) at the center and an event horizon at the outer edge, the description changes when the eects of quantum mechanics are taken into account. Research on this subject indicates that, rather than holding captured matter forever, black holes may slowly leak a form of thermal energy called Hawking radiation. However, the nal, correct description of black holes, requiring a theory of quantum gravity, is unknown. 9

Some black holes are described using the following ingredients: the entropy S, the mass (energy) M , the electric charge Q and the spin J. 1) Reissner-Nordstrom black hole: A Reissner-Nordstrom black hole is formed from non-rotating but electrically-charged matter. It is characterized by Q2 1 Q2 S = 2M 2 Q2 + 2M 2 1 2 or M = S+ . M 2 2 S 2) Kerr black hole: This model involved 4J 2 + S 2 . S J The extremal limit of Kerr black hole occurs when 2 = 1. M 3) BTZ black hole: It is given by the relations S = 2M 2 + 2M 2 1 1 J2 or M = 4 M 2 M J2 or M = S 2 + 2 . 4 + J2 4S Similarly an economic black hole is a small part of global economic system in which the national income is so powerful that nothing can escape after having falling past the event horizon. It is described in terms of the entropy E, the national income (revenue) Y , the total investment I and the economic spin J [11]. Of course, these models are dierent from what is called usually Economic Black Holes. 1) Economic Reissner-Nordstrom black hole: This economic model is characterized by S=2 I2 I2 1 E+ . or Y = Y2 2 2 E 2) Economic Kerr black hole: This economic model is described by E = 2Y 2 I 2 + 2Y 2 1 E = 2Y 2 + 2Y 2 1 J2 1 or Y = 4 Y 2 4J 2 + E 2 . E

The extremal limit of economic Kerr black hole occurs when J2 Y 2 E=2 or Y = E + . 4 + J2 4E 2 10

J = 1. Y2 3) Economic BTZ black hole: This model is based on the relations

References
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[13] C. Udriste, M. Ferrara, F. Munteanu, D. Zugravescu, Economics of Roegen-Ruppeiner-Weinhold type, The International Conference of Differential Geometry and Dynamical Systems, University Politehnica of Bucharest, October 5-7, 2007. [14] www.complexity.ro/ONCE-CS-RoadMap-V22.pdf; http://www.complexity.ro/ONCE-CS-RoadMap-V22.pdf, 2006.

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