| Abstract |
We are witnessing a growing expectation of unexpected economic changes, which are the result of new technologies, demographic and climate change on the one hand, and the cause of new dynamics in the organization of human society on the other. The growing unpredictability of developmental outcomes increases the "fear of the future". This opens a wide communication space in which the criteria for distinguishing prophetic visions from real facts, conspiracy theories from scientific evidence, and ideologized perceptions from objective reality are yet to be defined. The search for valid criteria, if we are to avoid the saying of the sceptics - "may I have lived in interesting times" - should begin with a logical sequencing of questions and answers that make sense of the exciting confusion we are in, otherwise called life. Without the illusion of a holistic approach, we can highlight three specific issues characterized by the multiplicity of acceptable answers: the stability of economic activity and the possibility of unlimited economic growth, the need for human labour and productive employment in the face of emerging technologies, social stability, or the distribution of benefits from economic activity and economic growth. It is no novelty that our fascination with new technologies (almost as much as our fear) will significantly affect our expectations for the future. The "new" novelty is mostly twofold. Firstly, the full digitalization of communications and the automation /robotization of production and service processes managed by artificial intelligence almost vividly displaces everyday human work, making it redundant in securing our physical existence, thus posing the questions, What will people do when they no longer have to work to survive? What will be the motive when there is no "fear of hunger"? Secondly, what will happen to our life span when put into the perspective of synthetic biology (artificial life) and 3D printers on the one hand, and nano/picotechnology on the other that will allow our cells to be "endlessly" regenerated and restored. What will propel us when we will be able to "live forever"? New technologies continuously raise the question of the ability of the dominant (neo)classical economic paradigm to scientifically explain and shape new technologies into an effective social organization of economic activity and its growing equilibrium functioning. Thus far, it has survived numerous challenges, mainly for two reasons. First, because alternative approaches have generally concentrated on exploring and demonstrating the weaknesses of the (neo)classical model, without offering a consistent and complete alternative pattern. Second, because such critiques have essentially aided its correction, identifying its weaknesses, which could then be remedied. By turning part of the critique into "special" cases of the general equilibrium model, the neoclassical pattern obtained additional consistency and strength of scientific interpretation. The whole story has so far functioned on the principle of the second best solution, "While there is no better, the one we have is good enough." The alternative, which began to emerge more strongly in the late 20th century, is interesting in the attempt to change the issue that is the subject of discussion. Bypassing (neo) classical strongholds in utility, marginal cost/yield, supply, and demand, it moves towards its "origin/source". The (neo)classical approach has its stronghold in Newton's laws of mechanical motion, by which every action has an equal and opposite reaction, automatically disrupting and restoring the universe to equilibrium. Here, all processes are reversible (there is no loss). Equally, the invisible hand automatically brings the market back into balance through the interactions of supply and demand. The "new" economy changes the research question, replacing Newton's laws of mechanics with the laws of thermodynamics. The experimentally proven natural movement of physical bodies from warm to cold results in the disorderly movement of molecules resulting in the loss of energy, suggesting that the processes are partly irreversible. This observed entropy "translated" into the world of economics means that there can be no automatic return to equilibrium because rapid economic growth results in the irreversible loss of resources in the foreseeable time (non-renewable resources). In this setting, many attempts have been made to design alternatives, such as the circular economy, bio-economy, green economy, sustainable economy. They share an opposition to entropy, the "economics of decoupling", that separates economic growth from the growth in the use of non-renewable natural resources. Each alternative differs according to variants/models of entropy reduction, or models of decoupling economics. In this paper, we focus on growth issues in the context of a transformed understanding of resource constraints. Mainstream economic theory, or A. Smith's "classical" economy, emerging from Newton's theories of physics and mechanics, has faced numerous challenges since its onset, from Marxism, Keynesianism, Structuralists, Institutionalists, Historical school, to the Neo-Ricardians in the mid-20th century. Among these challenges, through which the classical economy, together with the neo-classic as its "modernized" variant, has more or less successfully survived, the neo-Ricardians are particularly intriguing. Instead of different/new answers to the questions asked, they simply changed the questions. Despite ignoring the "set smile" of the dominant mainstream economy, the altered patterns of neo-Ricardians is a constant thorn in the side of the neo-classics, not unlike a pebble in one's shoe. However, this pebble is soon to become a rock of the "new" economy. It also shifts the issue by focusing on growing "negative" externalities, such as the costs of energy entropy, as by disrupting the global ecological balance, the very survival of life on earth is jeopardized. Assuming that classical economics cannot even see a pattern that changes economic behaviour, the new economy tries to ground itself in the laws of thermodynamics. In doing so, it is assumed that A. Smith (and his followers) was, in fact, fascinated by Newton's law of mechanical motion of the body (for every "action" that drives a body from equilibrium, there is a reaction that restores that body to balance). In Newton's universe, all mechanical processes are reversible (inverse) because for every +T there must be a -T. Classical economics, without taking time into account, has found a foothold here. Just as the universe, that once launched functions automatically like a well-oiled clock, so does the market. While God is the force that propelled the universe, the human selfishness and unquenchable drive for betterment is what drives the market. Just as the laws of gravity rule the universe, so does the "invisible hand" rule the market. Referring to Newton's remark that "every action causes an equal and opposite reaction", the "classics" claim that the same principle applies to the market. Supply and demand are constantly responding to each other, adjusting to one another until they reach equilibrium. The "new" economy draws attention to the small matter of the classical economy. Looking at the real world, we see how energy and raw materials/products are transformed into inputs, transformed into products that are used and then discarded. In the real world, economic activity is largely "irreversible". Once used, the product (mostly) no longer returns to economic activity due to entropy. And the laws of thermodynamics speak of entropy. This is why the "new" economy originates from the laws of thermodynamics instead of Newton's laws of mechanics. It should be noted that the outcome of the collision of the (neo)classical economy and the economy of decoupling is not certain. Lately, there have been loud expert debates about the meaning and impact of entropy, which may be related to the withdrawal of the United States, the world's largest energy user and greatest polluter, from global agreements to curb greenhouse gas emissions. This time the battlefield is (energy) entropy, so it will be interesting to just how many of its nine lives the neoclassical "cat" has used. |