3 ms·
A little OT but the connection will be apparent at the end. I had this interesting idea of "economic entropy". In analogy with statistical physics, a macrostat
by js8 7y ago
A little OT but the connection will be apparent at the end.
I had this interesting idea of "economic entropy". In analogy with statistical physics, a macrostate is what and how much is produced by the economy (consumable commodities), and a microstate is how it is produced (all the intermediate supply chains). So to one macrostate can correspond a large number of microstates, logarithm of number of which is the entropy of the macrostate.
Now assume we have two completely independent (not involved in trade) economies, and each of these is in some macrostate and with the corresponding entropy. And we enable the trade. Then over time, we might end up in the same macrostate (they together still produce exactly the same amount of goods), but now the entropy of the entire system is much higher, because there is much more possibilities of how the supply chain works (they are not confined into one of the two previous economies).
Now imagine that for some reason, cost of travel and transportation is really economically negligible. Then microstates with long path of transport for products correspond to same macrostates as those with short path of transport for products. Even more, they will be statistically favored, since global economy has high entropy.
In practice, the high entropy state looks like: You have several multinational companies with sites in the same city, and their executives fly around the world to convince other executives of multinationals to buy their products (be part of their supply chain). The corresponding low entropy state would be that each city has its own set of companies, which all together form a single supply chain.
The point is, historically, we came from low entropy state into a high entropy state, and we are now screwed. We know the low entropy state would be more efficient, but we have no idea how to get there. But getting there would greatly reduce transportation, which is one of the biggest contributors to CO2 emissions.