Cybernetics, economics, thermodynamics and information

4 min read

I had a really thought-provoking visit to Liverpool last Friday to talk with Mark Johnson and visit the Stafford Beer archive at the Liverpool John Moores University. That left me thinking about organisational cybernetics and the Viable System Model but also prompted much discussion about the use of machine learning with Adaptive Comparative Judgement – more of that later.

A lot to think about, and a lot to read.

But early this morning I started to think about Steve Keen, the post-Keynesian economist. It had been at the back of my mind that – and this is probably because he frequently references Hyman Minsky’s economic instability theory – Steve Keen’s approach is based on dynamic systems.

It was before 5 AM that I began searching YouTube for some of Steve Keen’s lectures. And there it was a reminder that his approach is underpinned by dynamic systems and though he doesn’t reference it, cybernetics. My recent introduction to economics has been through Modern Monetary Theory (MMT). Which is a very useful way of understanding the economy through a combination of sectoral balances and the circulation of government-created money. It is a very valuable framework for understanding money, finance and tax, but where I think it has limitations is in its lack of sociology and political praxis. And importantly it is not underpinned by the philosophy of dynamic systems, though it does model the behaviour of economic systems very effectively but in specific conditions. Steve Keen’s dynamic systems approach is a more sophisticated model but does not deny the validity of MMT.

As I was thinking about economic modelling from a dynamic systems approach while I was listening to Steve Keen’s lectures, there came a point in 2016 where he began to introduce energy into his modelling. That output is not just a function of labour and capital, but a function of labour, capital and energy. This at once does two things it introduces the first law of thermodynamics into his economic analysis but also incorporates environmental issues i.e. the use of resources.

The first law of thermodynamics states that in a closed-system (and Keen points out that there are a number of closed-system models in economics), energy can neither be created or destroyed. In cycles of production, therefore, we must constantly input energy. This is overlooked by economists according to Keen.

In more recent work, Steve Keen has introduced the second and third law of thermodynamics. He points out that these truly are physical laws unlike laws that are proffered in the social sciences. The second law states that in a system entropy is always increasing. Entropy is a measure of disorder; it is the number of possible states that each element in that system can be in. Thermodynamically, this can be interpreted as the transfer of ‘useful’ energy or work like mechanical energy into heat. It’s a slippery idea, I know. But it can be thought of as a shift from order to chaos. Information theory characterises information as ‘negentropy’ – the information is creating order. Information is an ordering process.

The following is a speculation then – a hypothesis:

  • in any production process – whether that be physical, or the provision of services – then energy is wasted (by releasing it as heat). And while entropy might be reduced (as the ordering process of production) within the waste, entropy is increasing.

Bringing these together then we have the possibility of bringing together economics, value theory, environment (climate change) and information (technology and platform capitalism).

Is consciousness – by that I mean self-awareness or even life – counter entropy? Is life the means by which order (information) is created? Is life the cybernetic response to an expanding universe?



1 Comment

  1. OurSun’s nuclear energy falling on Earth over billions of years caused negentropy … Earth’s Organic Biological Life .
    Consciousness is another , maybe related issue , often referred to as ‘The Hard Problem ‘
    Who is to say the Sun is not ‘ alive ‘ as it too has been subject to negentropy for eons ? It has complex cycles and a complex electro-magnetic structure.
    And hence it may even be conscious ?

    So providing a mechanism for personality being affected by the phase of OurSun a human embryo grew under in the womb?

    Consciousness is an issue addressed by Proof.Rupert Sheldrake in his theories of Morphic Fields and Morphic Resonance .
    He is a Scientist a plant biologist.
    YouTube the Science Delusion .
    He was a don’t in Cambridge University.

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