Nicholas Georgescu-Roegen

Eyeless in Gaza[1]

 

            He caught the economics profession off guard by coming in the front door.  Georgescu-Roegen, with credentials in statistics and mathematics, participated during the 1930s in the heavy undercurrents of the Viennese sort that would, in time, surge over the Keynesian preoccupation to dominate the profession.  His earliest output on statistical methods, on the pure theory of consumption, and as late as 1951 on the aggregate production function in the light of von Neumann, were the stuff on which orthodox reputations were feeding.  Weariness set in long before old age.  In his fifties he made his dissenting nature clear, attacking the neoclassical distribution of income as a flagrantly inadequate theory, dovetailing with Piero Sraffa’s revival of the old classical outlook rooted in class struggle.  He thereby added fuel to the fire out of Cambridge University that would constitute the Two Cambridges capital controversy of the 1960s, long since swept under the rug by the economist Mandarins, where it still smolders sullenly.  Nothing so disfigures the neoclassical vision than the infantile notion that the difference between rags and riches can be explained in equimarginal language.

            Georgescu-Roegen would reject the immortal consumer.  He found the efficient allocation across generations to be a false claim for the price mechanism.  His most telling criticism of the Standard Model was on its distributional apparatus.  This explains his fascination with Heinrich Gossen as late as his 1983 introduction to a translation of Gossen’s 1854 anomalous and unreadable book that unearthed the consumer equilibrium and foreshadowed the functional distribution of income among the production factors (rather than via the bitter class struggle).  However, Geogescu-Roegen would move away from distributional concerns to criticize instead the long-run growth models of the mainstream.  During the late 1970s, relying upon the second law of thermodynamics, he raised disquieting questions about the credibility of neoclassical growth models and made his anti-scholastic attitude clear in an article on methods.  He carried the entropic theme into 1980s publications.  Thereafter, his life’s work receded into autobiography. 

That he made so much of the law of entropy should not be confused with the trivial scientism that equates economic problems with engineering analogues.  While it is true that his readers were assumed to be scientifically literate, particularly in physics, his economic vision was historical, dialectic, and organic.  He even called it bio economics.  His use of entropy came from the necessary fact that modern economies, based on fossil fuels, are not sustainable.  Sooner or later they must collapse unless forever-sources of energy can be discovered.  He is skeptical that such sources exist, growth economists being like the science fiction writers who invent faster-than-light warp drives, etc., to get around the galaxy and allow their various fantasies to come into play.  The golden-age of the steady-state economy simply cannot come about by continually reproducing itself as the theory implies.  Such a model fails without the assumption of facts not in evidence, viz., infinite energy resources.  Therefore, growth models of maturely affluent societies in a Methuselah-like equilibrium depict an impossibility if resources are finite.  Any economy must in the long term collapse upon itself like a burned-out star.

Are we thereby taken back to the days of the dismal science, as economics was called under the blue light of Malthus and Ricardo?  That depends first upon how long the lead-time may be before the exhaustion of geologically stored energy sources.  The usual problems addressed by economists imply that economics concerns tomorrow morning’s breakfast, not exigencies of the fourth millineum.  Even so, with the exponential growth in the demand for energy, it may be later than we think.  Plausibly, secular survival depends finally upon whether “forever” energy sources, e.g., solar, geothermal, atomic, hydrogen, etc., can ever be handled by technology in an economic form.[i]  At any rate, the static-state mature economy can only exist if such sources can be effectively tapped.  A village by a waterfall could last as long as the falls if the villagers practice birth control.  Not so the world economy.  Agricultural sources of energy, or tricks like reaping the wind and the rain may not be enough for that golden age of global economics.  Georgescu-Roegen has added one more peril to the numerous indications that human existence is a contingent affair.

He was on the fringes of the Post-Keynesian point of view, so long rejected in Stockholm.  Because of that, the Georgescu-Roegen disturbance could not be handled simply as logical dissent based on realism and plausibility.  Rather his work had to be despised as bogus economics in spite of a certain following within the ranks.[ii]  Since an engaged refutation would have given him too much recognition, the proper treatment was to ignore him in spite of the embarrassing inconvenience that anyone could be so wrong so well.  Within another paradigm, Werner Sombart could refer to Heinrich Gossen as an “ingenious idiot,” which in fact he was.[iii]  In choosing the Nobel exemplar, a similar but inaccurate assessment directed toward this or that awkward exclusion of an eloquent outsider such as Georgescu-Roegen must often repeat itself in Sweden.

           



[1] Eyeless in Gaza is the title of an Aldous Huxley novel.  Those who know the Bible will recognize the reference to the captive Sampson.  The symbolism for Georgescu-Roegen is left to the reader’s imagination.


[i] The most highly optimistic view, based on hydrogen, may be found in Rifken, Jeremy, 2002.  The Hydrogen Economy, Tarcher/Putnam, New York..

[ii] See Blaug (Blaug, Mark, 1985.  Great Economists Since Keynes, Cambridge University Press, Cambridge; see alsoas Beaud & Dostaler (Beaud, Michel & Gilles Dosteler, 1997.  Economic Thought Since Keynes, A History and Dictionary of Major Economists, Routledge, New York.  Originally, La pensee economique depuis Keynes:  Historique dt dectionnaire des pricipaux auters, Seuil, Paris, 1993.  Both of these respected sources pay homage to Georgescu-Roegen as among the finest since Keynes.  Also I remember the high regard in which he was held by one of my professors, George Zinke, and the pro Georgescu-Roegen line of thought that crops up among competent economists, e.g., Miernyk, William H., 1982. The Illusions of Conventional Economics, West Virginia University Press, Morgantown.

[iii] As quoted by Henry Spiegel in The Growth of Economic Thought, Prentice Hall, Englewood Cliff, NJ, (1971), page 513.