Research Proposal

Research Proposal

Among the social sciences, economics is perhaps the most useful for its applicability in describing the systems by which resources and people interact, yet is also the most controversial and political. The question I plan to address is whether the more objective natural laws of the universe, in particular physics and especially thermodynamics, are at all analogous to the laws of economics, and going further, seeing if such an analogy can provide useful insight on economics.  Both thermodynamics and economics pertain to the ways in which elements of systems interact with each other and the environment, though the former deals with the objective and quantifiable universe and the latter deals with the interactions between people.  The paper would propose that economics is nothing more than the principles of physics applied to human societies, and in addition, once economics is thought of in this way, one can obtain additional and practical insight about the organization of human systems.  

            The first stage of the paper will be to establish the similarity between the two systems. This will be accomplished by first analyzing autonomous systems as described by Johnson, which exhibit organized complexity in that there are simple rules for the interactions between elements (Johnson 203).  Adam Smith’s theories on economics, which is the basis for modern American capitalism (Smith), is a prime example, the many reasons for which will be explored in the paper. There is a natural law, supply and demand, that governs the economy and the distribution of wealth.  This will be compared to the systems described in thermodynamic systems, which too have their own simple set of rules. The paper will briefly summarize these laws of thermodynamics for the purpose of comparison, but will otherwise assume the reader is familiar with the sciences involved.

            While doing so, the paper will then attempt to re-frame Smith’s theories in terms of these thermodynamic laws, leading to the second stage of the paper. Many of the phenomenon described by Stiglitz, Johnson, Lethem, and Smith, can be categorized into one of these more basic laws. Most of these analogies are explicitly reviewed by Saslow, for example, the concept of utility in economics, the measure of an object’s material and subjective worth, is directly comparable to the concept of energy, the ability to do work (Saslow 1240). The paper will briefly summarize these connections. There are other, less obvious and potentially less accurate (the extent to which the paper will explore) connections, such as equation the rate of economic development with temperature (Saslow 1240).

            The third stage of the paper will attempt to glean insight having made this analogy and assuming its validity. The major example the paper will explore is how inequality is therefore an inescapable physical fact of efficient system design, examples of which are amply provided by Johnson, Lethem, and Stieglitz. The Carnot cycle, as shown by Saslow, provides a mathematical justification for how a higher degree of inequality and hierarchical structure is simply more efficient in terms of production.