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- W2523201312 abstract "This chapter begins with a review of the state of neoclassical economics, insofar as it deals with energy. The main point is that useful energy (exergy) is an essential ingredient in the formula for economic activity, especially growth. Conventional neoclassical theory asserts that the only two “factors of production” are capital and human labor, and that raw materials are “produced” by some combination of capital and labor. Of course this is literally impossible, but the impossibility is avoided by asserting that the process of “resource extraction” is a “value-added activity”, where the value is added by the combination of capital and labor. This is an accounting trick, because both capital and labor are unproductive without an exergy input. So energy (or work) must be a third factor of production. This being so, social stability depends on growth (for now, at least), future economic growth depends on the availability of exergy. But long-term environmental sustainability also depends on decarbonization. The good news is that decarbonization will employ a lot of capital and labor, which promote growth. But the investment must be seen to be profitable. Fortunately this is possible." @default.
- W2523201312 created "2016-09-30" @default.
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- W2523201312 date "2016-09-23" @default.
- W2523201312 modified "2023-09-28" @default.
- W2523201312 title "Gaps in Mainstream Economics: Energy, Growth, and Sustainability" @default.
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- W2523201312 doi "https://doi.org/10.1007/978-3-319-38919-6_3" @default.
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