On Paul Samuelson

“The key to the comprehension of Samuelson’s meteoric rise in the economics profession was his knack for evoking all the outward trapping and ornament of science without ever coming to grips with the actual content or implications of physical theory for his neoclassical economics” (Mirowski, 1989, p. 383).

The following quote from Samuelson’s Nobel lecture is quite representative:

There is really nothing more pathetic than to have an economist or a retired engineer try to force analogies between the concepts of physics and the concepts of economics. How many dreary papers have I had to referee in which the author is looking for something that corresponds to entropy or to one or another form of energy.

In the very next paragraph, however, Samuelson found an analogy himself.

However, if you look upon the monopolistic firm hiring ninety-nine inputs as an example of a maximum system, you can connect up its structural relations with those that prevail for an entropy-maximizing thermodynamic system. Pressure and volume, and for that matter absolute temperature and entropy, have to each other the same conjugate or dualistic relation that the wage rate has to labor or the land rent has to acres of land.

Life systems are non-equilibrium thermodynamic systems. The current dominant economic theory is a general equilibrium theory. Social systems are a special case of living systems. When a theory about a special case is inconsistent with a general foundation, either the general foundation or the special theory is wrong. So far, economists have not challenged the validity of the non-equilibrium thermodynamic theory of life systems. We have shown that an analytical theory of economics can be directly derived from basic physical and biological principles. By this, we hope to establish social sciences as an integral part of physical and biological sciences.