Entropy, or Why the World as We Know It is Dying
The concept of entropy is one of the most useful terms for understanding just about everything. While it has its origins in natural law — thermodynamics, specifically — the concept holds true pretty much across all closed systems.
In the simplest of terms, every closed system will ultimately degrade toward a state of maximum entropy.
I’ll use the current political system of the U.S. as a convenient example. When American democracy was first shoved out of the nest by the founding fathers, it was new, fresh, and energetic. It took the world’s breath away at its boldness and unlimited promise, and set the wheels turning on tangible change across much of the world.
Before the ink dried on the Constitution, however, the degradation began. From the beginning, the country’s political operations fell into the hands of a strictly limited number of parties, which quickly coalesced into just two. Since then, they have essentially shared power, with only minor differences in policies between the two. Simply, absent a disruptive external force, the closed political system quickly matured into an institutionalized “sameness” that all but assures no serious challenges — leading, ultimately, to the certainty it will degrade to only a shell of its former self.
It was, perhaps, because of his own understanding of natural law that Thomas Jefferson was heard to remark, “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is its natural manure.”
That doesn’t mean I am advocating revolution — just pointing out the fact that any closed system, no matter how well constructed, will degrade. To expect the United States of America to avoid this fate is to expect the impossible.
Switching to a corporate example, I used to be a regular buyer of Toyota cars. They were well made, innovative, and suited my changing needs over the years. And I wasn’t alone — in 2007 they became the world’s largest automobile maker, with a global manufacturing and distribution system that made them appear dominant. Behind the scenes, though, entropy was at work.
In 2008, when the time had come to lease a new car, I reflexively headed over to the local dealer fully expecting to drive off with yet another Toyota, just as I had done several times over the previous decade or more. But as I walked around the showroom, it was impossible not to notice that the company had lost its edge. The cars on offer were not only more expensive than the competition, but even the newest models had that “so yesterday” look about them.
Surprising even myself, I walked out and ended up leasing from another company. I remember vividly at the time saying to my wife that we should short Toyota’s stock. Of course we didn’t — but if we had, it would have been a good play, as you can see in the chart of the company’s stock price here. Note that Toyota’s share price peaked in 2007, almost concurrently with it becoming the world’s largest car company.
As I said at the onset, you can see entropy at work in virtually every closed system. Consider the U.S. dollar, which became the world’s de facto reserve currency as a result of Bretton Woods. What an amazing advantage for the United States — this unique ability to provide the world’s central banks with their primary reserve component! And to have all the world’s commodities dealt in dollars. In short, the dollar became the centerpiece of the global economic system.
It was, of course, damned to entropy, with Nixon’s ending the dollar’s gold backing just being part of the natural progression. And if he hadn’t done it, one of his successors would have — due to some “emergency” or as a “temporary” measure, or some other flimsy political cover. Regardless, the degradation of the currency gained speed and, systematically, it’s been all downhill since.
You may also want to think about entropy when pondering the Chinese miracle. No question, China is having a heck of a run. As James Quinn writes in his article “Is China’s Recovery a Fraud?” in the February edition of The Casey Report, in 1970 that country’s GDP was just $92 billion. Today it is $4.9 trillion!
“Unstoppable!” cheers the punditry. The Chinese leadership, whose capable hands are very much on the levers of the macro-economy, are cut from special cloth, they add.
In answer to that, Quinn points out that despite China being an export-based economy, purpose-built to supply goods to a U.S. population engaged in a mad rush to spend themselves into debt and default — which is to say, an economy now only a memory — there is currently 30 billion square feet of commercial real estate under construction in China.
I’m not sure if bowling is popular with the Chinese, but with all that spare space, some enterprising individual might want to consider promoting it as the coming thing. Roller rinks? Indoor laser tag centers?
Meanwhile, back in the U.S., we the people are no longer content with a free-market system that embraces periodically burning down the house in order to rebuild stronger and better — a system which has been proven to create wealth, and lots of it. Instead, we are hell bent on adopting the closed economic system of a socialist model where everything and everyone is tightly controlled.
On that point, a recent article in the Wall Street Journal titled “No Exit in Sight for U.S. as Fannie, Freddie Flail” sheds light on the continuing degradation in the free market that used to underpin the nation’s hugely important housing sector…
Fannie and Freddie, for their part, remain at the core of a housing-finance system that inflated a dangerous housing bubble. After prices collapsed, sending shock waves around the world, the federal government put America’s housing-finance system on life support. It has yet to decide how that troubled system should be rebuilt.
On Dec. 24, Treasury said there would be no limit to the taxpayer money it was willing to deploy over the next three years to keep the two companies afloat, doing away with the previous limit of $200 billion per company. So far, the government has handed the two companies a total of about $111 billion.
Can’t you just smell the entropy? The results are not just predictable, they are evident — just look around.
As investors, it is, I would contend, important to understand the notion of entropy — and to watch for it in your portfolio companies, in your bureaucracies, and, on a more personal level, your relationships and your health. On that last point, the human body is very much a closed system and so, as we all are too painfully aware, will degrade until it ceases to exist.
You can slow the degradation by taking care of yourself. But it’s also worth remembering that it’s a one-way slope, so enjoy yourself while you are fit and able to.
Regards,
David Galland, The Casey Report
for Whiskey & Gunpowder
March 10, 2010
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This is a very interesting metaphor/analogy and nicely done. Of course, there are really very few “closed systems”, I would think, so there is a lot of “thought problem” stuff to this—-especially in applying entropic thinking to a biological system, which is almost “to boldly go…”. If I get to pushing up daisies before you, DG, you can give me the “I told you so”, fair & square!
Having majored in chemistry at the university, I became well familiar with the idea of entropy. Every professor without exception clung rigidly to the “fact” that heat moves from a high concentration to a lower state without exception. That is, the Universe will continue to perpetually cool, move towards absolute zero and die a heat death.
The idea of my (billions of years from the then ‘now’..) certain death by the Universe freezing me a few billion years into the future just did not go down very well at all. I balked at the idea of entropy and I still do.
Here is why
Since that time forty years ago, astronomic physicists have brought forth the theory that the Universe we see today began with a BIG BANG. Further, they theorize that just before the BIG BANG, all the matter in the Universe was compressed into a single point.
After twenty years of contemplating that “single point”, I am still unable to wrap my mind around it. There sure is an awful lot of stuff (matter) in the Universe, for it to all fit into a single point!
MY ENTROPY EPIPHANY
Now, if the Second Law of Thermodynamics (entropy) is true every where in the current Universe, and has always been, then shouldn’t the Universe have run down many, many billions of years ago, even before the BIG BANG? If so, then why am I here?
The greatest mind boggling questions that ever came to me occurred just a few days ago. I have named that event my entropy epiphany.
If I accept the Second Law of Thermodynamics as a true and inviolable “LAW” any where, every where and for all times sake in the Universe, this mind then begs to ask the following rational questions:
Was there entropy before the BIG BANG?
Did some Thing run DOWN TO…the BIG BANG?
And immediately thereafter the Universe ran back UP?
Was the BIG BANG the “heat death” of a prior Universe?
Was that prior universe simply obeying a more powerful Law, the First Law of Thermodynamics? that of matter and energy being conserved forever, and thus never wasted nor lost?
The only peace I have acquired on these questions has come from the works of Lucretius and Dr. Walter Russell.
Lucretius expressed the idea that the Universe is timeless, and has been here forever. He postulates, “Otherwise it would have collapsed billions of years ago.”
The illumed Dr. Walter Russell said the Universe “breathes in and breathes out”, just as all life on Earth does. It expands and contracts in a perpetual cycle over periods of time unimaginable by the minds of men, ad infinitum.
I say those two fellows got it right! Now I sleep very well each night, knowing I will be warm once again, when the Universe comes back to today.
Life is certainly fascinating. My friend, David, majored in Chemistry and has turned Philosopher on us. I majored in Philosophy and am taking a break before writing a companion piece–not, fortunately, about Chemistry. Theology from physicists always baffles me. If there were ever an idea that sounds as though it came from particularly backwards aborigines, it has got to be the “big bang” theory, with the Big Endians and the Little Endians. The Big Endians pontificate that the universe burst into being, passing lightly over where the matter, antimatter, and the Laws of Thermodynamics came from. The Little Endians recoil in horror, exclamining, “Oh, no, you have it all wrong! There WAS a universe before but it all got compressed into this bitty pea sized bit and THEN it exploded.” Where did the old universe come from? What scrunched it all into a very heavy marble? We call this “science?” The simple, cheering truth is that some things are unknowable, and frequently not worth knowing. How many grains of sand are there on the beach at Waikiki? I neither know nor care, and it changes as tides ebb and tourists go back to their hotels carrying grains away stuck in aila nui, aka coconut oil. At any given time there does exist a discrete, theoretically discoverable, number of grains of sand on every beach…but what would we do with that knowledge if we had it? I have always had an odd compulsion to count raisins when I eat them, something I do not do frequently. That represents my sole concession to wanting to know the knowable but trivial, and I have no idea why I do not count grapes, which have the potential to become inscipient raisins. I’m more inclined to think we should concentrate on the fuel needed to build up heat to dissipate…such as how to have the Bull market necessary before the entropy of a Bear market can come into being. Then we can contemplate the notion that for every action there is an equal but opposite reaction. Good article, David G, good response, David F, and I was ready for a break like this, even if I didn’t go “professional” on you by saying “It is not the case that…”
David, human history shows our infinite capacity to adapt to change. Yeah, Entropy happens. It is how we respond to it that matters most. Your response to the signs you saw at the Toyota dealership is a classic example. You sensed the entropy and made a choice to adapt to the circumstances. In the bigger picture, all around the planet the human race struggles with the monopolist tendency to concentrate power in corporations or governments. When these concentrations of power are no longer viable, people either find or develop the tools they need to leverage a new system into being to insure their survival.
I have cited entropy as the fate of humans as we age. We retire and our interests and contacts of our prfession disipate. we may move to a friendlier climate, our old friends and familiar places of retail and services are changed our church is different. We become less physically competent, diminishing our participation in sports or walking or dancing. Less energy for yard and home care. our families are scattered and still important but not as demanding of our time and attention. Our participation in previously important activities gradually diminishes. Reading, the TV. and computer time is much more handy and comfortable. If still married, You and your spouse spend more time together, but it is not really the shared time as before. You each do your own thing for the most part. If illness strikes, as it often does to the elderly, the concentration becomes more intense. Soon you find that most of your thoughts and activities are centered on the needs of you and your spouse. This continual decline in outside contact leads to entropy. It is your needs that dominate your thoughts, whereas at one time you
were known for your concern of the needs of others. A sad result of this is that when you need help and love and consideration the most, the self centered state repels family and friends. peronal entropy is displayed in any nursing home where patients sit in wheelchairs waiting for mealtime. I have experienced and observed this phenominon for years. I strive to not succumb to it.
I couldn’t help but think of this extraordinary poem by Dylan Thomas:
DO NOT GO GENTLE INTO THAT GOOD NIGHT
Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.
Though wise men at their end know dark is right,
Because their words had forked no lightning they
Do not go gentle into that good night.
Good men, the last wave by, crying how bright
Their frail deeds might have danced in a green bay,
Rage, rage against the dying of the light.
Wild men who caught and sang the sun in flight,
And learn, too late, they grieved it on its way,
Do not go gentle into that good night.
Grave men, near death, who see with blinding sight
Blind eyes could blaze like meteors and be gay,
Rage, rage against the dying of the light.
And you, my father, there on the sad height,
Curse, bless me now with your fierce tears, I pray.
Do not go gentle into that good night.
Rage, rage against the dying of the light.
It seems to me that entropy does not apply to the world of ideas, but only to the physical world, and that available energy supplies are so vast in human terms that entropy is only something to take into account and not something to fear, that is, unless you have forgotten to take it into account. Life in general, and especially the human spirit, exhibit non-entropic behavior.
Dude:
This place is dead, it just doesn’t know it yet.
Even a violent revolution won’t help; Americans are stupid, clueless lemmings who are getting what they deserve.
Aaaah, Bill, thanks. We needed to be reminded to rage–constructively, of course–against the dying of the light. And your second comment is superb. George…your group meets on another web site.
Entropy does not apply to human behavior. There has been a lot of effort to make human behavior subject to scientific principles, such as social darwinism (now discredited) and free will (still hotly debated). It certainly would be nice if they could find a logical basis because that would make it a lot easier for certain people to control humans. Sorry, human behavior is spiritual. I know that is a nasty word these days; some people go into apoplexy at the mention of “spiritual”. But there it is. Science is anything that can be measured. Anything that can not be measured is spiritual.
Bill, good idea, but a wrong one.
Your “world of ideas” is called “information theory”. It’s not non-entropic — it’s anti-entropic.
Thermodynamics conteplated impact of information on entropy has been contemplated for the last 150 years, to some astonishing results.
Look up Maxwell’s demon.
Information accumulation is but one way for humanity to reduce entropy. History will show if it’s a sufficient compensation for increasing entropy in observable things.
That’s a crumby job for a demon, even if he gets a fancy braid-encrusted door man’s uniform. Let’s try thinking of this in terms of order vs. chaos. Chaos cannot destroy order other than in specific instances, but it can certainly make it miserable. Order cannot stop chaos, but it can contain it in part. I’m with Jewels (and Robert Heinlein) in feeling that if you cannot measure it, it isn’t science. Everything left cannot be subsumed under “spiritual,” but no one ever said the world is a tidy place. We’re on very tricky ground, people, because just over the hill lies having to discuss “good” and “evil,” and we need to get back to contemplating the unraveling of the fiat currency system. Either that or go watch “The Never Ending Story” and hope the little princess finds a warrior lad…