System of Accounts for Global Entropy-Production (SAGE-P): The Accounting in the Topological Domain Space (TDS) of the Econosphere, Sociosphere, and the Ecosphere

Anthony Friend

Chapter 2 in Sustainability Analysis, 2012, pp 25-51 from Palgrave Macmillan

Abstract: Abstract The value conserved in the entropy-production matrix of the System of Accounts for Global Entropy-Production (SAGE-P) corresponds to the flow of services from the consumption of economic objects. Boulding (1949) pointed to the desirability of governments’ designing policies which maximize the service flows (benefits) and minimize the entropy production (cost) of the national economy with the argument that “It is not the increase in consumption or production that makes us rich, but the increase in capital, and any invention which enables us to enjoy a given stock of capital and a smaller amount of consumption and production, out-go or income, so much the gain.” Boulding clearly saw that the objective function of economic policy is to maximize the flow of service income from capital rather than money-income from production. Today, with macro-scale production, efficiency in the use of economic, social, human, and natural capital underpins sustainability but is rarely practised. On the contrary, conserved values-in-exchange dominate the assessments of economic performance, like Gross Domestic Product (GDP). Conservation, the protocols for the survival of future generations, cannot be assessed in accumulative values of money-income, the cardinal measure of GDP, but by qualitative assessments of service flows, the ordinal measure of GDP.

Keywords: Gross Domestic Product; Entropy Production; Complex Adaptive System; Ecological Economic; Cardinal Measure (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1057/9780230362437_3

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