Organisation and dissipation in economic systems

This paper examines physical aspects of economic activity, particularly the relationship between economic ‘organisation’ and energy use. The properties of general dissipative systems are explored and the possibility of such systems becoming more organized over time is examined with reference to the second law of thermodynamics and the ‘evolutionary arrow of time’. It is argued that if a physical viewpoint is taken, economies can be considered as self-organizing dissipative systems. Measures of organization and dissipation are proposed and empirical analysis indicates that organization and energy dissipation increase together for economic systems, and there is weaker evidence that energy ‘efficiency’ also increases with organization.