Pope Francis would love the obscure theories of this dead Romanian economist

What does he really know?
What does he really know?
Image: AP Photo/Alessandra Tarantino
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With his sweeping June encyclical on the world’s environmental crises, Pope Francis gained many new fans outside the Catholic faith.

But his grasp of economics came under fire from pundits and politicians on both the left and the right. Their dismissive tenor was conveyed succinctly by Republican presidential candidate Jeb Bush (a practicing Catholic), who said, “I don’t get economic policy from my bishops or my cardinal or my pope.”

Laudato Si reads like a point-by-point indictment of our modern paradigm of endless, unquestioned economic growth, leading public figures like Bush to ask if Francis should stick to theology and leave economics to the professionals. After all, though he trained and worked as a chemist for a few years, as far as we know, he never studied economics formally. So where did his bold views on the economy come from?

When read closely, Pope Francis seems to be channeling one of the 20th century’s most brilliant, if overlooked, economic thinkers in Laudato Si.

The work of Nicholas Georgescu-Roegen, an expert in mathematical statistics who started his life in Romania in 1906 and ended it in comfortable obscurity at Vanderbilt University in 1994, is echoed to a remarkable degree in the Pope’s encyclical. Georgescu-Roegen is nowhere to be found on most economics syllabi today, but he was regarded as a prodigious talent by some of the founding fathers of mainstream neoclassical economics.

Joseph Schumpeter (who coined the term “creative destruction”) mentored Georgescu-Roegen at Harvard in the 1930s and tried to recruit him to its faculty, hoping to write a new theoretical treatise with him. Paul Samuelson—Nobel Prize winner, author of the all-time best-selling economics textbook and generally acknowledged “Father of Modern Economics”—was in awe of Georgescu’s intellect, calling him a “great mind” and a “scholar’s scholar, an economist’s economist.” Georgescu made a number of original contributions to economic theory, but his biggest idea by far was applying the hard truths of thermodynamics—entropy, especially—to the increasingly utopian practice of the “dismal science.”

Georgescu articulated a kind of economics in which physics mattered. His 1971 book The Entropy Law and the Economic Process described in rigorous, mathematical detail how humans’ economic activity led to inevitable “environmental degradation.”

“An unorthodox economist—such as myself—would say that what goes into the economic process represents valuable natural resources, and what is thrown out of it is valueless waste,” he wrote. (Compare this to the Pope’s own formulation: “The Earth, our home, is beginning to look more and more like an immense pile of filth.”)

This trend is the inevitable consequence, Georgescu said, of the second law of thermodynamics, which he paraphrased thus: “In nature there is a constant tendency for order to turn into disorder.”

Of all the laws of physics, this one has the highest buzzkill quotient. It states that entropy—a measure of disorder—in an isolated open system is always increasing. This means that we can apply energy to increase the order within a closed system—whether it’s the intricate circuitry within the gleaming casing of an iPhone, or the complex cellular arrangements within the skin of our bodies—but in doing so, some energy will always be lost as waste heat.

It can never be recaptured and reused. The resulting disorder is offloaded to the universe at large. The world tends toward chaos in an irreversible process. It’s all a major bummer.

Georgescu drew on his technical expertise to show how the economy—being, you know, a part of the physical universe—is not exempt from this rule. Economic activity basically means gathering materials and using energy to create useful products and services. It churns out two by-products: human satisfaction (ideally) and pollution. And the latter, The Entropy Law tells us, is unavoidable. Everything is moving from low entropy to high entropy conditions.

Georgescu argued that limits to economic growth were, in fact, baked into the physical world. And that—in an analogy that Francis would appreciate—modern economics mistook the real world for the “Garden of Eden.” Most mainstream economists assume that we can overcome the finiteness of available useful (low entropy) resources with technology as we run out of useful inputs. In their models, (high entropy) pollution is a mere “externality”.

For Georgescu, this techno-optimism was a laughably “blunt form of linear thinking.” Far from being external or peripheral, waste was central to his idea of where we’re headed as a species. It matters a great deal, as he liked to point out, that you can’t burn the same lump of coal twice. The upshot of Georgescu’s account is that we only get one shot at this, so we better make it count.

Because entropy measures the rate at which useful things become unavailable to us, it is also a helpful measure of how well we are stewarding precious, finite resources, and how efficiently we put them to use to increase human satisfaction—the ultimate goal of an economy. Pope Francis, for one, doesn’t think we’re doing a particularly good job of this: “…our industrial system, at the end of its cycle of production and consumption, has not developed the capacity to absorb and reuse waste and by-products.”

There’s a heedless, propulsive quality to our economy, the Pope reminds us. As we race along, we increase the instability in our corner of the universe—which itself poses huge risks. Changes in the physical world threaten to outstrip technology’s capacity to keep up with them.

The rate at which we are spewing carbon pollution into the atmosphere, and the resulting climatic upheaval, is thus just one of entropy’s many faces. And “throwaway culture, which affects the excluded just as it quickly reduces things to rubbish” is another, the Pope says, casting the focus, as he often does, back onto the poor and marginalized.

This was also one of the core conclusions that Georgescu drew from his theories: our wasteful behavior today limits the options available to future generations and to the poorest among us alive today.

Not surprisingly, Georgescu’s ideas never caught on in the academy: they threw way too much cold water on his peers’ rosy models of never-ending growth. (“How long can neoclassical economists ignore the contributions of Georgescu-Roegen?” asked the title of an essay by Herman Daly, a student of the cranky Romanian, in a 1999 volume of commemorative essays. The answer seems to be: a long time. The copy of The Entropy Law I found in the Harvard library was just checked out just once since 1991.)

When cornered and forced to say something, Georgescu’s contemporaries waved off entropy as something for cosmologists to worry about, relevant to the long-term fate (termed “heat death”) of the universe, but not a practical concern for the here and now of human affairs.

So even if the Pope had studied economics, he probably wouldn’t have encountered Georgescu’s radical vision. But he seems to have arrived at similar conclusions:

“Now, by contrast, we are the ones to lay our hands on things, attempting to extract everything possible from them while frequently ignoring or forget­ting the reality in front of us… This has made it easy to accept the idea of infinite or unlimited growth, which proves so attractive to economists, financiers and experts in technology. It is based on the lie that there is an infinite supply of the earth’s goods, and this leads to the planet being squeezed dry beyond every limit. It is the false notion that “an infinite quantity of energy and resources are available, that it is possible to renew them quickly, and that the negative effects of the exploitation of the natural order can be easily absorbed.”

Francis clearly embraces the key ideas of “entropic economics”: there is a hard limit to the scale of the economy; growth can’t go on forever; the inevitable consequence of economic activity is waste; and the question is, how much waste can we tolerate?

Both Francis and Georgescu appreciate that this all very quickly becomes a question of values. The parallels deepen:

Georgescu: “Only economists still put the cart before the horse by claiming that the growing turmoil of mankind can be eliminated if prices are right. The truth is that only if our values are right will prices also be so.”

Francis: “Production is not always rational, and is usually tied to economic variables which assign to products a value that does not necessarily correspond to their real worth.”

Sounding rather papal, Georgescu wrote, “In the past we went from ‘Thou shalt not kill’ to ‘Thou shalt love thy neighbor as thyself.’ The time calls for a new commandment: ‘Thou shalt love thy species as thyself’.”

Those who take Francis to task for his suspicion of using free-market mechanisms like cap-and-trade in fighting climate change might be right on the narrow merits—but they mostly fail to appreciate that he is engaged in a much deeper project. Francis is taking aim at the entire prevailing economic paradigm, which he finds blind to the most important truths.

Laudato Si implicitly targets the mental models handed down by neoclassical “pendulum” economic theory, which we have all internalized to varying degrees. The treatise rings with all the urgency of someone who understands the hourglass model is closer to reality.

“What is the goal of all our work and efforts? What need does the earth have of us?” Francis asks.

These were questions of core interest to Georgescu, as well. The one product of the economic process that eludes analysis, he conceded, is the “human satisfaction” piece. “The true product of the economic process is an immaterial flux, the enjoyment of life, whose relation with the entropic transformation of matter-energy is still wrapped in mystery.”

Systems theorists use the term “equifinality” to describe how different paths can lead to the same end state or condition. It is an apt way to characterize the uncanny alignment of Francis’ and Georgescu’s views about our global economy.

Georgescu got there through a deep dive into what he saw as the quantitative and qualitative blind spots of economic science. The Pope presumably got there through his Jesuit education, his complicated relationship with Latin America’s “liberation theology” movement, with its focus on the structural roots of poverty, and his own experience working with people in the slums of Buenos Aires—witnessing the suffering of those on the margins of the global economy.

I have no evidence that Francis has ever heard of Nicholas Georgescu-Roegen, let alone read his dense writings. Most likely he’d give a blank stare in response if you asked him about The Entropy Law and the Economic Process. But for all their many differences (including readability), these two texts are both catechisms of restraint, both extended clarion calls for revisiting the values underpinning our juggernaut of an economy.

This article has been edited to reflect updated information from the author.