Eric Beinhocker

Eric Beinhocker nsIn hmolscience, Eric Beinhocker (c. 1968-) is an American-born English business economist noted, in economic thermodynamics, for his 2006 Georgescu-Roegen conceptualized theory of value-creating economics.

Overview
In 2006, Beinhocker, in his The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics, builded on Romanian mathematician Nicholas
Georgescu-Roegen’s 1971 economic entropy law theories to formulate a new definition of wealth. [1] In his own words: [2]

“I go a step beyond Georgescu-Roegen’s claims and propose that taken together, these three observations [irreversibility, entropy, and fitness] tell us exactly what conditions have to be met for economic value to be created, which leads to a new definition of wealth itself.”

He goes on to restate Georgescu-Roegen’s three central arguments in terms of what Beinhocker calls G-R Conditions. Beinhocker is known for complexity economics, a term he claims to have coined in his book, which supposedly incorporates the second law of thermodynamics, albeit via Shannon information theory, and a mixture of Georgescu-Roegen’s misapplied entropy law theories and Sante Fe Institute complexity theory. [3]

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Condition
Description



1. Irreversibility All value-creating economic transformations and transactions are thermodynamically irreversible.
2. Entropy All value-creating economic transformations and transactions reduce entropy locally within the economic system, while increasing entropy globally.
3. Fitness All value-creating economic transformations and transactions produce artifacts and or actions that are fit for human purposes.

The three G-R conditions, according to Beinhocker, are such that a pattern of matter, energy, and or information has economic value if the following three conditions are met jointly: [2]

References
1. Eric D. Beinhocker (biography) – Economic Research Council.
2. Beinhocker, Eric, D. (2006). The Origin of Wealth – Evolution, Complexity, and the Radical Remaking of Economics. (ch. 14: A New Definition of Wealth: Fit Order, pgs. 299-319, subject: economic thermodynamics). Boston, Mass.: Harvard Business School Press.
3. Complexity economics – Wikipedia.

External links
Eric Beinhocker – Wikipedia.
Eric Beinhocker (Senior Fellow) – McKinsey Global Institute.

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