The economics of energy and the production process : an evolutionary approach

The economics of energy has been a contested issue over the past century. Although it has not figured prominently in mainstream economics, numerous alternative proposals have called for energy to play a more central role in economic theory. In this highly original and enlightening volume, Guido Buenstorf develops a new conceptual approach to the economics of energy which originates from recent advances in evolutionary economics.

The book proposes a non-reductionist, evolutionary approach to the economics of energy and sets out by asking how energy use in production contributes to the use value of goods. Based on a sequential production framework, the author re-interprets the notion of factors of production, identifies long-term patterns of change in energy use, and highlights the role of technical interdependence in adopting new energy technologies. This approach is then applied to three historical cases of energy innovation: the transition from wood to coal, the introduction of the steam engine, and the electrification of industrial production.

Academics and researchers in the fields of evolutionary economics, ecological economics and innovation will welcome this fresh and illuminating interpretation of the economics of energy and its role in the process of production.

Author Notes

Guido Buenstorf is at the Max Planck Institute for Research into Economic Systems, Jena, Germany.

List of figures	p. vii
List of tables	p. viii
List of symbols	p. ix
Preface	p. xi
1. Introduction: energy is back on the agenda	p. 1
1.1 Power blackouts in the knowledge economy	p. 1
1.2 Three levels of analyzing production	p. 3
1.3 Outline of the argument	p. 8
2. The physical perspective on the economy and its limitations	p. 10
2.1 A brief history of energy in economics	p. 10
2.2 Thermodynamic concepts and economic applications	p. 20
2.3 Open systems thermodynamics	p. 33
2.4 Economic implications of thermodynamic concepts	p. 38
2.5 Conclusions: the need for a more economic approach	p. 43
2.6 A note on terminology	p. 44
3. Production as a sequential process	p. 45
3.1 Activity analysis: abstract models of inputs and outputs	p. 45
3.2 Sequential production in engineering and economics	p. 47
3.3 Property vectors, operations and techniques	p. 59
3.4 From operations to factors of production	p. 65
3.5 Conclusions	p. 73
4. More than heat and light: the services provided by energy use in production	p. 74
4.1 Forms of energy and the factor services provided by them	p. 74
4.2 Regularities in human wants and direct services of energy	p. 78
4.3 Indirect factor services of energy use	p. 82
4.4 Conclusions	p. 88
5. Changing power relations: the long-term development of energy use in production	p. 90
5.1 Qualitative changes in energy use	p. 90
5.2 The macro picture: increasing variety rather than stages of development	p. 103
5.3 Conclusions	p. 107
6. Process innovations in sequential production	p. 109
6.1 Kinds of changes in production operations	p. 109
6.2 Incompatibilities and complementarities of operations	p. 115
6.3 Incompatibility in techniques and modularity in product designs	p. 120
6.4 The broader context: complex systems, decomposability and evolution	p. 123
6.5 Modularity of techniques	p. 127
6.6 Variable and endogenous decomposability	p. 130
6.7 Conclusions	p. 134
7. A closer look at change: three historical examples of energy innovations	p. 135
7.1 The transition from wood to coal	p. 135
7.2 The introduction of the steam engine	p. 144
7.3 The electrification of industrial production	p. 158
7.4 Conclusions	p. 166
8. Conclusions	p. 170
8.1 Energy in the production process	p. 170
8.2 Use value and long-term economic development	p. 176
8.3 The production of useful goods: towards a theory	p. 177
References	p. 179
Index	p. 194

Available:*

On Order

Summary

Summary

Author Notes

Table of Contents