Economists dream of equilibrium. It’s time to wake up.

In mainstream economics, markets are ideal if competition is perfect. When supply balances demand, economic maturity is orderly and disturbed only by shocks. These ideas are rooted in doctrines going back thousands of years, yet, as James K. Galbraith and Jing Chen show, they contradict the foundations of our scientific understanding of the physical and biological worlds.

Entropy Economics discards the conventions of equilibrium and presents a new basis for thinking about economic issues, one rooted in life processes—an unequal world of unceasing change in which boundaries, plans, and regulations are essential. Galbraith and Chen’s theory of value is based on scarcity, and it accounts for the power of monopoly. Their theory of production covers increasing and decreasing returns, uncertainty, fixed investments over time, and the impact of rising resource costs. Together, their models illuminate key problems such as trade, finance, energy, climate, conflict, and demography.

Entropy Economics is a thrilling framework for understanding the world as it is and will be keenly relevant to the economic challenges of a world threatened with disorder.

"Entropy Economics makes the case for an economic model that embraces entropy, aligning economic theory with life processes and physical laws—something that has real implications for how we understand markets, power, and regulation." - Institute for New Economic Thinking

"Galbraith and Chen [present] an economic theory that is consistent with life processes and physical laws, focusing on how a biophysical approach can guide us to simple mathematical expressions that describe value and production and are highly consistent with reality." - Journal of Economic Literature

"For most readers, the book will be a step into the unfamiliar...Nonetheless, readers should persevere. They will be enriched by this provocative perspective." - Finance and Development Magazine