Economic Entropy



Courtesy of Professor Antal E Fekete @

Social Circulating Capital

When does a river cease to be a river? At the moment it gets within sight of the sea. As the river is descending to sea level significant and conspicuous changes occur. The salinity of the water increases sharply and, with it, the ecology changes. Water molecules lose their potential energy and their kinetic energy is converted to entropy.

Similarly, the flow of myriad goods from producer to market also undergoes a remarkable metamorphosis when it gets within sight of the consumer. Adam Smith was the first to notice this interesting phenomenon. He formulated the concept of social circulating capital. By this he meant the mass of finished or semi-finished consumer goods which has reached sufficient proximity and is moving sufficiently fast to the ultimate cash-paying consumer so that its destiny of being consumed presently can no longer be in doubt.

The analogy between the flow of goods to the final consumer and the river emptying into the ocean can be profitably extended to include economic entropy. The risks and uncertainties, so characteristic of processing in the earlier stages of production, all but disappear by the time the maturing goods become part and parcel of social circulating capital and sale at the going price can be taken for granted. Speculation and other forms of risk-taking give way to the highly predictable automatic processes of distribution. In particular, established retail prices do not normally change in response to changes in demand because of the increase in economic entropy, measuring the reduction of uncertainty and risk.


The vanishing of uncertainty and risk, the emergence of social circulating capital, and increase in economic entropy are manifested in a most dramatic fashion through the appearance of liquidity. To Adam Smith liquidity was tantamount to the spontaneous circulation of real bills that he observed in Manchester and Lancashire\. It refers to the qualitative difference between goods carried by the trade at virtually no risk in anticipation of sale to the final consumer at established prices, and other goods carried at considerable risk in anticipation of an eventual appreciation in value. Continue reading

Russia Proves Small Scale Organic Can Feed the World

As GMO is pushed as the solution, rather than as the problem, to our coming food crisis – the question to ask is can organic farming solve the issues we face of mass shortages? According to the Ruski’s, yes we can.

We do not need genetically modified seeds, such as those produced by Monsanto, which suck up their patented Roundup and lead to glyphosate being ingested by whoever eats them. Glyphosate has been linked to gastrointestinal disorders, obesity, diabetes, heart disease, depression, autism, infertility, cancer and Alzheimer’s disease.


Glyphosate’s inhibition of cytochrome P450 (CYP) enzymes is an overlooked component of its toxicity to mammals. CYP enzymes play crucial roles in biology, one of which is to detoxify xenobiotics. Thus, glyphosate enhances the damaging effects of other food borne chemical residues and environmental toxins. Negative impact on the body is insidious and manifests slowly over time as inflammation damages cellular systems throughout the body. The Full Study which was peer reviewed and published in Entropy. Authors Anthony Samsel, an independent scientist and consultant, and Stephanie Seneff, a senior research scientist at MIT, destroy the industry’s claims that the herbicide glyphosate is non-toxic and as safe as aspirin.

The article in full:


If you’ve already been through an economic collapse, you might know a thing or two about how to feed your family with little money. More importantly, you might know how to do it without pesticides, herbicides, fungicides, and GMO seed. On a total of about 20 million acres managed by over 35 million Russian families, Russians are carrying on an old-world technique, which we Americans might learn from. They are growing their own organic crops – and it’s working.

According to some statistics, they grow 92% of the entire countries’ potatoes, 77% of its vegetables, 87% of its fruit, and feed 71% of the entire population from privately owned, organic farms or house gardens all across the country. These aren’t huge Agro-farms run by pharmaceutical companies; these are small family farms and less-than-an-acre gardens.

A recent report from Agro-ecology and the Right to Food says that organic and sustainable small-scale farming could double food production in the parts of the world where hunger is the biggest issue. Within five to 10 years we could see a big jump in crop cultivation. It could also take the teeth out of GMO business in the US.

According to World Watch, we can also farm fish responsibly and feed the planet. Sustainable fish farms along with organic gardening are becoming the new agro-business.

“Farmed seafood has certain advantages over wild fish in meeting modern demand. For a global marketplace that demands increasingly predictable products—uniform-sized fillets available year-round, free of the vagaries of weather or open-ocean fishing—fish farming delivers this predictability. Farms are also becoming more productive, raising fish at a lower cost and expanding the potential market.” (Brian Halwell, Farming Fish for the Future).

As long as this is done in sustainable ways without GMO salmon, we really can feed over 7 billion people.

Unfortunately, not all of us want to utilize organic farming. Purchasing 500,000 shares of Monsanto stock in 2012, Bill Gates is just one key figure who argues that GMOs are an absolute necessity in order to fight global starvation. Of course along with ‘saving the world from starvation’, GMO crops also bring along a large number of unwanted health and environmental effects. This isn’t even considering the fact that long term, we truly don’t know what kind of impact this will have on the earth on a major scale. Though we do know once everything is GMO, it will be virtually impossible to go back to a natural world.

“We won’t solve hunger and stop climate change with industrial farming on large plantations,” says Olivier De Schutter.