“To act in accord with a myth is the distinctive characteristic of all living things”.

                                                               ─Nicolas Georgescu-Roegen             

Introduction

This paper is an upgrading of some observations in my forthcoming book ENERGY AND ECONOMIC THEORY (2015), and earlier in a talk at the Australian National University. That book should have been available a few years ago, but on the basis of what is going on in the energy economics world at the present time, I have a desperate urge to say a few things as soon as possible.

However before beginning I want to mention the late Professor  Georgescu-Roegen, who provided the quotation just under the title of this contribution. If the economics section of the Nobel committee were composed of scholars instead of sycophants, Nicholas Georgescu-Roegen would have been certain to receive a prize.  Occasionally described as “one of the most remarkable and profound thinkers in economics”,  his profundity – like that of many other  potential recipients of a ‘Nobel' –  was almost certainly an affront to the gentlemen who select the economics laureates.

I am also willing to believe  that present day committee members are so badly educated that they neither know nor care who Professor Georgescu-Roegen was. Among other reasons, this might have been why the physics superstar Murray Gell-Mann once said that winners of the economics ‘Nobel' should not be allowed to sit with the other laureates at the awards ceremony, although I will leave it to readers to propose where the new economics laureates should have been seated before receiving their accolades from the hand of His Majesty, the Swedish king..

A serious theoretical myth

Many years ago I  gave a very short course in energy economics at Griffith University (Brisbane, Australia), during which I had a rather remarkable experience. I put a fairly complicated mathematical expression on the blackboard, performed some operations, and obtained a well known result. Then I put a fairly simple relationship on the board, and easily derived the same equation. The problem was that while pausing for a few seconds before formulating some sarcastic remark about these two outcomes, I unexpectedly found myself thinking that the theoretical background of academic energy economics (at that time) was seriously overvalued, and the same could be said about some of the things I had taught my students on several occasions during the previous 2 or 3 years, or earlier.

Fortunately, my students at Griffith had some acquaintance with the conventional literature, and so it was possible for me to discuss various meaningless analytical results at some length without drawing any protests. As some of you may have guessed, when it comes to meaningless results the first name in my mouth is usually that of Harold Hotelling, a brilliant American economist, who as far as I am concerned went off the rails with his theory of how the price of exhaustible resources was determined.