Everyone loves a snappy title, so Jeremy Rifkin's "Saying Goodbye to Adam Smith at the Dawn of the Third Industrial Revolution" immediately caught my interest.
The thesis of the Guardian op-ed is that: "The great economic revolutions in history occur when new communication revolutions merge with new energy regimes." And, according to Rifkin, we are about to create a revolutionary green economy with an "energy internet."
Economists, Rifkin writes, are stuck with the wrong metaphors of the mechanics of physics. In such a world we can always move up or down the same supply curve (there is reversibility of economic activity). Hence, economists are ill-equipped to deal with or understand the coming transformation, which will acknowledge the role of entropy.
I have enjoyed some of Rifkin's previous work, such as the video The Empathic Civilisation. But here, Rifkin would have better served his reader to quote from the originator of the entropy idea: Nicholas Georgescu-Roegen, whose path-breaking book The Entropy Law and the Economic Process was first published by Harvard University Press in 1971—yes, before the first oil shock. In this article, Rifkin ignores the Bible of the bio-economics movement, suggesting to the reader that he (Rifkin) is the originator of these ideas. Well, perhaps Rifkin discovered them anew, but the ideas have long previously been in the headlines.
Georgescu was a protégé of Joseph Schumpeter and Georgescu's most famous student is the environmental humanist Herman Daly (not to imply that they saw eye-to-eye). Georgescu's reputation as a colleague and teacher at Vanderbilt was that of a tyrant (I got to Vandy in 1977, a year after he retired, to the great relief of all). But I did get to hear Georgescu deliver a few papers, and even had the nerve as a first year grad student to ask him a question. His answer was: "That is not as stupid a question as it may sound…" He also wrote one of the most interesting books I've read on agrarian economics, showing that peasants were not being irrational by excessively using family labor on small plots in his native Romania. Peasants are not stupid!
Rifkin, in addition to not citing Georgescu, never really makes a case against Smith. In short, he uses Smith's name to generate reader interest, but it is a "bait-and-switch" tactic. There is no end of Adam Smith.
[Thanks to my colleague Jeff Hass for providing the link to Rifkin's article.]