"I think we in government have great capacity, but we are constrained, as your questions suggests, by the Second Law of Thermodynamics when it comes to entropy." [Larry Summers, in response today to a question from a representative of the LaRouche Youth Movement]
Economic Profitability Versus Ecological Entropy
Quarterly Journal of Economics, February 2000, Pages 237-263
There is a long-standing trade-off in bioculture between concentrating on high-yield varieties and maintaining sufficient diversity to lower the risks of catastrophic infection. The paper uses a simple ecology-based model of endogenous disease to indicate how a local decision to plant more of a widely grown crop creates negative externalities by increasing the probability that new pathogens will evolve to attack the crop globally. Society's basic issue concerns where to locate on an efficiency frontier between economic profitability and a standard formula for ecological entropy-proved here to be a rigorous measure of "generalized resistance" to crop-ecosystem failure.
The Changing Relationship between Theory and Experiment in Economics
Philosophy of Science, December 2008, Pages 621-632
Until recently, economics was generally understood to be a nonexperimental science with a hypothetico-deductive methodology. This article considers how the methodology of economics has changed with the spread of experimental methods. Initially, most experimental economists saw their work as testing pre-existing theories. However, a method of systematic inductive enquiry in which theory plays a less central role is now evolving. This method is structured around the discovery and progressive refinement of regularities. "Exhibits" - experimental designs that generate significant regularities - are taking over some of the functions formerly performed by theoretical models.
(nod to Kevin L)