ABSTRACT
Microeconomics and thermodynamics are both based on the idea of exchange. In thermodynamics the irreversibility of exchanges is a key idea and one that my physics students sometimes have difficulty understanding, so about twenty years ago I went looking for examples of irreversibility in economic theory that I could use in my teaching of thermodynamics. What I found, however, was no irreversibility in the neoclassical paradigm. As a physicist this struck me as preposterous and incredible. Without irreversibility, microeconomics might be a wonderful mathematical theory, but it could not offer a theory of economic activity. This encounter marked the beginning of my long-term interest in economic research.
