ABSTRACT
This chapter reviews different classes of formal models, including classical systems and those involving different degrees and sources of irreversibility. It discusses the history of economic thought, trying to identify various notions of irreversible economic processes and focuses on Smith, Marshall and Schumpeter as economists aware of significant irreversibility in economic affairs. The chapter attempts a taxonomic exercise on the sources of irreversibility present in actual economic systems, both at micro level – that is for individual decision makers and for the system as a whole. It suggests that particularly important for the understanding of how history matters in social systems and possibly differentiates them from all other systems where micro units do not exhibit teleological behaviours. The chapter shows the different notions of irreversibility that apply to either domain and how they link with each other. The argument so far leads to the conclusion that various sorts of irreversibility in microeconomic behaviours are indeed the general case.
