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The American engineer Myron Tribus, in 1962 coined Thermoeconomics. The Thermoeconomics also referred to as biophysical economics, It is a school of heterodox economics that applies the laws of thermodynamics to economic theory It can be thought of as the statistical physics of economic value. It is based upon the proposition that the role of energy in biological evolution should be understood and defined not through the second law of thermodynamics but in terms of such economic criteria as efficiency, productivity and especially the costs and benefits of the various mechanisms for utilizing and capturing available energy to build biomass and do work. According to the Thermoeconomist human economic systems can be modeled as thermodynamic systems. The first and second laws of thermodynamics are developed based on this premise. The thermodynamic quantity energy, which is the measure of the useful work energy of a system, is one measure of value.According to the Thermo economists, economic systems always involve energy, matter, entropy, and information. The thermo-economics applies the theories in non-equilibrium thermodynamics where the structure formations are known as dissipative structures form and information theory where the information entropy is a central construct, to the modelling of economic activities in which the natural flows of materials and energy function to create scarce resources. The human economic activity may be described as a dissipative system in thermodynamic terminology that flourishes by consuming free energy in transformations and exchange of goods, resources and services.
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