I doubt that it will be possible to connect economic outcomes directly to physics fundamentals without going through the intermediate step of dealing with things like money and human values/desires. For example:
Maybe I am trying to figure out why cars are usually built out of steel, even though they could be lighter, stronger, smaller, and more energy-efficient if they were built out of aluminum. I don’t think there are any physics reasons why this is going on—aluminum seems better than steel in almost every way. The problem is simply that aluminum is more expensive than steel, precisely because it’s better in almost every way so it’s in high demand. The idea of building cars out of aluminum sounds great until you realize that other people are even more eager to build airplanes out of aluminum, and they’re already using most of the world’s supply. So it seems like you’ll still have to reckon with a world of complex human desires, at least to understand the “demand” side of the supply/demand balance that determines the availability and prices of everything. (Is the high price of gold justified by its fundamental physical properties? Or do people just want gold, because they know other people want gold, because they know other people want gold, because...)
Maybe I am wondering why a company bothered to create a large, slow, inefficient factory in a developing country, when they could have gotten the same benefit from building a small, fast, mostly-automated factory in the rich world? The answer might be hard to figure out based on physical fundamentals—it will have to involve things like “well, it’s cheaper to hire workers in the developing world, because the demand for their labor is lower, because they don’t have as many advanced skills, because there are fewer universities there”. Maybe there is some way in which you could describe “human capital” and education in terms of time, energy, matter, etc, but it seems like it would be pretty complicated!
Regarding steel, I think there is also some additional utility that you are leaving out. One would be that it is more flexible, whereas aluminum is prone to breaking or snapping when under a lot of force. I imagine that would be important as automobiles are much more prone to accidents and the flexibility adds an additional layer of safety for the driver. In general, I think that heavy industries are much less prone to subjective utilities than individuals.
As you stated, calculating TEMS values for things like human capital and subjective utilities does seem like it would involve a lot of complexity, but I still think it would be worthwhile to figure out eventually. But that isn’t necessarily what I’d focus on. It would be what investments create the best TEMS outcomes. When you compare the TEMS costs, how does that compare with the utilities?
I doubt that it will be possible to connect economic outcomes directly to physics fundamentals without going through the intermediate step of dealing with things like money and human values/desires. For example:
Maybe I am trying to figure out why cars are usually built out of steel, even though they could be lighter, stronger, smaller, and more energy-efficient if they were built out of aluminum. I don’t think there are any physics reasons why this is going on—aluminum seems better than steel in almost every way. The problem is simply that aluminum is more expensive than steel, precisely because it’s better in almost every way so it’s in high demand. The idea of building cars out of aluminum sounds great until you realize that other people are even more eager to build airplanes out of aluminum, and they’re already using most of the world’s supply. So it seems like you’ll still have to reckon with a world of complex human desires, at least to understand the “demand” side of the supply/demand balance that determines the availability and prices of everything. (Is the high price of gold justified by its fundamental physical properties? Or do people just want gold, because they know other people want gold, because they know other people want gold, because...)
Maybe I am wondering why a company bothered to create a large, slow, inefficient factory in a developing country, when they could have gotten the same benefit from building a small, fast, mostly-automated factory in the rich world? The answer might be hard to figure out based on physical fundamentals—it will have to involve things like “well, it’s cheaper to hire workers in the developing world, because the demand for their labor is lower, because they don’t have as many advanced skills, because there are fewer universities there”. Maybe there is some way in which you could describe “human capital” and education in terms of time, energy, matter, etc, but it seems like it would be pretty complicated!
Regarding steel, I think there is also some additional utility that you are leaving out. One would be that it is more flexible, whereas aluminum is prone to breaking or snapping when under a lot of force. I imagine that would be important as automobiles are much more prone to accidents and the flexibility adds an additional layer of safety for the driver. In general, I think that heavy industries are much less prone to subjective utilities than individuals.
As you stated, calculating TEMS values for things like human capital and subjective utilities does seem like it would involve a lot of complexity, but I still think it would be worthwhile to figure out eventually. But that isn’t necessarily what I’d focus on. It would be what investments create the best TEMS outcomes. When you compare the TEMS costs, how does that compare with the utilities?