Energy Conversion & Management 40 (1999) 1009±1019

Endoreversible thermodynamics versus economics

Alexis De Vos 1
Vakgroep voor elektronika en informatiesystemen, Universiteit Gent, Sint Pietersnieuwstraat 41, B-9000, Gent, Belgium
Received 9 May 1998; accepted 10 December 1998

Abstract

Endoreversible thermodynamics is a useful subset of irreversible thermodynamics, as it allows gaining

physical insight in steady state processes, away from equilibrium. As economic activities are non-
equilibrium processes, we investigate how endoreversible models can be applied to economic systems.
We investigate whether extensive quantities (like energy, matter and entropy) and intensive quantities
(like temperature and chemical potential) in physics have counterparts in economics. # 1999 Elsevier
Science Ltd. All rights reserved.

Keywords: Endoreversible thermodynamics; Economics

1. Thermodynamics

Endoreversible thermodynamics forms a subset of irreversible thermodynamics, more

speci®cally of ®nite time thermodynamics [1,2]. Modelling and calculations are easy, because all
irreversibilities are restricted to transports [3]. No irreversibilities are assumed to be related to
conversions, mixings etc. Thus, the inner part of the converter is reversible (Endo meaning
inner). Fig. 1a shows the endoreversible thermochemical engine [4,5]. We have three reservoirs
at constant temperature T and constant chemical potential m. Reservoirs ] 1 and ] 2 are the
external reservoirs (source and sink, respectively); reservoir ] 3 is the intermediate reservoir.
Between the reservoirs, energy currents U and particle currents N are exchanged. Between
reservoir ] 1 and ] 3, this happens by means of an irreversible conductor; between ] 3 and ] 2,

E-mail address: alex@elis.rug.ac.be (A. De Vos)

1
Fax: 0032 9 264 35 94

0196-8904/99/$ - see front matter # 1999 Elsevier Science Ltd. All rights reserved.
PII: S 0 1 9 6 - 8 9 0 4 ( 9 9 ) 0 0 0 0 7 - 2
1010 A. De Vos / Energy Conversion & Management 40 (1999) 1009±1019

Fig. 1. Endoreversible thermodynamic engines: (a) thermochemical engine; (b) thermal engine; (c) chemical engine.

it happens by a reversible engine. In both devices, two axioms hold:

N1 ˆ N3 ˆ N2 …conservation of particles†

U1 ˆ U3 ˆ U2 ‡ W …conservation of energy†,
where the N's denote particle currents, the U's denote energy currents and W denotes the
produced power. The fact that the inner engine is reversible means that it satis®es a third
axiom:
S3 ˆ S2 …conservation of entropy†,
where the S's are the entropy currents (U ÿ mN )/T associated with the currents U and N.
The conservation of entropy, i.e.,
U3 ÿ m 3 N3 U2 ÿ m 2 N2
ˆ ,
T3 T2
together with the two other axioms, leads to
U1 ÿ m 3 N1 U1 ÿ W ÿ m 2 N1
ˆ
T3 T2
and, therefore, to a generalized Carnot formula:
   
T2 T2
Wˆ 1ÿ U1 ‡ m ÿ m2 N1 : …1†
T3 T3 3
 A. De Vos / Energy Conversion & Management 40 (1999) 1009±1019 1011

For the sake of completeness, we have to stress here that the equation N1 = N3 = N2 only
holds for the most simple chemical reactions. In a more realistic description, we have to
introduce stoichiometric coecients.
The communication rate is assumed to be governed by transport equations of the form
U1 ˆ f…T1 ,m1 † ÿ f…T3 ,m3 † and N1 ˆ g…T1 ,m1 † ÿ g…T3 ,m3 †,
where f and g are some known mathematical functions.

2. Thermal engines

We present here the thermal engine as an introductory example of how endoreversible

thermodynamics leads to useful results in a simple way. In purely thermal engines, there are
only temperature di€erences and heat currents. There are no potential di€erences
(m1 = m2 = m3) and no particle currents (N1 = N2 = N3 = 0). Fig. 1b shows an endoreversible
thermal engine [5±7]: the heat source at constant temperature T1 provides heat to a collector at
temperature T3; a reversible heat engine converts the heat current U1 into the work ¯ow W
and deposits the waste heat current U2.
On the one hand, the rate of heat transport is governed by T1 and T3:
U1 ˆ f…T1 † ÿ f…T3 †:
For given T1 and T2, the resulting rate U1 is, thus, a function of the parameter T3. Fig. 2
shows U1(T3). The detailed form of this curve depends on the particular function f. The ®gure
displays the informative example, where the function f has the linear form [8,9]
f…T † ˆ aT,
with a as a positive constant.
On the other hand, the eciency of conversion of heat U1 into work W is governed by T2
and T3 because of the Carnot rule W = (1 ÿ T2/T3)U1, a special case of Eq. (1). We, thus,
obtain
 
T2
Wˆa 1ÿ …T1 ÿ T3 †:
T3
Fig. 2 also shows W(T3). We distinguish the following cases:

. for 0 < T3 < T2, we have U1>0 and W < 0: the engine works as a refrigerator;
. for T2 < T3 < T1, we have U1>0 and W>0: the engine is a true heat engine;
. for T3>T1, we have U1 < 0 and W < 0: the engine works as a heat pump.

Note that the border point T3 = T1 between the last two operational modes represents
nothing else but the reversible operation, where energy conversion happens with Carnot
eciency 1 ÿ T2/T1, but in®nitely slowly (U1 = W = 0). Another special point is the operation
1012 A. De Vos / Energy Conversion & Management 40 (1999) 1009±1019

Fig. 2. Characteristics of a thermal engine: (a) heat consumption; (b) work production.

satisfying the condition dW/dT3 = 0, which leads to an optimal choice (T3)opt = ZT1T2 and a
maximum power production rate Wmax = a(ZT1ÿZT2)2.
The choice of f(T ) proportional to T is a good model for heat by conduction (Newton's
law). Other physical laws are non-linear, e.g., heat exchange by radiation is modelled by an
f(T ) proportional to T 4 (Stefan's law).

3. Chemical engines

In purely chemical engines, there are only potential di€erences. There are no temperature
di€erences (T1 = T2 = T3 = T ) and no heat currents. Fig. 1c shows an endoreversible chemical
reactor [4,5,7]: the particle source at constant chemical potential m1 provides particles to a
collector at chemical potential m3; a reversible fuel cell converts the particle current N1
(reactant or fuel) into the work ¯ow W and deposits the waste particle current N2 (reaction
product or exhaust).
On the one hand, the rate of particle transport is governed by m1 and m3:
N1 ˆ g…m1 † ÿ g…m3 †:
 A. De Vos / Energy Conversion & Management 40 (1999) 1009±1019 1013

Fig. 3. Characteristics of a chemical engine: (a) reactant consumption; (b) work production.

For given m1 and m2, the resulting rate N1 is thus, a function of the parameter m3. Fig. 3 shows
N1(m3). The detailed form of this curve depends on the particular function g. An example
function g is derived from Fick's di€usion law and Nernst's law:
 
m
g…m† ˆ b exp ,
kT

where b is a positive constant. This model is applicable when the supply of fuel is limited by its
transport towards the reversible reaction chamber (i.e., transport from reservoir ] 1 to reservoir
] 3).
On the other hand, the conversion of chemical energy into work W is governed by m3 and m2
because of the ``Carnot'' rule W = (m3 ÿ m2)N1, another special case of Eq. (1). We, thus, get
    
m m
W ˆ b…m3 ÿ m2 † exp 1 ÿ exp 3 :
kT kT

Fig. 3b shows the function W(m3). We again distinguish three cases:

. for m3 < m2, we have N1>0 and W < 0: the engine works as an exhaust pump;
. for m2 < m3 < m1, we have N1>0 and W>0: the engine is a true fuel cell;
. for m3>m1, we have N1 < 0 and W < 0: the engine works as a fuel pump.
1014 A. De Vos / Energy Conversion & Management 40 (1999) 1009±1019

Again, the border point m3 = m1 is the reversible point. Again we have a maximum-power
point on the curve W(m3). However, the condition dW/dm3 = 0 now leads to a transcendental
equation.
For the more general case, with arbitrary stoichiometric coecients, we have
W = m3N3 ÿ m2N2. Calculations are somewhat cumbersome. Therefore, the reader is referred to
the appropriate Appendices of Refs. [4] and [5].

4. Economics

In order to use the thermochemical model for describing economic processes, we need to
interpret all the extensive variables N, U, mN, U ÿ mN, W and S, as well as the intensive
parameters T and m.
We start from the following choice: N is the ¯ux of goods and U is the ¯ux of money. In
Section 1, the energy ¯ux U consisted of two components: mN, the ¯ux of ``chemical energy'',
associated with the matter ¯ux N, and Q = U ÿ mN, the ¯ux of ``heat''. Analogously, in the
present section, we have to split money ¯uxes into two parts [10]: a part associated with N and
a remaining part, i.e., money ``circulating'' without an accompanying ¯ow of goods. Thus, the
former part is ``commercial money'', whereas the latter is a rent, an alimentation, a donation, a
social transfer, a development aid, an investment, a heritage,. . .
Let us ®rst look at the special case of a pure chemical engine. Its economical counterpart is
the market [11]. Goods are exchanged, because di€erent people or institutes or nations (say
``economic units'' [10,12]) attribute a di€erent worth or value to the same good. Therefore m is
associated with ``value'' V. Like chemical species have the tendency to ¯ow spontaneously from
high chemical potential to low chemical potential, economic goods have the tendency to ¯ow
spontaneously from low value to high value. We, thus, have to be careful here. In the chemical
engine, the spontaneous ¯ows N and mN are in the same sense: from high chemical potential to
low chemical potential. In the present market engine, goods and money tend to ¯ow in
opposite sense: goods ¯ow from producer to consumer (from seller to buyer), whereas money
¯ows from consumer to producer (from customer to salesman). Therefore, the V's correspond
to ÿm's. Further, W is the ¯ow of (indirect) tax, associated with the transaction [11]. The
engine, we will call the commercial engine.
Next, we look at the special case of a pure heat engine. The irreversible part of the heat
engine consists of the heat conductor. It expresses that heat ¯ows from one heat reservoir to
the other without any exchange of particles. Now, why, in an economy, should money travel
from one person to the other (or from one nation to the other, in general: from one
economical unit to another), without any transfer of goods? Because of solidarity: rich people
give money to poor people (directly or by means of a social security system), rich countries
give aid to developing nations, etc. So, money is travelling from wealthy to poor, from master
to servant. As in Section 2, heat was ¯owing spontaneously from high temperature T to low
temperature T, we can conclude that the economic equivalent of temperature is wealth or
solvency (or even generosity). MartinaÂs [10,12] proposes the term ``liquidity''. The
corresponding engine, we could call the social engine. Money, indeed, has the tendency to ¯ow
spontaneously from high wealth to low wealth. This not only happens by altruistic ways, such
 A. De Vos / Energy Conversion & Management 40 (1999) 1009±1019 1015

as charity, welfare, and development aid, by cleverly calculated ways, such as insurance, but
also by less prosaic ways, such as robbery. All these mechanisms tend to eliminate wealth
di€erences in an irreversible way, just like temperature di€erences are eliminated in an
irreversible way by means of heat conduction, convection, and radiation. Whereas the
reversible Carnot engine is able to maintain a temperature di€erence, a reversible social engine
is maintaining wealth or liquidity di€erences.
The above two paragraphs together lead to the full sociocommercial engine of Fig. 4a.
Economic reservoir ] 1 can, e.g., be interpreted as the producer or supplier, reservoir ] 3 as the
intermediate salesman or agent and reservoir ] 2 as the consumer. In both the reversible and
the irreversible part of the circuit, two axioms hold:
N1 ˆ N3 ˆ N2 …conservation of goods†

U1 ˆ U3 ˆ U2 ‡ W …conservation of money†,
where the N's denote goods currents, the U's denote money currents and W denotes the
produced tax or wealth. The fact that the inner engine is reversible means that it satis®es the
third axiom:
S3 ˆ S2 …conservation of entropy†,
where the S's are the entropy currents (U ÿ VN )/T associated with the currents U and N.
Economic entropy (in order to distinguish it from physical entropy) is sometimes denoted Z
and called ``progress function'' [10] or ``wealth function'' [12].

Fig. 4. Endoreversible economical engines: (a) sociocommercial engine; (b) social engine; (c) commercial engine.
1016 A. De Vos / Energy Conversion & Management 40 (1999) 1009±1019

The conservation of entropy, i.e.,

U3 ÿ V 3 N3 U2 ÿ V2 N2
ˆ ,
T3 T2
together with the two other axioms, leads to
U1 ÿ V 3 N1 U1 ÿ W ÿ V2 N1
ˆ
T3 T2
and, therefore, to a ``Carnot'' formula:
   
T2 T2
Wˆ 1ÿ U1 ‡ V3 ÿ V2 N1 :
T3 T3
We will, in the next sections, illustrate the use of this ``economical Carnot law'' by presenting
two examples: one purely commercial model, and one purely social model. A purely
commercial engine was described earlier in Ref. [11] and, thus, will be recalled below for the
sake of completeness. The description of the purely social engine will be new.

5. Commercial engines

In purely commercial engines, there are only value di€erences. There are no liquidity
di€erences (T1 = T2 = T3 = T ) and no solidarity currents. Fig. 4c shows an endoreversible
commercial reactor or market: the consumer at constant value V1 receives goods from a source
at value V3; in a reversible market the goods are supplied by a manufacturer at constant value
V2. The market converts the money current ÿV1N1 into the tax ¯ow W and a money current
ÿV2N2.
On the one hand, the rate of particle transport is governed by V1 and V3:
N1 ˆ g…V1 † ÿ g…V3 †:
For given V1 and V2, the resulting rate N1 is, thus, a function of the parameter V3. Fig. 5
shows N1(V3). The detailed form of this curve depends on the particular function g. An
important function g is derived from the elasticity of demand:
g…V † ˆ bV n ,
where b and n are positive constants. In Fig. 5, we have chosen n = 3.
On the other hand, the conversion of expenses into tax W, i.e., into wealth, is governed by
V3 and V2 because of the ``Carnot'' rule W = (V3 ÿ V2)N1. We, thus, get
W ˆ b…V3 ÿ V2 †…V n1 ÿ V n3 †:

Fig. 5b shows the function W(V3). We distinguish again three cases:

. for V3 < V2, we have N1>0 and W < 0: the engine works as a subsidizer of consumption;
 A. De Vos / Energy Conversion & Management 40 (1999) 1009±1019 1017

Fig. 5. Characteristics of a commercial engine: (a) goods consumption; (b) tax production.

. for V2 < V3 < V1, we have N1>0 and W>0: the engine is a true market;
. for V3>V1, we have N1 < 0 and W < 0: the engine works as a subsidizer of restitution.

Again, the border point V3 = V1 is the reversible point. It is the Pareto equilibrium [13].
Again, we have a maximum production point on the curve W(V3). The condition dW/dV3 = 0
leads to the equation
…n ‡ 1†V n3 ÿ nV2 V nÿ1
3 ÿ V n1 ˆ 0:

For the special case of n = 1, this gives rise to the simple solution (V3)opt = (V1 + V2)/2
and to a maximum wealth production Wmax = b(V1 ÿ V2)2/4. For n = 2, we get
(V3)opt = (V2 + ZV 22 + 3 V 21)/3 and Wmax = b(ZV 22 + 3 V 21ÿ2 V2)(6 V 21 ÿ 2 V 22 ÿ 2 V2ZV 22 + 3 V 21)/
27. For other values of n (either integer or not), we have to recur to numerical calculations.

6. Social engines

In purely social engines, there are only liquidity di€erences and social transfers. There are no
value di€erences (V1 = V2 = V3) and no ¯uxes of goods (N1 = N2 = N3 = 0). Fig. 4b shows an
endoreversible social engine: the money source at constant liquidity T1 provides money to a
collector at liquidity T3; a reversible social engine converts the money current U1 into the
capital ¯ow W and deposits the saldo money current U2.
1018 A. De Vos / Energy Conversion & Management 40 (1999) 1009±1019

On the one hand, the rate of money transport is governed by T1 and T3:
U1 ˆ f…T1 † ÿ f…T3 †:
For given T1 and T2, the resulting rate U1 is, thus, a function of the parameter T3. The
detailed form of the curve U1(T3) depends on the particular function f. For the linear form
f(T ) = aT, the curve will look like Fig. 2a.
On the other hand, the eciency of conversion of money U1 into tax W is governed by T2
and T3 because of the Carnot rule W = (1 ÿ T2/T3)U1. The meaning of this law is quite similar
to its meaning in thermodynamics. A reversible heat engine is capable of maintaining a
constant temperature di€erence (in case T3 ÿ T2), thus braking the heat ¯ow from heat
reservoir ] 1 to heat reservoir ] 2, i.e., reducing the heat conduction from its spontaneous value
f(T1) ÿ f(T2) to the smaller value f(T1) ÿ f(T3). This happens by the production of work W.
Similarly, the social engine is able to maintain a liquidity di€erence T3 ÿ T2. This is only
possible at the expense of the payment of a tax W. This money ¯ow W is able to maintain the
wealth di€erence T3 ÿ T2 by using it either for altruistic purposes (such as social housing,
hospitals,. . . ) or less prosaic purposes (such as repressive police,. . . ).
Gluing the two above paragraphs together, we ®nally get
 
T2  
Wˆ 1ÿ f…T1 † ÿ f…T3 † :
T3
Fig. 2b shows such W(T3). Note that the caption of Fig. 2 has to be transformed for the social
engine: (a) capital consumption, (b) tax production. The choice of a linear function f for the
social engine is rather arbitrary. It would be most valuable to have transport laws based on
experimental data. In other words: we are in need of an economic counterpart of a Newton's
law or a Stefan's law. Anyway, for any form of f, we know we can distinguish the following
three cases:

. for 0 < T3 < T2, we have U1>0 and W < 0: the engine works as a subsidized social engine;
. for T2 < T3 < T1, we have U1>0 and W>0: the engine is a spontaneous social engine;
. for T3>T1, we have U1 < 0 and W < 0: the engine works as a Matthew engine (making the
rich richer and the poor poorer).

7. Conclusions

In the present paper, we describe various endoreversible engines. Two special cases are
discussed in detail: the endoreversible heat engine and the endoreversible chemical engine.
Their counterparts in economics are the endoreversible social engine and the endoreversible
commercial engine, respectively. This symmetry allows us to illustrate the equivalence between
chemical potential in physics and value in economics, as well as between temperature in physics
and liquidity in economics.
 A. De Vos / Energy Conversion & Management 40 (1999) 1009±1019 1019

Acknowledgements

The author wishes to thank the Commission of the European Communities for supporting
the above research in the framework of the Inco-Copernicus program Carnet 2 on
thermodynamics and thermoeconomics.

References

[1] Andresen B. Finite-time thermodynamics. Copenhagen: Copenhagen University, 1983.

[2] Sieniutycz S, Salamon P, editors. Finite-time Thermodynamics and Thermoeconomics. New York: Taylor &
Francis.
[3] Rubin M. Optimal con®gurations of a class of irreversible engines. Physical Review A 1979;19:1272±6.
[4] De Vos A. Endoreversible thermodynamics and chemical reactions. The Journal of Physical Chemistry
1991;95:4534±40.
[5] De Vos A. Endoreversible thermodynamics of solar energy conversion. Oxford: Oxford University Press, 1992.
[6] De Vos A. Re¯ections on the power delivered by endoreversible engines. Journal of Physics D: Applied Physics
1987;20:232±6.
[7] De Vos A. The endoreversible theory of solar energy conversion: a tutorial. Solar Energy Materials and Solar
Cells 1993;31:75±93.
[8] Novikov I. E€ektivyi koecient poleznovo deystvia atomnoy energeticeskoj ustanvki. Atomnaya Energiya
1957;3:409±412. English translation, The eciency of atomic power stations (a review). Journal of Nuclear
Energy II 1958;7:125±128.
[9] Curzon F, Ahlborn B. Eciency of a Carnot engine at maximum power output. American Journal of Physics
1975;43:22±4.
[10] Ayres R, MartinaÂs K. A non-equilibrium evolutionary economic theory. In: Burley P, Foster J, editors.
Economics and ThermodynamicsÐNew perspectives on Economic Analysis. Boston: Kluwer, 1994. p. 73±97.
[11] De Vos A. Endoreversible economics. Energy Conversion and Management 1997;38:311±7.
[12] MartinaÂs K. On Callen's postulate system. In: Proceedings of the Taormina Conference on Thermodynamics,
Taormina, 18±22 February, 1991. p. 169±82.
[13] Ayres R, Nair I. Thermodynamics and economics. Physics Today 1984;37:62±71.