Neoclassical Economics Developed as a Copy of Mechanical Physics Replacing Energy with Utility

Perhaps at this time it is most important to highlight the negative influence which the static conception of energy efficiency has exerted on the development of economics. Hans Mayer and Philip Mirowski have pointed out that neoclassical economics developed as a copy of nineteenth-century mechanical physics: using the same formal method, yet replacing the concept of energy with that of utility and applying the same principles of conservation, maximization of the result and minimization of waste. The leading author most representative of this trend, and the one to best illustrate this influence of physics on economic thought, is Leon Walras. In his paper ‘Economics and Mechanics’, published in 1909, he claims that in his Elements of Pure Economics he uses mathematical formulas identical to those of mathematical physics, and he stresses the parallel between the concepts of force and rareté (which he regards as vectors), and between those of energy and utility (which he regards as scalar quantities).

—Jesús Huerta de Soto, “The Theory of Dynamic Efficiency,” in The Theory of Dynamic Efficiency, Routledge Foundations of the Market Economy 28 (London: Routledge, Taylor and Francis, 2009), 4.