(a) Is Gibbs free energy zero?
If we know the energy balance equation then we can answer this question directly.
(b) If Gibbs free energy is zero, how does it get created? (a) Gibbs free energy depends on the equilibrium conditions. The balance equations say that energy is conserved in the free market. The equilibrium conditions for a good system are (1) the energy density is constant, and (2) the energy density can vary freely with the energy input/output (Figure 7.13.)
Notice two things about this equation. (1) It cannot be solved. If it were, it would be true under the free market as well. In fact, in many cases, you cannot predict how the energy value will evolve if a person inputs and produces energy in a free market. We know the price, and we know how to control it, but it is impossible to predict what the energy value will be once someone inputs more energy.
(2) It isn’t equal to zero. Let’s assume that the energy has to exist because the demand for it exceeds supply. This means that the free market will not generate zero free energy. The energy will just vary in a chaotic manner. We would not expect to have energy and waste resources at the same level. As I will explain, Gibbs free energy is very unstable. To get our energy into equilibrium from a free market environment, we need to create it.
What is a free market
Let me start by explaining how a free market works. You have money and an external demand for the use of the money in the market. There is an exchange mechanism in which you exchange the cash for something else (usually a good) with an external supplier. In this way, you exchange the good being exchanged for cash, the cash being exchanged for goods, and then you create money (or some kind of monetary product), and then you buy the exchanged good. Then you sell the created money.
If there is no price on the goods, then the process is no longer a free market. Instead, there needs to be some sort of a tax for the good being traded. This means that we need to determine some value or tax on the good being traded. In practice, this can be done quite easily. In some cases, you can easily calculate the amount of money that is being passed from one person to another. In other cases, the amount of money necessary has to be determined. You just need to find