Here, we see a confused mess as to what exactly "entropy" is, as defined by Clausius (1865), and how it related to the definition of ecosystems and economic systems; most of the error here, in large part, tracing to Nicholas Roegen’s 1971 error-filled “material entropy” model; some error comes from the mind of Daly as well.

The following quotes, in overview, show the basic confused understanding of their conceptual “system” models as actual human chemical thermodynamics understands things:

The first criticism of neoclassical economics in respect to thermodynamics. Contemporary economics and its fundamental household-firm market model (figure above left), pays only minimal attention to the first law of thermodynamics, and none at all to the second. In fact, the second law is completely incompatible with the conceptual model known as the circular flow. In the circular flow diagram, there is never any value lost to waste or entropy. This is a serious conceptual flaw and an obstacle to designing economic policies that can meet the challenges of pollution, resource scarcity, and depletion, and unemployment successfully. In effect, the two laws say: nothing happens in the world without energy conversion and entropy production. The consequences are firstly that every process of industrial and biotic production requires the input of energy, and secondly, because of the unavoidable ‘entropy production’, the valuable part of energy, called ‘exergy’ (or free energy) is transformed into useless heat at the temperature of the environment, called ‘anergy’, an usually matter is dispersed too.”
— Charles Hall (2011), Energy and the Wealth of Nations (pg. 133)

“The human economy uses fossil and other fuels to support and empower labor and to produce and utilize capital. Energy, capital, and labor are then combined to upgrade natural resources to useful goods and services. Therefore, economic production can be viewed as the process of upgrading matter into highly ‘ordered’, i.e. thermodynamically improbable, structures, both physical structures and information. Where the economist speaks of ‘adding value’ at successive stages of production, one may also speak of ‘adding order’ to matter through the use of free energy (exergy). The perspective of examining economics in the ‘hard sphere’ of physical production, where energy and material stocks and flows are important, is called ‘biophysical economics’. It must complement the social sphere perspective.”
— Charles Hall (2011), Energy and the Wealth of Nations (pg. 135)

These two quotes, combined, represent a confused mass of conceptual misunderstanding of how chemical thermodynamics actually applies to social systems firstly, and to economics, secondly. [8] These were the types of "vents" that Julian Simon repeated made against the Roegen-Daly school, in his battles with various economics, from 1981 to 1991, when he famously quipped that entropy and the second law is irrelevant to economics:

“With respect to [the Roegen-Daly view of] energy, there is no practical ‘boundary’ surrounding any [economic] unit of interest to us. And without such a boundary, the notion of entropy in the large is entirely irrelevant to us.”
— Julian Simon (1981), The Ultimate Resource 2 (pg. 79) [9]

Here, what he meant was that the Odum-Roegen-Daly interpretation of how economic and energy, as defined by thermodynamics, applies to ecologies and economies; hence, restated, the "Roegen-Daly view of entropy is entirely irrelevant to us", is what Simon was saying. We clarify this here, because the "entirely irrelevant" part of Simon's quote has been more than frequently taken out of context, to the effect that he denied the second law as being applicable to societies and economies; his point was that this has never been explained properly, and that the explanations that have been given are incorrect.