In thermodynamics, degradation, as in the act or process of degrading or decline to a low, destitute, or demoralized state, is a term commonly associated with entropy and the second law of thermodynamics. In fact, the second law is sometimes referred to as the “principle of degradation of energy”.
In 191, American mechanical engineer George Goodenough, in his textbook Principles of Thermodynamics, defined the idea of degradation of energy as such: 
“A classification of energy on the basis of complete conversion [is such that] energy that is capable of complete conversion, like mechanical and electrical, we may call high-grade energy; while heat, which is not capable of completed conversion, we may call low-grade energy. There seems to be in nature a universal tendency for energy to degenerate into a form less available for transformation. High-grade energy tends to degenerate into low-grade heat energy.”
Goodenough notes that the terms degradation of energy, dissipation of energy, and thermodynamic degeneration are applied by different writers to this same phenomenon, but concludes that the principle of degradation of energy may be stated as: “every natural process is accompanied by a certain degradation of energy or thermodynamic degeneration.” 
In human thermodynamics application, the view degradation was captured famously in the catchy 1919 title The Degradation of the Democratic Dogma, by American historian Henry Adams, themed on a second law degradation view of human history.  In the 1986 book The Control Revolution, American sociologist James Beniger defines the second law as such: 
“The so-called principle of the degradation of energy [states that] a system’s energy cannot be converted from one form to another—including work—without decreasing it organization and hence ability to do further work.”
In the 2005 book Into the Cool, American ecologist Eric Schneider argues that second law acts in material systems to “degrade the gradient” of heat flow from the sun. 
It is difficult to track down the etymological origin of this point of view, but it mostly seems to originate in the writings of Irish physicist William Thomson, to a good extent, although not exactly. 
1. Goodenough, George A. (1911). Principles of Thermodynamics (section: degradation of energy, pgs. 7-8). H. Holt and Co.
2. Adams, H. (1919). The Degradation of the Democractic Dogma. New York: Kessinger.
3. Beniger, James R. (1986). The Control Revolution: Technological and Economic Origins of the Information Society (thermodynamics, pgs. 36-37, 45-47, 55). Harvard University Press.
4. Schneider, Eric D. and Sagan, Dorion. (2005). Into the Cool - Energy Flow, Thermodynamics, and Life. Chicago: The University of Chicago Press.
5. Thomson, William. (1852). "On a Universal Tendency in Nature to the Dissipation of Mechanical Energy" (Google Books) (URL), Proceedings of the Royal Society of Edinburgh for April 19, 1852, also Philosophical Magazine, Oct. 1852, also Mathematical and Physical Papers, vol. i, art. 59, pp. 511.
● Einstein, Albert. (1905). “Review of G. H. Bryan, ‘The Law of Degradation of Energy as the Fundamental Principle of Thermodynamics’” (abstract) (“Das Gesetz von der Entwertung der Energie als Fundamentalprinzip der Thermodynamic,” in Neyer, S., ed., Festschrift. Ludwig Boltzmann gewidmet zum sechzigsten Geburistage 20. Feb. 1904. (Leibzig: J.A. Barth, 1904): 123-136) Beiblatter zu den Annalen der Physick 29 (1905): 237)].
● Brunhes, Bernard. (1908). La Degradation de l’Energie. E. Flammarion.