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Abstract
Energy has no place in economic theory despite that (i) goods are material rearrangements and (ii) humans can only rearrange matter with energy transfers. These principles can be implemented by modifying conventional neoclassical consumer and producer problems. The point of departure is the statement of an autarkic consumer's energy budget constraint, which implies that Pareto Efficiency requires energy surplus maximization and energy transfer minimization. The resolution of these problems provides insights into the role of energy in economic growth, price formation, the importance and limits of efficiency, and other economic phenomena. This approach broadens the understanding of economics, reconciles economics with natural sciences, interprets previous results relating energy and economics, and provides a basis for a general reinterpretation of economics as the interplay between human desires and thermodynamic processes.