System description

Overview of the current economic system

In order to change something you need to see how it is from the start. We identify 21 vital flows in the system representing economic transactions and relationships to natural capital. The three main types of flow are:

  • Material flows, for example minerals, products, waste (in BLUE)
  • Flows of money representing economic transactions (in GREEN)
  • Work – selling of citizens’ time to firms and authorities (in RED)

The main system components at highest level with, for the system, important factors.

  1. Citizens. Each citizen except for the youngest has a bank account, and citizens own real estate, shares in firms and have jobs.
  2. Firms. For the purposes of this analysis units of production are called firms: private-owned companies, cooperatives, government and local government agencies as well as go producing organisations.
  3. National governments.
  4. Local authorities.
  5. Mineral capital.
  6. Living natural capital.

The main flows

  1. Firms provide services and products to citizens
  2. Citzens work for firms
  3. Firms harvest living material from natural capital as inputs for production and components of built capital.
  4. After use of products and services, citizens’ waste is taken care of by local authorities.
  5. Taxes gathered by national government go to financing local authorities’ services.
  6. Biological material from waste from citizens and firms is returned to natural living systems.
  7. Citizens work for local authorities.
  8. Money from national governments goes to firms as subsidies and payment for services.
  9. Money goes from firms to national governments as taxes and fees.
  10. Payment for services and products goes from citizens for to firms
  11. Minerals (metals and non metals) are mined or retrieved from waste and used as inputs to firms’ production.
  12. Local authorities return metals to stock for use in production.
  13. Citizens work for national government.
  14. Local authorities manage biological waste from firms’ activities
  15. Local authorities manage mineral waste from firms’ activities
  16. Resource from local authorities to firms
  17. Money from firms to citizens as wages for work among other things.
  18. Payments to local authorities as taxes and fees from citizens.
  19. Emissions and returns to natural living systems from firms
  20. Emissions and return to stocks of mineral capital from firms.
  21. Emissions from citizens to natural living systems by citizens direct.

There are a lot of things about this system that are dysfunctional for the way we as humans want to live. These articles dig deeper:
Disconnect analysis #1
Disconnect analysis #2

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