Completing the flows in 'embedded economy' schemes

The ‘Embedded Economy’ scheme is the most valuable contribution in the context of ‘Rethinking Economics’ because it has moved the focus from the functioning of markets to the awareness that a society has to manage the complete set of flows that determine the economic-societal system. Those flows are influenced not only by the functioning of markets but also by states, households, commons, and a lot of other centres of power.
A description / model of the economy in terms of flows is much more accessible and recognizable than the approach in the accepted economic theory where schemes of flows are scarce, not transparent, and the reality is hardly recognizable in them. The definition of the economic players has played neoliberal economics tricks all the time. But people to be initiated in economics need exactly information that brings overview and insight on their ‘blank slate’ before they can master more specific economic knowledge.
The flows in the central part of the ‘Embedded Economy’ scheme – which are many and diverse - are not shown because it takes a lot more space to present them properly. The Economic Reality System (ERS) is an economic-societal model based on a structured inventory of all flows occurring in the societal system. It is fit for ‘blank slates’ for it requires no preceding economic knowledge. The ERS is available on WWW.ECREALSYS.ORG. (27 A4’s including schemes).

Beque, I like your claims that it is by the use of flows that we can understand all about our social system of macroeconomics. I have further simplified this idea in my model to only 19 mutual (or double) flows passing between only 6 entities or agents. This is better explained in my working paper SSRN 2865571 “Einstein’s Criterion Applied to Logical Macroeconomics Modeling” available on the internet. This model has the advantage of being seamless, so the flows can be properly joined and balanced, which is a vital aspect of the way our system seeks (but hardly achieves) a state of equilibrium.:sunglasses:

Chester, I have read your paper SSRN2865571 and I can let you know that my ERS meets the two vital requirements for being a good model: it is presented via diagrams and it has the nature of a system. All players / entities in the system are connected via typical flows (not transactions) and on the macro-level I distinguish 5 groups: (family)households, government, financial institutions, for-profit enterprises, not-for-profit enterprises. The characteristic that makes (family)households special is that they are ‘populated’ (between 1 and x members) while all other groups are not.

Other classifications are possible but I have kept in mind the ‘blank slates’ that have to be filled and the higher the number the more complex diagrams become. The number of variations within those groups is unlimited; it causes no problem for all economic entities satisfy one and the same micro-economic model (UEM – universal enterprise model) to describe and explain structure and functioning. The UEM is also a model based on flows. The micro-schemes and the macro-schemes share the same legend.

In fact all economic entities fulfil with large variations four roles usually called: producing, consuming, ‘physically’ investing, and financially investing. In the most abstract version of the flow schemes all entities are characterized by: input, production, output.