ABSTRACT
The economic process is conceived of as a circular flow of value between families and firms in an isolated system. Families spend money to buy the goods firms produce and firms spend money to buy the factors families own and that are needed in production. Macroeconomics also originates in this vision because the aggregate circular flow of value, measured at product prices is national product, and when measured at factor prices it is national income. In the physical limits-to-growth vision, the economic process is conceived of as a uni-directional, entropic flow of matter and energy through an open subsystem, the economy, within a closed total system, the environment. In the steady state view the economy again is an open system maintained by an entropic flow of matter and energy from and back to the environment. There is no human rationality operating in the physical environment that would ensure that the least important ecosystem services are always sacrificed first.
