ABSTRACT
The Physiocrats were the first to perceive the economy as a closed system of interdependent variables. The perception of production and reproduction as processes occurring in essentially closed and more or less self-regulatory systems served their pre-analytical notions and supported their normative policy judgements. Institutional and, to a lesser extent, Marxist economists have always criticised this narrow scope of conventional economic theory and have insisted that economic systems are parts of a much broader political and institutional system from which they receive important impulses and which they are capable of influencing and even changing in a variety of ways. Contemporary economists who continue to discuss economic and environmental problems in closed systems have much less of an excuse for this practice than the classical economists. The methodological and cognitive implications of the fact that economic systems are not closed but are fundamentally open systems would be far-reaching. The educational implications of the open-system character of the economy are equally far-reaching.
