The consensus from the resource, environmental, and ecological economics literature is that the economic system resides inside the ecosystem. For example, Daly (1977) describes how the capital and wealth that ﬂows from households to ﬁrms takes place due to inputs such as solar energy and matter and then outputs it as waste heat and degraded matter. Hall et al. (1986) state that the
economic processes take place in the physical world and are subject to the same physical laws that operate on and constrain other physical, chemical, and biotic processes. As a result, the economic process ultimately is constrained by the laws of energy, which set limits on the availability and rate of throughput of matter and energy through the economy.