SFEcon is an inquiry into the sources of order and stability in capitalist systems. Our Model 0 is intended to represent the minimal structure with which to embody the efficiency and sure-footedness of purely free markets in adapting to changes in manufacturing technique, demographic shifts, resource depletions, government activism, financial perfidy, etc.

Model 0 proceeds from classical economics’ assertion that material affairs organize around a central tendency toward general optimality. We presume to have added something to this most commonplace of economic generalities by exhibiting an efficient dynamic through which a physical input/output structure might proceed through all the chaotic states and disequilibrium prices leading to an equifinal result in Pareto optimality.

Where the classics analyze the macro economy as if optimal stasis were present, SFEcon presumes that economic science should be an emulation of the dynamic by which sectors’ asset levels are adjusted until every sector agrees as to the value of every commodity. If an economy is an array of assets, then a proper science of economics should be able to account for the amount of any given commodity in use by any given economic sector at any given time.

The desktop prototype 1 operating in a loop on our homepage details continuous physical and monetary rates of flow among economic sectors as they adjust asset levels and financial positions toward the general optimum implicit in their technical and utility tradeoffs (which present one degree of curvature per factor input). Our assertion that the result shown can be reproduced for international input/output structures of any complexity and numerical content constitutes a claim to have solved what is known most familiarly as the ‘economic computation’ or ‘socialist calculation’ or ‘Vienna’ problem.

Economic science, having long since passed-by the possibility of solving its calculation problem,2 can proclaim any such demonstration to be an amalgam of fraud and delusion. The most emphatic assertion of indissolubility arrives in the form of a certain ‘polynomial factoring’ problem, which must be preliminary to any possibility of economic calculation, and which is generally regarded as utterly indissoluble. Prospective auditors might therefore wish to inspect our closed-form solution to polynomial factoring before proceeding further.

The significant and active portion of economists describing themselves as ‘heterodox’ wishes us to know that solutions to economics' calculation problem are not only beyond reach, but also without application. This is because a presumption that economic order exists in decaying orbits focused on general optimality necessitates the activity of an ‘economic man’; and this indispensable creature of theory continues to elude discovery by behavioral psychologists. An article in reply to the case against homo economicus is available here. These and other received objections to SFEcon are given more leisurely treatments in other articles organized in the nearby Discussions Outline. This manifesto is completed by emphasizing certain habits of thought that have perhaps yet to be absorbed from the example of hard science.

SFEcon’s assertion that economics has more to gain than to lose through juxtapositions with hard science in the Western tradition creates a significant disconnect with the thinking of substantially all economists, most of whom would consider such stimuli to have been evaluated and properly absorbed long ago. With few exceptions, economists now proceed confidently in a discipline that knows itself to be both more and less than a true science. Economics is presumably more than science insofar as it ponders those aspects of material reality created on purpose by thinking beings. And it is certainly less than science insofar as its metaphors must remain mathematically indeterminate so as to properly reflect the freewill of its subjects.

Our insouciance toward these conventions might find welcome among those who do not accept that a properly considered ‘science’ of economics (or of anything else) should be riven by unmistakably religious disputes, occurring among mutually hostile sects, arguing not just the causality behind material order, but nothing less than the discipline’s very scope and purpose.

Those proceeding with us can expect to take away a distillation of as much of the economist’s milieu as might be formed into a system that is scientific in the sense of being precisely determined mathematically, thereby exhibiting behaviors that are entirely intrinsic, and therefore objectively comparable to exterior reality. While questions as to whether these comparisons are faithful and potentially useful will ultimately be dispositive of our enterprise, they are presently secondary to economics’ seemingly universal conviction that such comparisons will never be possible.

The tendency toward economic optimality is a self-evident generality akin to mechanics’ premise that things in motion tend to stay in motion. Neither of these conceptual fauna are found in the wilds of experience. They only materialize when conjured in highly contrived experiments that establish the default mode of a system, i.e.: what the system will do when nothing acts upon it.

The default mode does not assert a conceptual system’s behavior. Rather, it establishes the system’s conceptual potency by creating explicanda as to the system’s departures from, and returns to, its central behavioral tendency. Model 0’s portrait of efficient markets resembles physics’ conservation of momentum in this respect: where the latter demands realistic interpretations of that which follows upon an application of force to a moving body, the former demands an understanding of market distortions by establishing efficient markets as the macro economy's default behavior.

Science in the uniquely Western tradition always originates in some sort of Model 0, i.e., a primary demonstration of causation revealed only in highly contrived experiments. Elementary scientific principles disclosed in the lab are not expected to map directly onto perceived reality. Their significance is not intrinsic, but lies in the applications they enable. Economics’ Model 0 would achieve validity in terms of the effects it has on economic policies and on their acceptance.

In proposing a Model 0 for macroeconomic science, we presume to have isolated the essential devices that create order in economic systems by exercising them under the laboratory control imposed by physical analogs to abstract systems. Understood as the artificial ‘lab environment’ of macroeconomics, our essentially neoclassical Model 0 would not be mistaken for reality. Its causal premise of a mutual affinity between marginal revenues and marginal costs might then find a more appropriate role as a theoretical chassis upon which to build more expressive applications of economic science.

Model 0’s premise is that economic science should proceed from some such functioning embodiment of its normative case. A model that can navigate the dimension of time in an orderly and efficient manner is a serviceable base for more realistic models because 1) any prospectively ‘more realistic’ model can be created by structural departures from the normative Model 0, and 2) if more and more advanced models are realistic, they will presumably retain the mathematical integrity and dynamism of their antecedents. SFEcon Model 0 is therefore offered as a prospective Platonic form for capitalism: in order to become relevant this structure must be invested with the specifics of whatever circumstances one wishes to analyze.
1      This prototype is presented in an ordinary Excel workbook. Its
         VBasic programs are open-sourced (and will alert anti-virus software).
         Instructions for operating this instructional videogame are found in
         section II, pages 9-14 of this .pdf. The .pdf is essentially the Cliff’s
         notes for a course in international business economics that was
         once taught in the University of San Francisco’s MBA program. A more
         concise summary of Model 0’s mechanics is available here.
2       Ludwig von Mises: “Die Wirtschaftsrechnung im sozialistischen
         Gemeinwesen” Archiv für Sozialwissenschaften, vol. 47, 1920
          < http://mises.org/pdf/econcalc.pdf >