We begin with a commonplace presumption that economic science should be about the valuation of scarce things by economic beings. Our sense of the appropriate analytic frame in which to observe these quiddities has brought us to a global, macro perspective: unless all economic fauna are comprehended together with all the goods they produce, any process by which the former values the latter would remain open and necessarily incomplete. This perspective is closed by our choice of familiar economic sectors as the proper abstraction of economic beings, and by defining each sector in terms of the commodity it produces — thus establishing a global input/output structure as our analytic context.

Controversy begins when we describe an economic sector’s relation to its output commodity in terms of a production function (or utility function, in the case of a household sector). We then become firmly kedged in economics’ neoclassical mainstream by assigning every sector the sole motive of operating where marginal revenues equal marginal costs.

Though mindful of neoclassicism’s quaintness in the thinking of many economists, we nonetheless persist in our thinking that much productive work remains to be done in the way of expressing and parameterizing materialism’s most elementary causality. Model 0 has, for example, one property greatly sought-after by heterodox economists who would otherwise reject the entire marginalist oeuvre: all SFEcon models are mathematically determinant, dynamic systems. Model 0's behaviors are therefore entirely its own; and there is no arguing about what the model does because it expresses itself in the form of an instructional videogame.

As with any formal engineering dynamic system, Model 0 references certain boundary conditions in order to control its state variables as they pass along the dimension of time.

SFEcon’s boundary conditions are both spatial and temporal:

Parameters describing the sectors’ production and utility tradeoffs constitute a curving decision space for the model to explore. These utility parameters are measured in the commodities’ physical units; and we offer an empirical case that utility is a perfectly sound measure of economic potential.

Each commodity’s temporal identity is given by its intrinsic turnover rate, which is a dimensionless fraction per year.

States of the SFEcon models are both physical and monetary:

Physical states are given by the level of each commodity held by each sector.

Monetary states can be either . . .

Investment, the amount of money an industrial sector has spent (including costs of capital) but not yet earned; or

Savings, the amount of money a household sector has earned (including passive interest income) but not yet spent.

SFEcon portrays the sectors as continuously building-up and working-off their physical assets in search of the point on their respective indifference surfaces where marginal revenues equal marginal costs. These physical transactions always occur at the prices of the moment, thereby giving rise to money flows that continuously adjust the monetary state variables. Prices, interest rates, currency values, and the investment term are all matters of internal computation based on 1) the sectors’ ever-changing monetary states and 2) the local gradients of the sectors’ technical and utility tradeoffs, which are determined by physical states that are also changing with time.

Model 0 presents a continuum of disequilibrium prices and chaotic states through which the global economic system is maneuvered toward the unique general optimum implicit in its parameters. If a model’s parameters are artificially held constant, it’s adjustment processes will discover (and its state will then embody) a general economic optimum, viz.: the spectrum of prices and physical exchanges required for the unique steady state implicit in the manufacturing technique and popular preferences to which the system has been artificially constrained.

Our insistence that economics present itself as the science of value requires discovery of a generic price computation that is operative in guiding SFEcon’s physical and financial states into stasis. The principal burden of economic science then becomes one of understanding how markets operate to discover such prices.

This burden is in no sense eased by Austrian pronouncements about the miraculous properties of markets because, after all, There has never been a Miracle that noticeably resembled a Fact.¹ And heterodoxy’s mere scoffing at ‘the market’ as a sensible object for productive abstraction is no less sterile:

a disembodied decision maker – a  Maxwell's Demon – that, somehow, and without effort, balances and reflects the preferences of everyone participating in economic decisions . . . It can be these things precisely because it is nothing at all.²

An SFEcon model’s continuous awareness of its physical state means that each sector’s array of productive assets is always known. This knowledge, together with reference to boundary conditions forming the sectors’ production and utility tradeoffs, will continuously disclose every commodity J’s current rate of supply S_J. Defining markets by their intention to clear whatever supply is present, a market will presumably set prices P_J such that the amount in current supply S_J will be demanded.

In establishing this hopefully irreducible structure for a dynamic price computation, Model 0 brings together the two independently varying items of information for markets to resolve: 1) the instantaneous supply of a commodity J to be liquidated; and 2) the marginal values currently given to J by all the sectors to which J is input, where J’s demand schedule embodies these valuations.