Input-Output Analysis
Wassily Leontief received the 1973 Nobel Prize in Economics for his work to develop the input-output method, and applying this in an economic context. But the concept tracks back even further… and that could logically explain a few things.
This article requires the understanding of a few key concepts, which we will go through first. Don’t worry, they’re not particularly complex, but they’re centric to comprehending what’s taking place at present. And the following outline should make clear how input-output analysis in contemporary context connects with other commonly referred concepts, such as the Circular Economy, Spaceship Earth, Resilience, and… a Marxist Approach to Social Justice.
Of course, that the latter also appears to snap to contemporary developments in terms of ‘Human Rights’ and ‘Good Governance’… well, that’s just another coincidence.
Conceptualised in 1967, Arthur Koestler’s holon1 is a desription of a system (node) in a hierarchy, considered with all its hierarchical children. In the below, the blue system at the very top together with all its children in orange (subsystems), green (2nd order subsystems), and blue again (3rd order) together comprise a singular holon. Consequently, when pictured as the outermost blue sphere on the left, it includes all the other, smaller spheres - and that’s a holon.
But what matters further is that each individual subsystem of said holon (in orange) - and its respective subsystems - also holons of their own. Thus, an orange system in the below when taken together with its green subsystems and blue 2nd order subsystems also comprise a separate holon. And from the perspective of said orange holon, the blue system above is the supersystem. And that means that each individual orange sphere on the left (and each sphere within) constitutes a holon, where - again - the outer blue sphere is its supersystem.
What I say is that the relationship is entirely recursive, and can hypothetically go on forever - in both directions. When used in practical reality, however, it doesn’t.
The concept of a holon you’ll find of use in many relevant contexts, including Boulding’s General Systems Theory. Well, technically, Bertalanffy is credited as the father of GST, but I prefer to put it down to Boulding, because not only was it he who structured it hierarchically through his 1956 paper, ‘The Skeleton of Sciece’, but he’s also highly relevant in the context of Spaceship Earth - which also neatly ties in.
Another context in which we find it of frequent use, is through Ken Wilber’s Integral Theory2. But though that most certainly is not coincidental, it is outside the scope of this article. Ken will have to be exposed on another day.
A holon, in short, describes a system comprising everything within.
Input-Output Analysis is the study of flow. And while Leontief applied this in context of economics, others considered much the same in other fields. Howard T Odum, for instance, considered this in the field of ecology, which more formally became known as Systems Ecology. And should you put this concept into practice, and it becomes Applied Input-Output Analysis, more formally known as the Circular Economy. And this concepts has contemporaries, straddling diverse fields such as Circular Health3, Circular Water4, Circular Manufacturing5, even Circular Agriculture6.
But in order for a circular anything to exist, it needs measuring, though you can alternatively call it by its less palatable name - surveillance. And as these holons straddle all the way from Spaceship Earth and down to - in theory - its smallest living component, each needs to be continuously surveilled - all the way from live-streamed satellite surveillance feeds, to city IoT monitors, your internet connected thermostat - even… no, especially right down to your mobile phone and its associated social media sites. This - more palatably - is referred to as ‘citizen science’7.
But measuring input-output flow is only half the equation, because we also need to control said flow. And though relevant literature might refer to that as ‘processing’ or ‘regulating’, I prefer to describe it through an electric curcuit equivalent - inducting.
Systems Ecology8 is the study of energy flow in natural systems - ecosystems. And to this end, Howard T Odum came up with the concept of an energy systems language - energese9, which primarily is an application of electric curcuit theory to ecosystems. This language - energese - contains four primary concepts; capacitance, conductance, resistance and inductance. And these four can broadly be described as storage (buffer; capacitance), the potential for flow (conductance), the obstacles to flow (resistance), and the regulating mechanism (inductance).
In Odum’s famous Silver Springs study, these four can broadly be understood as -
Capacitance relates to biomass, accumulating energy through photosynthesis.
Conductance details how energy moves about in the system, from plant at the lowests level and up through the food chain.
Resistance considers predators, competition, or even environmental conditions, all acting to slow the energy flow conductance.
Inductance relates to controlling predator population, and in general ensuring a healthy and thriving environment.
Consequently, when we in the above speak of inductance in the context of regulating input-output flow, that framework applies to ecosystems just as well as in electric circuits - or even Leontief’s sphere of economics.
Now, consider inductance as a concept, seeking to broadly describe ensuring the optimal functioning of a system by redistributing existing energy (or material) within a holon. What that entails is likely taking surplus energy from one subsystem, and distributing it to another in deficit - ie, redistributing said energy. However, when referring to Spaceship Earth, this represents the very peak of the system, and consequently, cannot exchange material with any other sibling system. Spaceship Earth is - for lack of a better term - at Net Zero, because there’s no broad incoming transfer of material from the outside - apart from sunlight, of course. Spaceship Earth, thus, is a closed system, which is expressly what Kenneth Boulding told you already back in 1966 through his paper ‘The Economics of the Coming Spaceship Earth‘10, which went on to state -
‘The closed earth of the future requires economic principles which are somewhat different from those of the open earth of the past.‘
This, of course, carries slightly… socialist undertones - but let’s set that aside.
And Boulding’s principles were expanded upon in 1989, when Pearce/Turner released their highly influential work ‘Economics of natural resources and the environment‘11 which not only in detail refers to Boulding, but does so in the explicit context of a closed system, considering a Circular Economy.
Consequently, when we speak of a Circular Economy in context of a closed system (ie, Spaceship Earth), we speak of the continuous redistribution of material within Planet Earth aiding the objective of sustainability - and the net position of Earth in any context but sunlight will always be zero. Net Zero.
Of course, this doesn’t quite hold when you examine the facts, but let’s set that aside for the time being. The point here is to explain the world view of some.
A contemporary hot topic is that of resilience, typically in context of sustainability, economics, and even social systems. Resilience Theory describes the ability of a system - holon - to absorb externalities, typically by redistributing material and energy within said holon, thus not relying on the outside world - the supersystem. Consequently, Spaceship Earth refers to resilience theory on a planetary scale.
Now, consider Spaceship Earth in a geographical context and setting aside the seas we eventually arrive at the landmass of Earth - One World - which can be broken into components; One Europe12, One Africa13 and so forth. From One Europe you can then further subdivide, ie One France14, One Italy15, even One Germany16.
While Spaceship Earth relies on no net incoming transfers of material, One Asia might well. Consequently, Cybernetics in this regard is the term which best describe transferring energy both in and out of said holon. But as this describes a net transfer it must be external to the holon itself (as, per spaceship earth analogy, this is net zero) - consequently, the cybernetic exchange must be conducted by either the supersystem (logically making it an integral component of resilience itself), or be conducted by a wholly exterior system to both holon and its supersystem.
And that logically entails the the control structure for the individual holon is external, meaning that the control structure operates top-down. Or in even simpler terms - the model described is authoritarian.
Oh, before we move on, while you might not have heard of the ONE Campaign beyond it allegedly being about Bono17 wanting to save brazilions of rainforests, let’s have a quick look at the18 people19 who actually run the show in that regard.
I don’t know about you, but I’m definitely convinced. An ethical endeavour indeed.
Now, let’s consider the cybernetic transfer of energy from the perspective of the recipient holon, which will receive a quanta of material or energy (the input), but likewise expected to contribute some in return to the supersystem (the output). This receive-contribute relationship can also be understood as the relation between distributive and contributive… justice, which would make the net position - the delta between the input and outputs, the contributive and distributive - the equivalent of equity.
And extending this concept even further into the social strata - a holon which honours the agreement by outputting the expected level of contributive justice can be said to live with dignity. And the holons which do can be considered to work for the common good.
And determining the appropriate level of equity - the quantity of inputs relative to outputs as judged by either the supersystem or an external organ - can be considered the establishment of contextual reality.
And if it wasn’t wholly obvious where I’m going with this - all of this goes to describe a Marxist approach to Social Justice, or as Karl Marx’s famous phrase goes -
‘from each according to his ability (contributive), to each according to his needs (distributive)‘.
Finally, in order to regulate - induct - the cybernetic exchange, the supersystem must have a concise view of available surveillance information - Information Theory. And that, too, is gathered through first requesting all available information of its subsystems, and then processing through modelling - General Systems Theory - leading to forward prediction - the Digital Twin.
And this information can then be further masked through an Information Clearinghouse, ensuring you have ‘The Right to Access to Information’20… with suitable ‘exemptions’ obviously ripe for abuse.
Consequently, what this all goes to show is that when speaking of ‘The Circular Economy’, what is actually meant is surveillance and control, in context of a Marxist Approach to Social Justice.
And - sure - this might appear somewhat exaggerated. And I’m sure it won’t be fully authoritarian… well, at least for a while, because - of course - the outright authoritarian elements will be very subtly, and very gradually introduced… probably through something made to sound… wholesome, and… caring… and ethic.
Especially that.
But the point is that the imposition of the principles of Circular Economics grounded in input-output analysis will lead to a control structure ultimately directed top-down - or at least, entirely has the capacity to be - as the surveillance information gathered on any holon - including you and your family - will be judged externally, meaning you won’t have a say should your taxes suddenly double due to, say, alleged conservation of biological diversity in a 3rd world nation.
And in that context, let’s take a second look at the ‘2050 CBD Vision’, previously covered in the context of the UNFCCC/CBD synthesis -
‘To meet this vision, the entire planet must be managed sustainably, supported by truly sustainable production and consumption, a circular economy, and the sustainable and equitable sharing of benefits from nature‘
The sustainable management of the planet relies on the circular economy, and this yields sustainable production and consumption, leading to human well-being, or from the document itself -
‘… realizing the Sustainable Development Goals, as a diverse and healthy planet and is the foundation of human health, security, well-being and development‘
And before we move on - do appreciate that the below ‘Vision for 2050’ maps to the electric curcuit equivalents, as -
Natural resource base is the equivalent to capacitance
Sustainable production and consumption matches conductance
Human well-being is resistance, and
Governance and means of implementation is the equivalent of inductance.
Once you spot this pattern, you’ll find… er, a great many coincidences. And alleged hoaxes, too. Especially those.
But let’s go even further back; first to 1976 and the ‘Report of Habitat: United Nations Conference on Human Settlements’21, and then 1982 and the ‘World Charter for Nature‘22 - if for no other reason but to show exactly how far in advance they plan.
First, from Habitat we have -
‘Land, because of its unique nature and the crucial role it plays in human settlements, cannot be treated as an ordinary asset, controlled by individuals and subject to the pressures and inefficiencies of the market… Social justice, urban renewal, and development, the provision of decent dwellings and healthy conditions for the people can only be achieved if land is used in the interests of society as a whole‘
There are plenty of other questionable bits in the document, and to give just one more example -
‘Publis ownership of land is justified and should be exercised in the interest of the society and private land ownership should be regulated and made to conform with the economic and social development requirements of a country.‘
Sure, it’ll start slow, but eventually we’ll end up with… a World Charter -
‘The allocation of areas of the earth to various uses shall be planned and due account shall be taken of the physical constraints, the biological productivity and diversity and the natural beauty of the areas concerned.‘
They won’t outlaw private ownership on day one. They’ll state that a region has to, say, reserve 30% for nature23, which will hits overpopulated, agricultural nations like the Netherlands hard24. Incidentally, Denmark - you’re next25.
Oh, incidentally, I seem to recall the Dutch government26 attempting to steal faming lands27 though obviously subtly reframed28 to appear as though wanting to invade Poland by the media29, because Marxist psychopaths are pathological liars, and anyone who isn’t a fellow Marxist is ‘far right’.
But the 1982 document keeps on delivering -
‘Living resources shall not be utilized in excess of their natural capacity for regeneration;‘
Ie, sustainable production and consumption (Vision for 2050 above).
‘Resources, including water, which are not consumed as they are used shall be reused or recycled;‘
Ie, a circular water economy30.
And a final quote -
‘The status of natural processes, ecosystems and species shall be closely monitored to enable early detection of degradation or threat, ensure timely intervention and facilitate the evaluation of conservation policies and methods.‘
Fine grained surveillance, followed by detection and intervention - ie, digital twin modelling and regulation, ie inductance.
You can remain in denial for as long as you desire. But there is absolutely no shortage of material in this regard - and referenced material above came primarily courtesy of the United Nations itself or agencies thereof - such as the Convention on Biological Diversity, whose primary document - The Ecosystem Approach - is ultimately about top-down land management. I can further drag in this OHCHR document from 2024 which outlines ‘The Right to a Healthy Environment’31 which further goes to state that -
‘… the right also guarantees environments that are ecologically healthy, regardless of direct impacts on people’.
And we could even carry on with various other official documents, outlining forced32 relocation33 on grounds of alleged disasters - such as climate change34.
But ultimately - though 1982 and 1976 may appear early, the 1968 UNESCO Biosphere Conference laid it out plain for all to see, through rec. 3.3 -
And should that not quite convince, I could further point out that 3.2 explicitly speaks of ‘zoonotic diseases’, thus linking the alleged pandemic. But, in truth - that entire document is absolutely incredible. It genuinely is.
But let’s head back to the World Charter for Nature, which states that -
‘… man's needs can be met only by ensuring the proper functioning of natural systems‘
Which comes down to input-output analysis, surveillance, and the inductance as detailed above, and -
‘… by respecting the principles set forth in the present Charter.‘
Which (also detailed above) unequivacally demands that -
‘The altocation of areas of the earth to various uses shall be planned‘
1989 saw the release of a paper, titled ‘A note on the origins of Input-Output Analysis, and the contribution of the early Soviet Economists: Chayanov, Bogdanov, and Kritsman’35.
… let’s have a quick look -
‘In 1921, however, an important and apparently independent contribution to the input-output concept really was made by A. A. Bogdanov.’
The title of the paper gave it away, so do try to act a bit surprised, at least.
’Bogdanov is mostly known for his Tektologiya, in which the foundations of general systems theory were laid‘
Indeed it was.
‘In January 1921 Bogdanov made a report to a conference on Scientific Organisation of Labour and Production Processes, in which he proposed a system of planning. The core of his approach was the idea of chain links between the branches of the economy. The existence of such links, including feedbacks, determines certain proportions in the economy. The possible expansion of production of some product will, for example, depend on the most scarce input factor. This rule Bogdanov named 'the law of the minimum'‘
It’s about scarce inputs in the supply chains, and given inputs, logically he must also have considered outputs as when considering a supply chain - outputs from one link ARE the inputs for the next.
‘The starting point of Bogdanov's planning procedure was the calculation of final requirements of the population. To meet them, consumer goods must be produced and this means the use of producer goods. Their production, in turn, demands other producer goods. Thus, the elaboration of the plan is an iterative procedure‘
Outputs become inputs.
‘Bogdanov does not use the term 'technological' or 'input-output' coefficients, but he says that for the output of a product, calculated inputs of certain other products are needed. This was an important contribution to the elaboration of the ideas underlying input-output analysis‘
And there you go. Whether it’s of importance that he stated the term explicitly… well, we’ll return to that in a minute.
‘Remington has analysed the impact of Kritsman's as well as Bogdanov's ideas on Soviet planning. Although he did not explicitly connect their approach to the development of input-output analysis, he understood that the iterative procedure proposed by Bogdanov and Kritsman 'is the "missing link" between the hazy visions of a national economic table of Quesnay or Marx and the innovative efforts by Groman, Bazarov and other Gosplan leaders in the 1920s to devise a "balance" method of planning'‘
In other words - though Remington did not explicitly state this being input-output analysis… well, what else could it be?
Incidentally, around the same time Bogdanov also penned a paper on the ‘Theory of Equilibrium‘36. And as Bogdanov was a scientists first, and - unlike later papers with the same title - didn’t explicitly and wholly artificially fuse Marxist ideology into his efforts, his theory of equilibrium states that all systems - regardless of type - strive to achieve a state of equilibrium within its environment, which in context of nature is related to the concept of autopoesis. And to this end, this called for the balancing of inputs with outputs.
… and all of this… just a tad sounds like the Aristotelian golden mean and Stoic principles, which… again is… somewhat of interest.
As for Wassily Leontief, he emigrated from Russia in 1925, initially going to Berlin and later America in 1931. In 1936 he released the paper ‘Quantitative Input and Output Relations in the Economic Systems of the United States‘37, followed by ‘Structure of American Economy, 1919–1929: An Empirical Application of Equilibrium Analysis‘38 in 1941, and in 1948 the Harvard Study we previously discussed kicked off, culminating with the 1953 release of ‘Studies in the Structure of the American Economy‘39.
But he also released a paper in 1938, which should have raised an eyebrow40.
But what’s the backstory? How did he come up with the idea? Per the book ‘Wassily Leontief and Input-Output Economics‘41 -
‘Leontief indicated that his development of the input-output model of an economy was influenced by Quesnay and Walras, not by Marx, and that he conceived of the input-output structure in 1927 at the Institute for World Economics in Kiel, Germany, after leaving Russia in 1925‘
Oh, it definitely wasn’t Marx. In fairness, he was probably repeatedly asked that question, because there are parallels. It’s just that… they potentially went through Marx’s evoluted intermediary… Bogdanov.
It all seems… a bit coincidental. But information relating to his time in Russia prior to leaving for Germany is… hard to come by. But there are snippets, here and there, such as this one, courtesy of the book ‘Input-output Economics: Theory And Applications - Featuring Asian Economies‘42 -
‘Input–output analysis was invented by Wassily Leontief, who received the Nobel Prize for this achievement in 1973. Rudimentary ideas came about when Leontief (1925) thought through the problem of setting up national accounts in the Soviet Union. Input–output analysis orders national accounts in a suggestive way, which is useful for planning.‘
This would have been just a few years after Bogdanov circulated his theories. And when Bogdanov died in 1928, no-one would have audibly objected to plagiarism. Not that I suggest his death was somehow connected, but I will argue that it’s entirely possible that Leontief - being a student at the time - would have had access Bogdanov’s papers, and decided to release the idea as his own. There’s certainly remarkable conceptual overlap.
Or - more conspiratorially, perhaps - that even the idea was seeded by intent, right around the same time, Bertalanffy started to conceptualise General Systems Theory… and Keynes introduced his General Theory… which ultimately describes economic inductance through countercyclical fiscal policy.
But from a logical perspective - tracking input-output analysis back to Bogdanov shouldn’t come as much of a surprise. Because with his Tektology going on to become a foundational inspiration leading to General Systems Theory and Cybernetics, Input-Output Analysis perfectly fits into this puzzle. Because if you consider an artery a conceptual vessel of flow and blood describing said flow, then General Systems Theory logically describes said arteries, while Cybernetics - and resilience theory - describes the flow itself. And measuring that flow is input-output analysis.
In other words, General Systems Theory is functionally useless without Cybernetics, and as is Tektology without Input-Output Analysis.
The two logically operate as a pair.
Now, it’s at this stage you may wonder precisely where am I going with this? Well… really rather a lot of places, but this article ends here.
Tektology and I/O analysis - when combined - underpin the Fourth Industrial Revolution, Adaptive Management, resilience, planetary boundaries, and so much more - not forgetting the Total Human Ecosystem, and ultimately - Teilhard de Chardin. But before we go there, let’s return to the 1950s, because we already discussed something… which appears highly relevant in this context.
Specifically, something which explicitly refers to -
Wasiliy Leontief
Input-output analysis
The electric curcuit equivalent
Energy flows
Systems Ecology
… and other related items.
But… actually… don’t go there. Because it’s ‘definitely a hoax’, and you might be called names, should you revisit… Silent Weapons for Quiet Wars.
Heh, Science or Wizardry?
Thesis: Science
Antithesis: Wizardry
Synthesis: Wizard's Science: https://x.com/VisibleTrouble/status/1816713154656628889