Thinking in Systems

—— A Primer ——

Audiobook Supplement

Donella H. Meadows

Edited by Diana Wright,

Sustainability Institute

CHELSEA GREEN PUBLISHING

WHITE RIVER JUNCTION, VERMONT
Copyright © 2008 by Sustainability Institute. All rights reserved.

No part of this book may be transmitted or reproduced in any form by any means without
permission in writing from the publisher.

First printing, December, 2008

Library of Congress Cataloging-in-Publication Data

Meadows, Donella H.
 Thinking in systems : a primer / Donella H. Meadows ; edited by Diana Wright.
      p. cm.
 Includes bibliographical references.
 ISBN 978-1-60358-055-7
1. System analysis—Simulation methods 2. Decision making—Simulation methods 3. Critical
thinking—Simulation methods 4. Sustainable development—Simulation methods. 5. Social sciences—
Simulation methods. 6. Economic development—Environmental aspects—Simulation methods. 7.
Population—Economic aspects—Simulation methods. 8. Pollution—Economic aspects—Simulation
methods. 9. Environmental education—Simulation methods.  I. Wright, Diana. II. Title.
 QA402.M425 2008
 003—dc22
                                                           2008035211

Chelsea Green Publishing

85 North Main Street, Suite 120
White River Junction, VT 05001
(802) 295-6300
www.chelseagreen.com

Part of this work has been adapted from an article originally published under the title “Whole Earth
Models and Systems” in Coevolution Quarterly (Summer 1982). An early version of Chapter 6 appeared
as “Places to Intervene in a System” in Whole Earth Review (Winter 1997) and later as an expanded
paper published by the Sustainability Institute. Chapter 7, “Living in a World of Systems,” was origi-
nally published as “Dancing with Systems” in Whole Earth Review (Winter 2001).
 LIST OF FIGURES

Chapter One: The Basics

STOCK-AND-FLOW BASICS
How to Read | 1
Minerals | 1
Bathtub | 1
Bathtub (Over Time) | 2

FEEDBACK LOOPS
How to Read | 3
Energy Level of Coffee Drinker | 3
Temperature of Coffee | 4
Temperature of Coffee (Over Time) | 4
Interest-Bearing Bank Account | 5
Interest-Bearing Bank Account (Over Time) | 5
Reinvestment in Capital | 6

Chapter Two: A Brief Visit to the Systems Zoo

TWO COMPETING BALANCING LOOPS
Thermostat | 6
Thermostat in Well-Insulated House (Over Time) | 7
Thermostat in Leaky House (Over Time) | 7

ONE REINFORCING LOOP AND ONE BALANCING LOOP

Population | 8
Population (Over Time) | 8
Economic Capital | 9
Economic Capital (Over Time) | 9
Dealership Inventory | 10
Dealership Inventory with Delays | 10
Dealership Inventory with Delays (Over Time) | 11
A RENEWABLE STOCK CONSTRAINED BY A NONRENEWABLE STOCK
Economic Capital | 12
Economic Capital (Over Time) | 13
Price with Increasing Scarcity (Over Time) | 14

A RENEWABLE STOCK CONSTRAINED BY A RENEWABLE STOCK

Economic Capital | 15
Economic Capital (Over Time)| 16

Appendix
System Definitions: A Glossary | 17
Summary of Systems Principles | 18
Springing the System Traps | 21
Places to Intervene in a System | 24
Guidelines for Living in a World of Systems | 24
 stock
inflow outflow

Figure 1. How to read stock-and-flow diagrams. In this book, stocks are shown as boxes, and
flows as arrow-headed “pipes” leading into or out of the stocks. The small T on each flow signi-
fies a “faucet;” it can be turned higher or lower, on or off. The “clouds” stand for wherever the
flows come from and go to—the sources and sinks that are being ignored for the purposes of
the present discussion.

mineral
deposit
mining

Figure 2. A stock of minerals depleted by mining.

water
in tub
inflow outflow

Figure 3. The structure of a bathtub system—one stock with one inflow and one outflow.

1
 10

8
gallons/minute

6 outflow

2
inflow

0
0 2 4 6 8 10
minutes

50
stock of water in the tub
40

30
gallons

20

10

0
0 2 4 6 8 10
minutes

Figure 4. Constant outflow, inflow turned on after 5 minutes, and the resulting changes in the
stock of water in the tub.

2
 inflow

stock

outflow

stock

Figure 5. How to read a stock-and-flow diagram with feedback loops. Each diagram distin-
guishes the stock, the flow that changes the stock, and the information link (shown as a thin,
curved arrow) that directs the action. It emphasizes that action or change always proceeds
through adjusting flows.

metabolic
mobilization energy
of energy expenditure
stored energy energy
in body available
for work

coffee intake B
desired
energy level

discrepancy

Figure 6. Energy level of a coffee drinker.

3
 cooling heating
coffee coffee
temperature temperature

B B
room room
temperature temperature
discrepancy discrepancy

Figure 7. A cup of coffee cooling (left) or warming (right).

100

80
temperature (ºC)

60
hot coffee cooling
40

20 room temperature = 18ºC

iced coffee warming

0
0 2 4 6 8
minutes

Figure 8. Coffee temperature as it approaches a room temperature of 18°C.

4
 interest added
money in
bank account

interest rate R

Figure 9. Interest-bearing bank account.

350
$313.84
300 10% interest

250 $251.82
8% interest
200 $201.22
6% interest
dollars

$160.10
150 4% interest
$126.82
100 2% interest

50

0
0 3 6 9 12
years

Figure 10. Growth in savings with various interest rates.

5
 investment

capital

R
fraction of
output invested
output

Figure 11. Reinvestment in capital.

heat from furnace heat to outside

room
temperature

thermostat setting outside temperature

B B

discrepancy between discrepancy between

desired and actual inside and outside
room temperatures temperatures

Figure 12. Room temperature regulated by a thermostat and furnace.

6
 20 thermostat setting 68

15 room temperature 59
temperature ºC

10 50

temperature ºF
5 41
outside temperature
0 32

-5 23
0 6 12 18 24
hour

Figure 13. The furnace warms a cool room, even as heat leaks from the room and outside
temperatures drop below freezing.

20 thermostat setting 68

15 59
room temperature
temperature ºF
temperature ºC

10 50

5 41
outside temperature
0 32

-5 23
0 6 12 18 24
hour

Figure 14. On a cold day, the furnace can’t keep the room warm in this leaky house!

7
 25
births deaths

population

25
R B
fertility 0 mortality
2000 2120

Figure 15. Population governed by a reinforcing loop of births and a balancing loop of deaths.

A: Growth 025
2000 2120

25

0
2000 2120

B: Decline 25
0
2000 2120

025
2000 2120

C: Stabilization 25

0
2000 2120
25
0
2000 2120

Figure 16. Three possible behaviors of a population: growth, decline, and stabilization.

025
2000 2120
8
 investment depreciation
capital
stock

R B
investment capital
fraction annual lifetime
output

output
per unit
capital

Figure 17. Like a living population, economic capital has a reinforcing loop (investment of
output) governing growth and a balancing loop (depreciation) governing decline.

300

200
capital stock

20-year lifetime

100
15-year lifetime
10-year lifetime
0
0 10 20 30 40 50
years

Figure 18. Growth in capital stock with changes in the lifetime of the capital. In a system
with output per unit capital ratio of 1:3 and an investment fraction of 20 percent, capital with
a lifetime of 15 years just keeps up with depreciation. A shorter lifetime leads to a declining
stock of capital.

9
 deliveries sales

inventory of
cars on the lot

B B customer
orders demand
to factory
discrepancy perceived sales

desired
inventory

Figure 19. Inventory at a car dealership is kept steady by two competing balancing loops, one
through sales and one through deliveries.

delivery
delay deliveries sales

inventory of
cars on the lot

B B customer
orders demand
to factory
discrepancy perceived sales

response desired
delay inventory perception
delay

Figure 20. Inventory at a car dealership with three common delays now included in the picture—
a perception delay, a response delay, and a delivery delay.

10
 60 A: Sales and perceived sales

45
cars per day

30

15

0
0 10 20 30 40 50 60 70 80 90 100
days

60 B: Orders and deliveries

45
cars per day

30

15

0
0 10 20 30 40 50 60 70 80 90 100
days

Figure 21. The response of orders and deliveries to an increase in demand. A shows the small
but sharp step up in sales on day 25 and the car dealer’s “perceived” sales, in which she averages
the change over 3 days. B shows the resulting ordering pattern, tracked by the actual deliveries
from the factory.

11
 growth goal
investment depreciation

capital

R B capital
lifetime

profit

price
B

yield
per unit
capital

resource
extraction

Figure 22. Economic capital, with its reinforcing growth loop constrained by a nonrenewable
resource.

12
A: Extraction rate 200

100

0
0 25 50 75 100
years
B: Capital stock 200

100

0
0 25 50 75 100
years
C: Resource stock 1000

500

0
0 25 50 75 100
years

Figure 23. Extraction (A) creates profits that allow for growth of capital (B) while depleting the
nonrenewable resource (C). The greater the accumulation of capital, the faster the resource is
depleted.

13
A: Extraction rate
200

100

0
0 25 50 75 100
years

B: Capital stock 200

100

0
0 25 50 75 100
years

C: Resource stock
1000

500

0
0 25 50 75 100
years

Figure 24. As price goes up with increasing scarcity, there is more profit to reinvest, and the
capital stock can grow larger (B) driving extraction up for longer (A). The consequence is that
the resource (C) is depleted even faster at the end.

14
 growth goal
investment depreciation

capital

R B capital
lifetime

profit

price B

yield
per unit
capital

regeneration

resource
harvest

regeneration
rate

Figure 25. Economic capital with its reinforcing growth loop constrained by a renewable
resource.

15
A: Harvest rate 400

200

0
0 25 50 75 100 125 150
years

B: Capital stock 2000

1000

0
0 25 50 75 100 125 150
years

C: Resource stock

1000

500

0
0 25 50 75 100 125 150
years

Figure 26. Annual harvest (A) creates profits that allow for growth of capital stock (B), but the
harvest levels off, after a small overshoot in this case. The result of leveling harvest is that the
resource stock (C) also stabilizes.

16
 Appendix

System Definitions: A Glossary

Archetypes: Common system structures that produce characteristic

patterns of behavior.
Balancing feedback loop: A stabilizing, goal-seeking, regulating feedback
loop, also know as a “negative feedback loop” because it opposes, or
reverses, whatever direction of change is imposed on the system.
Bounded rationality: The logic that leads to decisions or actions that make
sense within one part of a system but are not reasonable within a broader
context or when seen as a part of the wider system.
Dynamic equilibrium: The condition in which the state of a stock (its level
or its size) is steady and unchanging, despite inflows and outflows. This
is possible only when all inflows equal all outflows.
Dynamics: The behavior over time of a system or any of its components.
Feedback loop: The mechanism (rule or information flow or signal) that
allows a change in a stock to affect a flow into or out of that same stock.
A closed chain of causal connections from a stock, through a set of deci-
sions and actions dependent on the level of the stock, and back again
through a flow to change the stock.
Flow: Material or information that enters or leaves a stock over a period
of time.
Hierarchy: Systems organized in such a way as to create a larger system.
Subsystems within systems.
Limiting factor: A necessary system input that is the one limiting the activ-
ity of the system at a particular moment.
Linear relationship: A relationship between two elements in a system that
has constant proportion between cause and effect and so can be drawn
with a straight line on a graph. The effect is additive.
Nonlinear relationship: A relationship between two elements in a system
where the cause does not produce a proportional (straight-line) effect.
Reinforcing feedback loop: An amplifying or enhancing feedback loop,
also known as a “positive feedback loop” because it reinforces the direc-
tion of change. These are vicious cycles and virtuous circles.

17
Resilience: The ability of a system to recover from perturbation; the ability
to restore or repair or bounce back after a change due to an outside force.
Self-organization: The ability of a system to structure itself, to create new
structure, to learn, or diversify.
Shifting dominance: The change over time of the relative strengths of
competing feedback loops.
Stock: An accumulation of material or information that has built up in a
system over time.
Suboptimization: The behavior resulting from a subsystem’s goals domi-
nating at the expense of the total system’s goals.
System: A set of elements or parts that is coherently organized and inter-
connected in a pattern or structure that produces a characteristic set of
behaviors, often classified as its “function” or “purpose.”

Summary of Systems Principles

Systems
• A system is more than the sum of its parts.
•M  any of the interconnections in systems operate through the
flow of information.
•T  he least obvious part of the system, its function or purpose,
is often the most crucial determinant of the system’s behavior.
• S ystem structure is the source of system behavior. System
behavior reveals itself as a series of events over time.

Stocks, Flows, and Dynamic Equilibrium

• A stock is the memory of the history of changing flows within
the system.
• I f the sum of inflows exceeds the sum of outflows, the stock
level will rise.
• I f the sum of outflows exceeds the sum of inflows, the stock
level will fall.
• I f the sum of outflows equals the sum of inflows, the stock
level will not change — it will be held in dynamic equilibrium.

18
 • A stock can be increased by decreasing its outflow rate as well
as by increasing its inflow rate.
• Stocks act as delays or buffers or shock absorbers in systems.
• S tocks allow inflows and outflows to be de-coupled and inde-
pendent.

Feedback Loops
• A feedback loop is a closed chain of causal connections from
a stock, through a set of decisions or rules or physical laws or
actions that are dependent on the level of the stock, and back
again through a flow to change the stock.
•B  alancing feedback loops are equilibrating or goal-seeking
structures in systems and are both sources of stability and
sources of resistance to change.
•R  einforcing feedback loops are self-enhancing, leading to
exponential growth or to runaway collapses over time.
•T  he information delivered by a feedback loop—even
nonphysical feedback—can affect only future behavior; it
can’t deliver a signal fast enough to correct behavior that
drove the current feedback.
• A stock-maintaining balancing feedback loop must have its
goal set appropriately to compensate for draining or inflow-
ing processes that affect that stock. Otherwise, the feedback
process will fall short of or exceed the target for the stock.
• S ystems with similar feedback structures produce similar
dynamic behaviors.

Shifting Dominance, Delays, and Oscillations

•C  omplex behaviors of systems often arise as the relative
strengths of feedback loops shift, causing first one loop and
then another to dominate behavior.
• A delay in a balancing feedback loop makes a system likely to
oscillate.
•C  hanging the length of a delay may make a large change in the
behavior of a system.

19
Scenarios and Testing Models
• S ystem dynamics models explore possible futures and ask
“what if ” questions.
•M  odel utility depends not on whether its driving scenarios are
realistic (since no one can know that for sure), but on whether
it responds with a realistic pattern of behavior.

Constraints on Systems
• I n physical, exponentially growing systems, there must be at
least one reinforcing loop driving the growth and at least one
balancing loop constraining the growth, because no system
can grow forever in a finite environment.
• Nonrenewable resources are stock-limited.
• Renewable resources are flow-limited.

Resilience, Self-Organization, and Hierarchy

• There are always limits to resilience.
• S ystems need to be managed not only for productivity or
stability, they also need to be managed for resilience.
• S ystems often have the property of self-organization—the
ability to structure themselves, to create new structure, to
learn, diversify, and complexify.
•H  ierarchical systems evolve from the bottom up. The purpose
of the upper layers of the hierarchy is to serve the purposes of
the lower layers.

Source of System Surprises

• Many relationships in systems are nonlinear.
•T  here are no separate systems. The world is a continuum.
Where to draw a boundary around a system depends on the
purpose of the discussion.
• At any given time, the input that is most important to a
system is the one that is most limiting.
• Any physical entity with multiple inputs and outputs is
surrounded by layers of limits.
• There always will be limits to growth.

20
 • A quantity growing exponentially toward a limit reaches that
limit in a surprisingly short time.
• When there are long delays in feedback loops, some sort of
foresight is essential.
•T  he bounded rationality of each actor in a system may not
lead to decisions that further the welfare of the system as a
whole.

Mindsets and Models

• Everything we think we know about the world is a model.
• Our models do have a strong congruence with the world.
• Our models fall far short of representing the real world fully.

Springing the System Traps

Policy Resistance
Trap: When various actors try to pull a system state toward various goals,
the result can be policy resistance. Any new policy, especially if it’s effec-
tive, just pulls the system state farther from the goals of other actors and
produces additional resistance, with a result that no one likes, but that
everyone expends considerable effort in maintaining.
The Way Out: Let go. Bring in all the actors and use the energy formerly
expended on resistance to seek out mutually satisfactory ways for all goals
to be realized—or redefinitions of larger and more important goals that
everyone can pull toward together.

The Tragedy of the Commons

Trap: When there is a commonly shared resource, every user benefits
directly from its use, but shares the costs of its abuse with everyone else.
Therefore, there is very weak feedback from the condition of the resource
to the decisions of the resource users. The consequence is overuse of the
resource, eroding it until it becomes unavailable to anyone.
The Way Out: Educate and exhort the users, so they understand the
consequences of abusing the resource. And also restore or strengthen the
missing feedback link, either by privatizing the resource so each user feels

21
 the direct consequences of its abuse or (since many resources cannot be
privatized) by regulating the access of all users to the resource.

Drift to Low Performance

Trap: Allowing performance standards to be influenced by past perfor-
mance, especially if there is a negative bias in perceiving past performance,
sets up a reinforcing feedback loop of eroding goals that sets a system drift-
ing toward low performance.
The Way Out: Keep performance standards absolute. Even better, let
standards be enhanced by the best actual performances instead of being
discouraged by the worst. Set up a drift toward high performance!

Escalation
Trap: When the state of one stock is determined by trying to surpass the
state of another stock—and vice versa—then there is a reinforcing feed-
back loop carrying the system into an arms race, a wealth race, a smear
campaign, escalating loudness, escalating violence. The escalation is expo-
nential and can lead to extremes surprisingly quickly. If nothing is done,
the spiral will be stopped by someone’s collapse—because exponential
growth cannot go on forever.
The Way Out: The best way out of this trap is to avoid getting in it. If
caught in an escalating system, one can refuse to compete (unilaterally
disarm), thereby interrupting the reinforcing loop. Or one can negotiate a
new system with balancing loops to control the escalation.

Success to the Successful

Trap: If the winners of a competition are systematically rewarded with
the means to win again, a reinforcing feedback loop is created by which, if
it is allowed to proceed uninhibited, the winners eventually take all, while
the losers are eliminated.
The Way Out: Diversification, which allows those who are losing the
competition to get out of that game and start another one; strict limita-
tion on the fraction of the pie any one winner may win (antitrust laws);
policies that level the playing field, removing some of the advantage of the
strongest players or increasing the advantage of the weakest; policies that
devise rewards for success that do not bias the next round of competition.

22
Shifting the Burden to the Intervenor
Trap: Shifting the burden, dependence, and addiction arise when a solu-
tion to a systemic problem reduces (or disguises) the symptoms, but does
nothing to solve the underlying problem. Whether it is a substance that
dulls one’s perception or a policy that hides the underlying trouble, the
drug of choice interferes with the actions that could solve the real problem.
If the intervention designed to correct the problem causes the self-main-
taining capacity of the original system to atrophy or erode, then a destruc-
tive reinforcing feedback loop is set in motion. The system deteriorates;
more and more of the solution is then required. The system will become
more and more dependent on the intervention and less and less able to
maintain its own desired state.
The Way Out: Again, the best way out of this trap is to avoid getting in.
Beware of symptom-relieving or signal-denying policies or practices that
don’t really address the problem. Take the focus off short-term relief and
put it on long-term restructuring.
If you are the intervenor, work in such a way as to restore or enhance the
system’s own ability to solve its problems, then remove yourself.
If you are the one with an unsupportable dependency, build your
system’s own capabilities back up before removing the intervention. Do it
right away. The longer you wait, the harder the withdrawal process will be.

Rule Beating
Trap: Rules to govern a system can lead to rule-beating—perverse behav-
ior that gives the appearance of obeying the rules or achieving the goals,
but that actually distorts the system.
The Way Out: Design, or redesign, rules to release creativity not in the
direction of beating the rules, but in the direction of achieving the purpose
of the rules.

Seeking the Wrong Goal

Trap: System behavior is particularly sensitive to the goals of feedback
loops. If the goals—the indicators of satisfaction of the rules—are defined
inaccurately or incompletely, the system may obediently work to produce
a result that is not really intended or wanted.
The Way Out: Specify indicators and goals that reflect the real welfare of

23
 the system. Be especially careful not to confuse effort with result or you
will end up with a system that is producing effort, not result.

Places to Intervene in a System

(in increasing order of effectiveness)

12. N umbers: Constants and parameters such as subsidies, taxes, and

standards
11. B uffers: The sizes of stabilizing stocks relative to their flows
10. S tock-and-Flow Structures: Physical systems and their nodes of
intersection
9. Delays: The lengths of time relative to the rates of system changes
8. Balancing Feedback Loops: The strength of the feedbacks relative to
the impacts they are trying to correct
7. Reinforcing Feedback Loops: The strength of the gain of driving
loops
6. Information Flows: The structure of who does and does not have
access to information
5. Rules: Incentives, punishments, constraints
4. Self-Organization: The power to add, change, or evolve system
structure
3. Goals: The purpose of the system
2. Paradigms: The mind-set out of which the system—its goals, struc-
ture, rules, delays, parameters—arises
1. Transcending Paradigms

Guidelines for Living in a World of Systems

1. Get the beat of the system.

2. Expose your mental models to the light of day.
3. Honor, respect, and distribute information.
4. Use language with care and enrich it with systems concepts.
5. Pay attention to what is important, not just what is quantifiable.
6. Make feedback policies for feedback systems.
7. Go for the good of the whole.

24
 8. Listen to the wisdom of the system.
9. Locate responsibility within the system.
10. Stay humble—stay a learner.
11. Celebrate complexity.
12. Expand time horizons.
13. Defy the disciplines.
14. Expand the boundary of caring.
15. Don’t erode the goal of goodness.

25
 About the Author

Donella Meadows (1941–2001) was a scientist trained in chemis-

try and biophysics (Ph.D., Harvard University). In 1970, she joined
the Massachusetts Institute of Technology team lead by Dennis
Meadows that produced “World3,” a global computer model that explores
the dynamics of human population and economic growth on a finite
planet. In 1972, she was lead author of The Limits to Growth, the book
that described for the general public the insights from the World3 model-
ing project. Limits was translated into twenty-eight languages and sparked
debate around the world about the earth’s carrying capacity and human
choices. Meadows went on to write nine more books on global model-
ing and sustainable development and for fifteen years she wrote a weekly
column, “The Global Citizen,” reflecting on the state of our society and
the complex connections in the world.
In 1991, Meadows was recognized as a Pew Scholar in Conservation and
the Environment, and in 1994 she received a MacArthur Fellowship. She
founded the Sustainability Institute in 1996 to apply systems thinking and
organizational learning to economic, environmental, and social challenges.
From 1972 until her death in 2001, Meadows taught in the Environmental
Studies Program of Dartmouth College.

26
 Thank you for listening
to Thinking in Systems
by Donella H. Meadows.

To purchase the book in paperback,

please visit our website.

CHELSEA
GREEN PUBLISHING
the politics and practice of sustainable living