The circular flow model of production and consumption lies at the heart of standard economics modeling. The economy is seen as a closed system of exchange between households (which supply factors of production and buy goods and services) and firms (which use factors of production to make goods and services for sale to households). “The flow of output is circular, self-renewing and self-feeding,” because “outputs of the system are returned as fresh inputs.” (Lester Thurow and Robert Heilbroner in “The Economic Problem”)

This is patent nonsense. Anything that can take as input what it excretes as output is a perpetual motion machine, a violation of the second law of thermodynamics. In reality, an economy—like any living thing or any machine—sucks low entropy from its environment and excretes a high-entropy wake of degraded matter and energy. Zencey (2014) Energy as Master resource