Good teacher; michael leon

You can use the opportunities presented by a system’s momentum to guide

it toward a good outcome—much as a judo expert uses the momentum of
an opponent to achieve his or her own goals. There is one more important
principle about the role of stocks in systems, a principle that will lead us
directly to the concept of feedback. The presence of stocks allows infl ows
and outfl ows to be independent of each other and temporarily out of
balance with each other. It would be hard to run an oil company if gasoline
had to be produced at the refi nery at exactly the rate the cars were burning
it. It isn’t feasible to harvest a forest at the precise rate at which the trees
are growing. Gasoline in storage tanks and wood in the forest are both
stocks that permit life to proceed with some certainty, continuity, and
predictability, even though fl ows vary in the short term. Human beings have
invented hundreds of stock-maintaining mechanisms to make infl ows and
outfl ows independent and stable. Reservoirs enable residents and farmers
downriver to live without constantly adjusting their lives and work to a
river’s varying fl ow, especially its droughts and fl oods. Banks enable you
temporarily to earn money at a rate different from how you spend.
Inventories of products along a chain from distributors to wholesalers to
retailers allow production to proceed smoothly although customer demand
varies, and allow customer demand to be fi lled even though production
rates vary. Most individual and institutional decisions are designed to
regulate the levels in stocks. If inventories rise too high, then prices are cut
or advertising budgets are increased, so that sales will go up and inventories
will fall. If the stock of food in your kitchen gets low, you go to the store. As
the stock of growing grain rises or fails to rise in the fi elds, farmers decide
whether to apply water or pesticide, grain companies decide how many
barges to book for the harvest, speculators bid on future values of the
harvest, cattle growers build up or cut down their herds. Water levels in
reservoirs cause all sorts of corrective actions if they rise too high or fall too
low. The same can be said for the stock of money in your wallet, the oil
reserves owned by an oil company, the pile of woodchips feeding a paper
mill, and the concentration of pollutants in a lake. People monitor stocks
constantly and make decisions and take actions designed to raise or lower
stocks or to keep them within acceptable ranges. Those decisions add up to
the ebbs and fl ows, successes and problems, of all sorts of systems. Systems
thinkers see the world as a collection of stocks along with the mechanisms
for regulating the levels in the stocks by manipulating fl ows. That means
system thinkers see the world as a collection of “feedback processes.” How
the System Runs Itself—Feedback Systems of information-feedback control
are fundamental to all life and human endeavor, from the slow pace of
biological evolution to the launching of the latest space satellite. . . .
Everything we do as individuals, as an industry, or as a society is done in the
context of an information-feedback system. —Jay W. Forrester3
When a stock grows by leaps and bounds or declines swiftly or is held within
a certain range no matter what else is going on around it, it is likely that
there is a control mechanism at work. In other words, if you see a behavior
that persists over time, there is likely a mechanism creating that consistent
behavior. That mechanism operates through a feedback loop. It is the
consistent behavior pattern over a long period of time that is the fi rst hint
of the existence of a feedback loop. A feedback loop is formed when
changes in a stock affect the fl ows into or out of that same stock. A
feedback loop can be quite simple and direct. Think of an interest-bearing
savings account in a bank. The total amount of money in the account (the
stock) affects how much money comes into the account as interest. That is
because the bank has a rule that the account earns a certain percent
interest each year. The total dollars of interest paid into the account each
year (the fl ow in) is not a fi xed amount, but varies with the size of the total
in the account. You experience another fairly direct kind of feedback loop
when you get your bank statement for your checking account each month.
As your level of available cash in the checking account (a stock) goes down,
you may decide to work more hours and earn more money. The money
entering your bank account is a fl ow that you can adjust in order to increase
your stock of cash to a more desirable level. If your bank account then grows
very large, you may feel free to work less (decreasing the infl ow). This kind

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of feedback loop is keeping your level of cash available within a range that is
acceptable to you. You can see that adjusting your earnings is not the only
feedback loop that works on your stock of cash. You also may be able to
adjust the outfl ow of money from your account, for example. You can
imagine an outfl ow-adjusting feedback loop for spending. Feedback loops
can cause stocks to maintain their level within a range or grow or decline. In
any case, the fl ows into or out of the stock are adjusted because of changes
in the size of the stock itself. Whoever or whatever is monitoring the stock’s
level begins a corrective process, adjusting rates of infl ow or outfl ow (or
both) and so changing the stock’s level. The stock level feeds back through a
chain of signals and actions to control itself.
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 fl ow to
change the stock. Not all systems have feedback loops. Some systems are
relatively simple open-ended chains of stocks and fl ows. The chain may be
affected by outside factors, but the levels of the chain’s stocks don’t affect
its fl ows. However, those systems that contain feedback loops are common
and may be quite elegant or rather surprising, as we shall see. Stabilizing
Loops—Balancing Feedback One common kind of feedback loop stabilizes
the stock level, as in the checking-account example. The stock level may not
remain completely fi xed, but it does stay within an acceptable range. What
follows are some more stabilizing feedback loops that may be familiar to
you. These examples start to detail some of the steps within a feedback
loop. If you’re a coffee drinker, when you feel your energy level run low, you
may grab a cup of hot black stuff to perk you up again. You, as the coffee
drinker, hold in your mind a desired stock level (energy for work). The
purpose of this caffeine-delivery system is to keep your actual stock level
near or at your desired level. (You may have other purposes for drinking
coffee as well: enjoying the flavor or engaging in a social activity.) It is the
gap, the discrepancy, between your actual and desired levels of energy for
work that drives your decisions to adjust your daily caffeine intake. Notice
that the labels in Figure 9, like all the diagram labels in this book, are

3
direction-free. The label says “stored energy in body” not “low energy
level,” “coffee intake” not “more coffee.” That’s because feedback loops
often can operate in two directions. In this case, the feedback loop can
correct an oversupply as well as an undersupply. If you drink too much
coffee and fi nd yourself bouncing around with extra energy, you’ll lay off
the caffeine for a while. High energy creates a discrepancy that says “too
much,” which then causes you to reduce your coffee intake until your
energy level settles down. The diagram is intended to show that the loop
works to drive the stock of energy in either direction. I could have shown the
infl ow of energy coming from a cloud, but instead I made the system
diagram slightly more complicated. Remember—all system diagrams are
simplifi cations of the real world. We each choose how much complexity to
look at. In this example, I drew another stock—the stored energy in the
body that can be activated by the caffeine. I did that to indicate that there is
more to the system than one simple loop. As every coffee drinker knows,
caffeine is only a short-term stimulant. It lets you run your motor faster, but
it doesn’t refi ll your personal fuel tank. Eventually the caffeine high wears
off, leaving the body more energy-defi cient than it was before. That drop
could reactivate the feedback loop and generate another trip to the coffee
pot. (See the discussion of addiction later in this book.) Or it could activate
some longer-term and healthier feedback responses: Eat some food, take a
walk, get some sleep. This kind of stabilizing, goal-seeking, regulating loop is
called a balancing feedback loop, so I put a B inside the loop in the diagram.
Balancing feedback loops are goal-seeking or stability-seeking. Each tries to
keep a stock at a given value or within a range of values. A balancing
feedback loop opposes whatever direction of change is imposed on the
system. If you push a stock too far up, a balancing loop will try to pull it back
down. If you shove it too far down, a balancing loop will try to bring it back
up. Here’s another balancing feedback loop that involves coffee, but one
that works through physical law rather than human decision. A hot cup of
coffee will gradually cool down to room temperature. Its rate of cooling
depends on the difference between the temperature of the coffee and the
temperature of the room. The greater the difference, the faster the coffee

4
CHAPTER ONE: THE BASICS 29 will cool. The loop works the other way too—
if you make iced coffee on a hot day, it will warm up until it has the same
temperature as the room. The function of this system is to bring the
discrepancy between coffee’s temperature and room’s temperature to zero,
no matter what the direction of the discrepancy. Starting with coffee at
different temperatures, from just below boiling to just above freezing, the
graphs in Figure 11 show what will happen to the temperature over time (if
you don’t drink the coffee). You can see here the “homing” behavior of a
balancing feedback loop. Whatever the initial value of the system stock
(coffee temperature in this case), whether it is above or below the “goal”
(room temperature), the feedback loop brings it toward the goal. The
change is faster at fi rst, and then slower, as the discrepancy between the
stock and the goal decreases. This behavior pattern—gradual approach to a
system-defi ned goal— also can be seen when a radioactive element decays,
when a missile fi nds its target, when an asset depreciates, when a reservoir
is brought up or down to its desired level, when your body adjusts its blood-
sugar concentration, when you pull your car to a stop at a stoplight. You can
think of many more examples. The world is full of goal-seeking feedback
loops. The presence of a feedback mechanism doesn’t necessarily mean that
the mechanism works well. The feedback mechanism may not be strong
enough to bring the stock to the desired level. Feedbacks—the
interconnections, the information part of the system—can fail for many
reasons. Information can arrive too late or at the wrong place. It can be
unclear or incomplete or hard to interpret. The action it triggers may be too
weak or delayed or resourceconstrained or simply ineffective. The goal of
the feedback loop may never be reached by the actual stock. But in the
simple example of a cup of coffee, the drink eventually will reach room
temperature. Runaway Loops—Reinforcing Feedback I’d need rest to refresh
my brain, and to get rest it’s necessary to travel, and to travel one must
have money, and in order to get money you have to work. . . . I am in a
vicious circle . . . from which it is impossible to escape
The second kind of feedback loop is amplifying, reinforcing, self-multiplying,
snowballing—a vicious or virtuous circle that can cause healthy growth or

5
runaway destruction. It is called a reinforcing feedback loop, and will be
noted with an R in the diagrams. It generates more input to a stock the more
that is already there (and less input the less that is already there). A
reinforcing feedback loop enhances whatever direction of change is
imposed on it. For example: • When we were kids, the more my brother
pushed me, the more I pushed him back, so the more he pushed me back, so
the more I pushed him back. • The more prices go up, the more wages have
to go up if people are to maintain their standards of living. The more wages
go up, the more prices have to go up to maintain profi ts. This means that
wages have to go up again, so prices go up again. • The more rabbits there
are, the more rabbit parents there are to make baby rabbits. The more baby
rabbits there are, the more grow up to become rabbit parents, to have even
more baby rabbits. • The more soil is eroded from the land, the less plants
are able to grow, so the fewer roots there are to hold the soil, so the more
soil is eroded, so less plants can grow. • The more I practice piano, the more
pleasure I get from the sound, and so the more I play the piano, which gives
me more practice. Reinforcing loops are found wherever a system element
has the ability to reproduce itself or to grow as a constant fraction of itself.
Those elements include populations and economies. Remember the
example of the interest-bearing bank account? The more money you have in
the bank, the more interest you earn, which is added to the money already
in the bank, where it earns even more interest. Figure 13 shows how this
reinforcing loop multiplies money, starting with $100 in the bank, and
assuming no deposits and no withdrawals over a period of twelve years. The
fi ve lines show fi ve different interest rates, from 2 percent to 10 percent
per year. This is not simple linear growth. It is not constant over time. The
growth of the bank account at lower interest rates may look linear in the fi
rst few years. But, in fact, growth goes faster and faster. The more is there,
the more is added. This kind of growth is called “exponential.” It’s either
good news or bad news, depending on what is growing—money in the bank,
people with HIV/AIDS, pests in a cornfi eld, a national economy, or weapons
in an arms race. In Figure 14, the more machines and factories (collectively
called “capital”) you have, the more goods and services (“output”) you can

6
produce. The more output you can produce, the more you can invest in new
machines and factories. The more you make, the more capacity you have to
make even more. This reinforcing feedback loop is the central engine of
growth in an economy. Reinforcing feedback loops are self-enhancing,
leading to exponential growth or to runaway collapses over time. They are
found whenever a stock has the capacity to reinforce or reproduce itself. By
now you may be seeing how basic balancing and reinforcing feedback loops
are to systems. Sometimes I challenge my students to try to think of any
human decision that occurs without a feedback loop—that is, a decision that
is made without regard to any information about the level of the stock it infl
uences. Try thinking about that yourself. The more you do, the more you’ll
begin to see feedback loops everywhere. HINT ON REINFORCING LOOPS
AND DOUBLING TIME Because we bump into reinforcing loops so often, it is
handy to know this shortcut: The time it takes for an exponentially growing
stock to double in size, the “doubling time,” equals approximately 70 divided
by the growth rate (expressed as a percentage). Example: If you put $100 in
the bank at 7% interest per year, you will double your money in 10 years (70
÷ 7 = 10). If you get only 5% interest, your money will take 14 years to
double. The most common “non-feedback” decisions students suggest are
falling in love and committing suicide. I’ll leave it to you to decide whether
you think these are actually decisions made with no feedback involved.
Watch out! If you see feedback loops everywhere, you’re already in danger
of becoming a systems thinker! Instead of seeing only how A causes B, you’ll
begin to wonder how B may also infl uence A—and how A might reinforce or
reverse itself. When you hear in the nightly news that the Federal Reserve
Bank has done something to control the economy, you’ll also see that the
economy must have done something to affect the Federal Reserve Bank.
When someone tells you that population growth causes poverty, you’ll ask
yourself how poverty may cause population growth. You’ll be thinking not in
terms of a static world, but a dynamic one. You’ll stop looking for who’s to
blame; instead you’ll start asking, “What’s the system?” The concept of
feedback opens up the idea that a system can cause its own behavior. So far,
I have limited this discussion to one kind of feedback loop at a time. Of

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course, in real systems feedback loops rarely come singly. They are linked
together, often in fantastically complex patterns. A single stock is likely to
have several reinforcing and balancing loops of differing strengths pulling it
in several directions. A single fl ow may be adjusted by the contents of three
or fi ve or twenty stocks. It may fi ll one stock while it drains another and
feeds into decisions that alter yet another. The many feedback loops in a
system tug against each other, trying to make stocks grow, die off, or come
into balance with each other. As a result, complex systems do much more
than stay steady or explode exponentially or approach goals smoothly—as
we shall see.