Circular and Cumulative Causation and the Social Fabric Matrix

By Hayden, F. Gregory | Journal of Economic Issues, June 2008 | Go to article overview
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Circular and Cumulative Causation and the Social Fabric Matrix

Hayden, F. Gregory, Journal of Economic Issues

Scientists from many different fields of study independently derived common principles about systems that are usually referred to as general systems analysis (GSA), which can be applied for analysis with the social fabric matrix (SFM) (see Hayden 2006, 51-60 and 94-106). The institutionalist Gunnar Myrdal used the term "circular and cumulative causation" (CCC) to describe principles he derived for the analysis of socioeconomic systems (1944, 1065-1070; 1974, 719-732; 1978, 774-775). His findings regarding systems were consistent with GSA discovered in other fields such as physics and biology. The purpose here is to present the SFM digraph in Figure 1 in order to use the empirical content of a real-world socioeconomic system to derive conceptual conclusions about CCC/GSA concerns, to include comments about current controversies. The SFM, digraph, and cellular description are completed for part of the Nebraska State system used to distribute state funds among local K-12 public schools. The Nebraska study combines the problem orientation of instrumentalism and the systems analysis of CCC/GSA. Figure 1 is a system taken from a larger whole consistent with the problem selected. The complete SFM study is available at the interactive SFM website (


The main system for state school aid in Nebraska is titled the Tax Equity and Educational Opportunities Support Act (TEEOSA). The emphasis of the SFM study was to express the rules of TEEOSA that determine how much money is distributed by the state to each of the 257 school districts. The SFM cell descriptions are algebraic articulations of TEEOSA rules. These rules result in a continuous algebraic formula for each district that is 600 pages long (abridged to 138 pages in the website). The rules were discovered and converted to algebra by reviewing the laws, regulations, and standard operating procedures for each term and by interviewing and observing personnel in the departments and divisions responsible for calculating and programming the numbers that represent the amount of money that a district is to gain or lose from each term in the TEEOSA process. Government departments are the producers of the numbers, which are the work product in this case. Formula terms require the institutional organizations to coordinate work and data from the local, state, and federal government. The numbers produced and the use of those numbers--that is, the integrated work completed by these organizations--are determined by rules from the Nebraska Senate (Unicameral) and Nebraska Courts, as indicated in Figure 1.

As depicted in Figure 1, legislative and court decisions are delivered to the Nebraska Department of Education (NDE), which directs its divisions to follow the rules and to coordinate with other divisions and other departments in order to fulfill the regulations and requirements of the rules. The directed edges from NDE to the other components represent rules delivered to those components on what and how to calculate particular aspects of the overall formula, what data to use, from where to acquire it, and to what groups the calculations should be reported. The number preceding each component in Figure 1 is its SFM row and column number. Institutional components 32 through 39 are given the name that corresponds to TEEOSA rules that designate the components' activities. They are:

   Net Option Students: Parents have the option of sending children to
   a school district in which they do not reside. Net option students
   for a district are the difference between the number of option
   students received from another district and the number of a
   district's option students going to another district. These
   students have already been counted once for the districts, but are
   counted again as net option students. According to the rules, the
   number of net option students compiled by the interaction of local
   districts and state personnel are directed to those who calculate
   net option funding (Neb. 

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