Universal Enterprise Model (UEM) – content of the scheme

 

    Categories of transaction and essential functions in the UEM scheme

    During the investigation of the UEM we got acquainted with the scheme as such; now we want to check how we find in the scheme the different dimensions that have made the societal system transparent in the preceding analyses.

    Presence of the categories of transaction

    To start with, the scheme of the layered system learnt us that three categories of transaction can be distinguished: ecological transactions, exchange transactions, and mere financial transactions.

    Screening the UEM scheme from top to bottom we first meet the mere financial transactions in the financial layer. The flows mentioned there concern taking up or paying back capital and credits, financial investing, costs and yields involved with the two former types of flow, and transfers from and to other entities.

    In the infrastructure layer and the production layer we find the exchange transactions. Those are flows of physical products and services with a blue arrow on the left (input) and a red one on the right (payment).

    On the bottom of the production layer there are two kinds of flows where we do not find a red arrow on the right opposite the blue one on the left. As far as nature is concerned, this is quite evident. Nature has no bank account, and the flows of air, light, rain and snow can physically not be caught and controlled by an entity, which could ask a price for it. Of the other natural flows (stocks of water, minerals, combustibles, ‘wild’ plants and animals) control is indeed possible, and the governments must impose a ‘fair’ price for them in function of their sustainability; the flow of money for licences / concessions is part of the outgoing flow for taxes.

    Together with the flow of waste (on the bottom to the right), these flows from and to nature have to be dosed and managed in function of a durable ecological equilibrium, which in view of the ‘worldwide’ character requires a tackling on the world level. 

    The flow of public goods and services also misses a red arrow on the right hand side. We do not usually pay each time we use public goods or services except for tolls levied for using specific roads, bridges and tunnels. The use of all the rest is paid by the taxes.

     So taxes, mentioned  in the financial layer, do not have a mere financial character. It only seems so at first sight; taxes are a global payment for the total package of goods and services that are supplied for them; that is precisely the distinction between this ‘broad’ transaction and individual exchange transactions: no unit price of a product or a service, but a periodical payment for a total package. It is of course normal that the members of a society expect a diversified solidarity: assignable subgroups of the population who use specific parts of the public goods and services directly, have to pay that portion of the total burden (taxes).

     Presence of the essential functions

    The examination of the societal system also led to the conclusion that all economic entities fulfil three essential functions in the economic sphere: consuming, producing, and (productive) investing / financial investing. The three functions are very clear present in the UEM scheme.

    Consuming is found in all flows of the infrastructure and the production layers, which are preceded by a blue arrow on the left.  

    Producing specifically happens in the production layer with the internal flows that are coming from the infrastructure layer.

    The productive investments are found in the infrastructure layer. Not only pure purchases of physical equipment have to be considered as such, but also all efforts done in order to be able to dispose in the long run of an effective whole of equipment and people and to make the ‘mere’ physical production pass effectively and efficiently.

    Of course the financial investments are shown in the financial layer: they are a substitute for the use of available money that can no longer be invested physically and meaningfully in the own entity.

     The UEM scheme presents the three flow categories, which are connected with the layered structure of the system, as well as the three essential functions performed by any economic entity. The balls on the knots of the tight societal web prove not to be black boxes after our examination, but only the wrappings of a common structure with always the same functioning, that can however show many variations.

    Thanks to the ‘glasses’ of the UEM the complexity of the unfiltered image of the society gets largely solved.