Stocks and Flows

Every system runs on stocks — what accumulates — and flows, the rates that fill or drain them. Water in a tub is the stock; the tap and drain are its flows.

A stock is anything that piles up: water in a tub, money in an account, trust in a relationship. A flow is a rate that changes it — deposits, withdrawals.

The rule: a stock changes only through its flows, and only as fast as they allow. You can't teleport the water level, only open the tap or narrow the drain.

Most arguments confuse the level with the rate — debt with deficit, weight with diet. Separate them and the system gains a diagram you can work with.

Find the stock, then the taps

#02

Separate levels from rates

For any system, list what accumulates (the stocks) and what changes them (the flows). Ask of every number: is this a level or a rate? The two behave completely differently.

Stock: what's piled up right now
Flow: how fast it's rising or falling

Draw the bathtub

Sketch the stock as a container with an inflow pipe and an outflow drain. This one diagram is enough to reason about savings, inventory, reputation, or a reservoir.

Remember stocks move only through flows

You can't change a stock directly — only its inflows and outflows. Any plan to raise or lower a level must name which tap it turns.

Master the bathtub and you have the grammar every dynamic system is written in.

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