1.1 The Surface World and Deep Structure

Everyday economic discussion focuses on the surface world:

  • GDP, inflation, unemployment, interest rates, exchange rates, and house prices;
  • Corporate profits, valuations, market capitalization, and ROE;
  • Urban investment, infrastructure, and population inflows and outflows;
  • National growth, crisis, recession, and recovery.

These are all outcome indicators.

CBT is more concerned with the deep structure behind those outcomes:

  • How actors make choices within finite lifetimes;
  • How institutions define boundaries, rights, and obligations;
  • Who uses power, narratives, and rules to control Bus switches and alter other actors’ FCF and r;
  • How Negative Buses crowd out Positive Buses, and how the EPV of actors at the bottom is systematically compressed.

1.2 Four Core Objects of Analysis

CBT compresses the world into four core objects:

  • Actors: individuals, families, firms, governments, and organizations;
  • Free Cash Flow (FCF): cash remaining after basic survival and operating needs are met, whose use the actor can determine autonomously;
  • Discount-rate structure (r-structure): the way people and institutions discount the future;
  • Property Rights & Boundaries (Boundaries): the allocation of who holds which rights and obligations over what.

Any complex phenomenon can be translated through three questions:

  • Where does Free Cash Flow come from, and where does it go?
  • What does the discount-rate structure look like, and who is changing r?
  • How are Property Rights & Boundaries defined? Who occupies which Bus, and what position do they hold on it?

1.3 Scope and What CBT Does Not Do

CBT does not replace microeconomics, macroeconomics, corporate finance, or accounting;
nor does it promise short-term price forecasts.

It is closer to:

  • A “cross-context translator” that translates institutions, power, war, religion, and emotion into FCF, r, and Boundaries;
  • A “structural diagnostic tool” for long-horizon scenario analysis and crisis identification;
  • A coordinate system that allows discussions across different fields to be aligned in a common language.