Economic Model - 1

As I said in my earlier blog, I am going to try to develop a simple money flow model and use that to explain a lot of economic phenomena. I will refine the model as I develop it to correct errors that may prop up. My first take on the model would be to have an economy around satisfying basic needs of humans - food, shelter and clothing plus I will add entertainment to represent some generic services. Say I have got 20 farmers, 10 artisans, 10 manufacturing people, 10 entertainers and 50 other people who tend households. The 50 people who tend households are not directly involved in an economic exchange but manage a number of things and could represent wifes, children. There is a total of 100 people in this economy. There will also be a bank and a govt but they will just be entities making some decisions rather than have human resources working for them. Let's say the farmers grow wheat and cotton - one for food and the other for clothing. The manufacturers may manufacture both machines and cloth. The artisans could build a number of things like house, barns etc. Say the 20 farmers can currently grow 100 bushels of wheat per year and each person consumes 1 bushel of wheat per year for minimal survival. Every household has a shelter but would like to expand on it using the artisans. The manufacturers currently make 100 cloth per year and everybody's cloth only last one year. The manufacturers have capacity to make more cloth and some machinery for farming. In a bartering system, the 20 farmers would give 20 bushels of wheat to artisans in exchange for making upgrade to their 20 houses. The 20 farmers would give 20 bushels of wheat to manufacturing people to get 20 cloth from them. They would also give 20 bushels of wheat to entertainers to get entertained. The farmers themselves need 40 bushels of wheat tof feed themselves and their dependents. Same thing goes for the artisans who will upgrade or maintain houses for manufacturers in return for cloth. This is kind of perfect bartering system where everybody makes enough for everybody else. The real world doesn't happen like this. I am going to start using the concept of money to depict these exchanges. It becomes easier to track things but the money should always be linked to the exchanges happening to understand economic phenomena.