These questions aim at things I've been thinking about since writing Feedback Thought in Social Science and Systems Theory. While that book is a good reference to a lot of this, I finally put a lot of those thoughts about endogeneity together in a paper just published in the System Dynamics Review, called "Reflections on the Foundations of System Dynamics." Please pardon me for suggesting it's the most focused article I know of addressing Jaimie's questions.
You can find it and download it at .
I could try to summarize it all here, but it's really best to send you to the whole article. You will find Jay's short paragraph below considerably expanded, with a number of telling examples, including a lovely bit from three first grade boys in the Borton School in Tucson.