|Left: the seven essential mental feelings, thoughts, or states associated with flow, according to the 2008 views of Csíkszentmihályi. |
In the 1970s, the flow model was developed by Croatian-born American psychologist Mihály Csíkszentmihályi in his studies of the behaviors of exceptional people, particularly artists and scientists. The state of "flow", as the following digram shows, according to Csíkszentmihályi, arises when both the level of challenge is high and the level of a one's skill sets are high.
To give a prime example of the mental flow state, as Csíkszentmihályi has quantified it, American engineer Willard Gibbs commented about the writing of his famous 300-page Equilibrium paper, otherwise known as the principia of thermodynamics, written over a period of three years, 1875-78, that: 
“[I had no] sense of the value of time, of my own or others, when I wrote it.”
The theory or state of "flow", as it is now viewed in positive psychology, is a state of mind or life where there is no disorder to straighten out, or threat to the self to defend against, such that the release of liberated psychic energy is used or invested successfully in chosen goals. In short, flow is a state of concentration or consciousness so focused that it amounts to absolute absorption in an activity.
The energy-entropy modeling of the flow theory, loosely described as the psychodynamics of happiness, was developed beginning in the 1970s by Croatian-born American psychologist Mihály Csíkszentmihályi and popularized by his 1990 book Flow: the Psychology of Optimal Experience.
The term "flow" was named as such due to interviews of 173 subjects, in the 1970s, where people often described their 'flow' experiences using the metaphor of a current carrying them along.  States of flowing activity are described as a condition of "optimal experience", where a one is in top form, and a feeling of timelessness results. States of flow experience are considered as the opposite of psychic entropy or negentropy.
As Csíkszentmihályi notes in the following 2008 TED talks lecture “Creativity, Fulfillment and Flow”, he was pulled into the study of the psychology mental states, particularly those states in relation to the effect that the Second World War had on those who lost their jobs, security, and homes, etc., by accident during a weekend ski-trip in Zurich.
In particular, Csíkszentmihályi says that, by chance, the snow melted and that, being without spending money for other forms of entertainment, he was forced into the option of attending a free lecture on the mental projections of flying saucers, explained in the lecture as a residual effect of war traumatization, by Swiss psychologist Carl Jung. Jung, in turn, passed on his ideas on the energy and entropy of mental function to Csíkszentmihályi.
Csíkszentmihályi soon decided to devote his researches to the study of the aspects of activities that make people happy. In one of his early interviews of a famous music composer, Csíkszentmihályi made particular note of the following of the state of ecstasy described by the composer in his most productive state:
“You are in an ecstatic state to such a point that you feel as though you don’t exist … my hand seems devoid of myself, and I have nothing to do with what is happening. I just sit there watching it in a state of awe and wonderment. And [the music] just flows out of itself.”
In reference to flow in the workplace, Csíkszentmihályi cites the following quote by Sony founder electronics inventor Masaru Ibuka, in explaining the purpose of incorporation of Sony:
“To establish a place of work where engineers can feel the joy of technological innovation, be aware of their mission to society, and work to their heart’s content.”
The following are related quotes:
“The calm prosperity of your reign has given us the leisure to follow these studies of quiet and retirement.”— Robert Hooke (1665), “Epistle to the King” of Micrographia 
1. (a) Thims, Libb. (2007). Human Chemistry (Volume One), (pg. 173). (preview), (Google books). Morrisville, NC: LuLu.
(b) Thims, Libb. (2007). Human Chemistry (Volume Two), (pgs. 646-47, 665, 677). (preview), (Google books). Morrisville, NC: LuLu.
2. Cropper, William H. (2004). Great Physicists: the Life and Times of Leading Physicists from Galileo to Hawking, (section II: Thermodynamics, pgs. 41-134; ch. 9: “The Greatest Simplicity: Willard Gibbs”, pgs 106-23, esp. 110). Oxford University Press.
3. Csíkszentmihályi, Mihály. (2008). “Creativity, Fulfillment and Flow” (18:56 video), TED talks, October.
4. (a) Csíkszentmihályi, Mihály. (1990). Flow - the Psychology of Optimal Experience. Harper Perennial.
(b) Thims, Libb. (2007). Human Chemistry (Volume One), (preview). (pg. 173). Morrisville, NC: LuLu.
5. Hooke, Robert. (1665). Micrographia: Some Physiological Descriptions of Minute Bodies made by Magnifying Glasses, with Observations and Inquiries Thereupon. Science Heritage, 1667.
● Csíkszentmihályi, Mihály (1975). Beyond Boredom and Anxiety. San Francisco, CA: Jossey-Bass.
● Csíkszentmihályi, Mihály (1996). Creativity: Flow and the Psychology of Discovery and Invention. New York: Harper Perennial.
● Csíkszentmihályi, Mihaly (1997). Finding Flow: the Psychology of Engagement with Everyday Life. Basic Books.
● Jackson, Susan A. & Csíkszentmihályi, Mihály (1999). Flow in Sports: The Keys to Optimal Experiences and Performances. Champaign, Illinois: Human Kinetics Publishers.
● Csíkszentmihályi, Mihály (2003). Good Business: Leadership, Flow, and the Making of Meaning. New York: Penguin Books.
● Mental state called flow – c2.com
● FlowTheory.com – 2005 MSc dissertation by Kay McMahon.