Stories reflect the mind’s problem-solving process. The story of how a mind arrives at the point where it requires this process is known as backstory. More than a background history lesson, this pre-story story can also be understood as a process of justification.
A frequently used example to describe what it means when Dramatica refers to "an inequity between characters and their environment" is the example of the desire for a new car and a car. I use it during my Weekend Workshops and I used it when I used to teach story at CalArts.
In short—the desire for a new car is not a problem. A car is not a problem. The desire for a car is not a problem. What does create the potential for a problem is the space between the two: the human mind sees this space as an inequity. When faced with an inequity you have two choices: resolve the inequity or justify it away.
Resolving the Inequity
You can resolve the inequity in different ways. For one, you could lose your desire for the new car. Get rid of the desire, no more separateness between things, no more inequity. Everything returns to Zen. OR you can get the car. Get the car, you no longer have a desire for it, no more space in-between, no more inequity, everything returns to normal.
But what if you don't have the means for a car AND you can't get rid of the desire? That's when you start the justification process.
Justifying the Inequity
When deciding the alternate path of justification, your mind first looks to see where it is going to focus its attention. Let's say you focus on the car. If you do that, then you "lock" the desire for the car away—you're no longer going to consider losing that desire as an option. Your attention is focused on the car.
With the desire locked away the car itself now becomes a PROBLEM. You don't have a car and that frustrates the heck out of you. The car is now a problem only because your mind determined it wasn’t going to reconsider the desire. This is where the Justification process begins and where Dramatica fits in.
A Process for Solving Problems
The Dramatica model isn't showing you the inequity, the model is showing you the mind's problem-solving process. With the car as a problem, you automatically create a solution: more cash. Now you have a Problem (the car) and a Solution (more cash). But what if you don't have enough cash? Well then,you make not having cash a Problem by hiding that First Problem of not having a car. You've justified or hidden away that Problem and created a new Problem. Now you're looking for a Solution for a Solution.
This repeats until eventually you'll get to the 4th level of Justification (fully justified) where you are looking for a Solution for a Solution for a Solution; this is where most stories begin and where you can find yourself lost as to why you do the things you do. You’re lost because you have TOTALLY forgotten your original motivation for why you behave the way you do. Sounds like a justified Main Character, right?
This story process (or storyform) depicts the process of tearing those justifications down, at least in a story that features a Main Character with a Changed Resolve. The next step in the cycle is where you’ll find Steadfast Main Characters; their stories tell the process of building justifications up.
The storyform isn't about an inequity, but rather the mind's process of problem-solving or justifying a problem that came from an inequity between things.