Considering comments on the prior blog post…

I received some interesting comments on the prior blog post here, which is on the way we might manage our individually-owned forms of intangible assets in the future.

One comment that caught me off-guard had to do with what it would mean for a health capital account balance, for instance, to be overdrawn, as though the negative number would have profound existential effects! Of course, the introduction of negative numbers in the 19th century, and of zero before them, provoked similar kinds of fears and ridicule as to the complete meaninglessness of counting up increasing amounts less than nothing!

But any kind of bank account might be overdrawn, just as so many of our natural and social capital accounts are today, even though the entries in these accounts are not recorded in the same currencies, when they are in fact recorded at all.

The other comment that caught me unawares contended that the multiplication of all the different forms of capital requiring accounting was a pointless increase in paperwork. The commenter specifically likened it to an Orwellian doublespeak that claims a reduction in costs and increase in efficiency while in fact increasing costs and decreasing efficiency.

And so today’s existing systems for measuring and managing the inputs, outputs, and outcomes of education and health care, for instance, are somehow as good as it gets? Individual producers and consumers of the services provided in health care and education have all the information they need to make informed decisions about quality and value? Our diverse welters of uncontrolled and incommensurable metrics for measuring and managing literacy, numeracy, and health status are sufficient to the tasks of bringing the economics of education and health care under control? Nothing of substantial value could be obtained if all reading tests measured in a common, scientifically-established unit scaled from the earliest facility with reading to the most complex treatises of law, psychology, and philosophy? It would not behoove us to take explicit ownership of exactly how much human, social, and natural capital we as individuals possess as we try to exchange it and increase it on the market for monetary gain?

Maybe so, maybe so. Perhaps what we’ve got is as good as it gets. I don’t think so, though. It seems to me that two of the ultimate logical consequences of models facilitating the objective measurement of individual abilities, attitudes, and behaviors are metric systems for each of the various forms of intangible assets, and systems relating each individual’s measured values with monetary values in a comprehensive management, accounting and econometric framework.

It has long been held by economists that the model of land, labor, and manufactured capitals that are destroyed and transformed into profit and waste needs to be replaced. Fungible representations of natural, social, human, and manufactured capital fit the bill for comprehensive models that recycle all assets back into the system, and that redefine profit as the removal of waste. This is the role objective measurement is destined to fulfill, at every level from the individual to national accounts of well being.

For a description of how improved measurement fits into the context of the new four-capitals economic models, see https://livingcapitalmetrics.wordpress.com/2010/01/13/reinventing-capitalism/. These issues are also taken up in my 2008 Measurement article, and in a forthcoming Journal of Applied Measurement article.

Quite apart from any consideration of my living capital accounts report, I would love to hear where you think it all leads. I mean, what do you think will happen when everyone everywhere has immediate and universal access to a validated uniform measure of their literacy, numeracy, health status, etc.? When the patterns of income, expenditure, career growth, etc. associated with those metrics become available, entrepreneurs will be breaking down the doors to capitalize on them.

Yes, there are thousands of technical details to work out, and a host of moral implications. Yes, privacy and confidentiality will certainly be major issues. The issues will play out in ever new ways the old problems of forced socialization vs rampant alienating individualism, in the evolving context of ever more powerful technical means. How will the costs and benefits be balanced? How can we reap the benefits of feeling part of a larger whole in which we can see ourselves in everyone else without feeling smothered by a too-close conformity with an externally-imposed order?

My own opinion is that we use the balance scale as a symbol of justice for a reason. We define our moral status by our capacity for fair dealing. Measurement models that integrate individual patterns of variation with population-level structures are a medium for extending democratic principles to new levels of life, liberty, and the pursuit of happiness. For more on this theme, see my blog entry at https://livingcapitalmetrics.wordpress.com/2010/01/14/temple-pillars/.

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