Archive for the ‘capital’ Category

Cartesian problems cannot be solved by Cartesian solutions, no matter where those solutions originate

April 13, 2019

Trying to persuade or educate individuals to change the way they think and act, by pointing to the facts or by making emotional or moral appeals, seems always and everywhere to be the default go-to solution for those interested in addressing social and environmental problems. I suppose that approach works to varying degrees for different issues, but behavior change never occurs on as massive a scale as when it is mediated by a technology that enables people to do something they value.

The meaning of McLuhan’s expression, “the medium is the message,” and the long history of the many ways in which technologies transform cultures, for better and for worse, all seem utterly lost and forgotten when it comes to efforts aimed at provoking culture change. The ongoing discourses of environmental and social justice inevitably always seem to come back to targeting individual decisions and behaviors as the only recourse for effecting change.

But history teaches us that, if we want to change our values, we have to figure out how to embed the new terms in virally communicable metaphors that enthrall imaginations and captivate people’s attention and interest. Cultures turn on shared meanings that make some behaviors more likely than others. Good metaphors (“love is a rose;” “God is love”) organize experience in ways that allow infinite creative variations on the theme while also lending just a bit of structure and predictability to how things play out. We need to root new metaphors embodying shared human values in information infrastructures that operationalize consensus standards as the common currencies in which those values circulate.

Though the ongoing culture wars seem to suggest wildly divergent values in play across communities, research in developmental psychology strongly indicates that these differences are not what they seem. No matter what their politics, people need to feel valued, to have stable identities, to be recognized as someone of worth, to have a place of dignity in a community, to be trusted, and to see that others enjoy all of these qualities as well. Experience shows that these conditions cannot be implemented by a simple decree or force of will. Broad general conditions have to be cultivated in ways that make the emergence of abundant social capital resources more likely.

A point of entry into thinking about how those conditions might be created is provided by a 2010 quote in the Miami Herald from Gus Speth, former Dean of the Yale School of Forestry and Environmental Studies (http://tinyurl.com/y7mqtzzn). Speth recounts his sense that scientific solutions to ecosystem and climate problems are insufficient because the actual causes of the problems are greed, selfishness, and apathy. So he appeals to religious leaders for help.

But Speth’s moral diagnosis is as misconceived and uninformed as his original scientific one. As has been the topic of multiple posts in this blog, many of today’s problems cannot be solved using the same kind of Cartesian dualist thinking that was used in creating those problems. Voluminous citations in those earlier posts tap a large literature in the philosophy, history, and social studies of science describing a diverse array of examples of nondualist ecosystem thinking and acting (for instance, see references below). These works show how technological media fuse, embody, distribute, and enact social, moral, aesthetic, economic, and scientific values in complex multilevel metasystems (systems of systems). Moral values of fairness, for instance, are embedded in the quantitative values of measurement technologies exported from laboratories into markets where they inform economic values in trade.

Our task is to learn from these examples so that we can develop and deploy new languages that resonate with new values in analogous ways across similarly diverse cultural domains. Beauty, meaning, and poetry have to be as important as logic, mathematics, and science. Readily available theory and evidence already show how all of these are playing their roles in the evolving cultural transformation.

And, fortunately for humanity as well as for the earth, the new nondualist noncartesian solutions will not and cannot be primarily an outcome of deliberate intentions and conscious willpower. On the contrary, these integrated problem-solution monads are living, organic, self-organizing embodiments of ideas that captivate imaginations and draw creative, entrepreneurial energies in productive directions.

Of course, this kind of thing has happened many times in the past, though it has not previously emerged as a result of the kind of cultivated orchestration occurring today. Williamson, North, Ostrom, Coase, and others describe the roles institutions have played in setting up the rules, roles, and responsibilities of efficient markets. Today, new institutions are arising in a context of reproducible scientific results supporting ownership of, investments in, and profits harvested from sustainable impacts measured and managed via virally communicable media spreading social contagions of love and care. This is coming about because we all seek and value meaning and beauty right along with the capacity to enjoy life, liberty, and prosperity. However differently we each define and experience meaning and beauty, caring for the unity and sameness of the objects of the conversations that we are enables us to balance harmonies and dissonances in endless variations performed by every imaginable kind of rhythmic and melodic musical ensemble.

So instead of expecting different results from repeated applications of the same dualistic thinking that got us into today’s problems, we need to think and act nondualistically. Instead of assuming that solutions do not themselves already presuppose and embody problems of a certain type, we need to think in terms of integrated problem-solution monads deployed throughout ecosystems like species in symbiotic relationships. This is precisely what’s happened historically with the oil-automobile-highway-plastics-engineering ecosystem, and with the germ-disease-pharmaceutical-public health-medicine ecosystem. In each case, financial, market, accounting, regulatory, legal, educational, and other institutions evolved in tandem with the emerging sociotechnical ecology.

Now we face urgent needs to think and act on previously unheard of scales and levels of complexity. We have to work together and coordinate efforts in social and psychological domains with no previous history of communications capable of functioning at the needed efficiencies.

But merely urging people to live differently will never result in the changes that must be brought about. No matter how compelling the facts, no matter how persuasive the emotional power, and no matter how inspirational the moral argument, individual people and small groups simply cannot create new shared standards of behavior out of thin air. We are all products of our times and our sociocultural environments. People cannot be expected to simply wake up one day and spontaneously transform their habits by an effort of will. Instead, the values of fairness, equity, inclusion, and justice we say we live by must be embedded within the very fabric of everyday life, the way hours, meters, liters, degrees, grams, and volts are now.

That is, measurements read off instruments calibrated in fair units of comparison—measurements mathematically equivalent to those made with the scales of justice, measurements expressed in the common metrics of a new international system of units, and measurements as adaptable to local individual improvisations as they are generally comparable and navigable—have to be built into every institution in just the same way existing units of measurement are. Education, health care, social services, human resource management, environmental solutions—all of these and more need to attend closely to ways in which the objects of conversation can be more systematically expressed in meaningful words. Ecosystem thinking demands that everyone and everything in a system of relationships must be consistently kept in proportionate contact, within ranges of reported uncertainty, instead of being disconnected off into separate incommensurable universes of discourse, as occurs in today’s institutions.

These are all monumentally huge challenges. But much of the hardest work has been underway for decades, with important results and resources spreading into widely used applications often taken for granted in the background of largely unexamined assumptions. These results are now well enough established, and the associated social and environmental problems are so serious, that more can and should be done to put them to use.

The need for new values is indeed urgent, but empty talk and doing more of the same is getting us nowhere, at best, and more often is worsening conditions. Conceptual determinations of reproducible mathematical values embodying people’s lived social and moral values in fungible economic values are not just theoretical possibilities or provisional experimental results. They are longstanding, widely available, and practical, as well as beautiful and meaningful. With attentive cultivation and nurturing, there are abundant reasons for believing in a safe, healthy, happy, and prosperous future for humanity and life on earth.

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LivingCapitalMetrics Blog by William P. Fisher, Jr., Ph.D. is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
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Making sustainability impacts universally identifiable, individually owned, efficiently exchanged, and profitable

February 2, 2019

Sustainability impacts plainly and obviously lack common product definitions, objective measures, efficient markets, and associated capacities for competing on improved quality. The absence of these landmarks in the domain of sustainability interests is a result of inattention and cultural biases far more than it is a result of the inherent characteristics or nature of sustainability itself. Given the economic importance of these kinds of capacities and the urgent need for new innovations supporting sustainable development, it is curious how even those most stridently advocating new ways of thinking seem to systematically ignore well-established opportunities for advancing their cause. The wealth of historical examples of rapidly emerging, transformative, disruptive, and highly profitable innovations would seem to motivate massive interest in how extend those successes in new directions.

Economists have long noted how common currencies reduce transaction costs, support property rights, and promote market efficiencies (for references and more information, see previous entries in this blog over the last ten years and more). Language itself is well known for functioning as an economical labor-saving device in the way that useful concepts representing things in the world as words need not be re-invented by everyone for themselves, but can simply be copied. In the same ways that common languages ease communication, and common currencies facilitate trade, so, too, do standards for common product definitions contribute to the creation of markets.

Metrologically traceable measurements make it possible for everyone everywhere to know how much of something in particular there is. This is important, first of all, because things have to be identifiable in shared ways if we are to be able to include them in our lives, socially. Anyone interested in obtaining or producing that kind of thing has to be able to know it and share information about it as something in particular. Common languages capable of communicating specifically what a thing is, and how much of it there is, support claims to ownership and to the fruits of investments in entrepreneurial innovations.

Technologies for precision measurement key to these communications are one of the primary products of science. Instruments measuring in SI units embody common currencies for the exchange of scientific capital. The calibration and distribution of such instruments in the domain of sustainability impact investing and innovation ought to be a top-level priority. How else will sustainable impacts be made universally identifiable, individually owned, efficiently exchanged, and profitable?

The electronics, computer, and telecommunications industries provide ample evidence of precision measurement’s role in reducing transaction costs, establishing common product definitions, and reaping huge profits. The music industry’s use of these technologies combines the science and economics of precision measurement with the artistic creativity of intensive improvisations constructed from instruments tuned to standardized scales that achieve wholly unique levels of individual innovation.

Much stands to be learned, and even more to be gained, in focusing sustainability development on ways in which we can harness the economic power of the profit motive by combining collective efforts with individual imaginations in the domains of human, social, and natural capital. Aligning financial, monetary wealth with the authentic wealth and genuine productivity of gains in human, community, and environmental value ought to be the defining mission of this generation. The time to act is now.

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LivingCapitalMetrics Blog by William P. Fisher, Jr., Ph.D. is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
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So you say knowledge wants to be free?

January 26, 2019

If knowledge wants to be free, why do we work so hard keeping it trapped in scores and ratings whose meanings change depending on which questions were asked and who answered them?

Why don’t we liberate knowledge from its many prisons by embodying it in measurement systems that mean the same thing (within the range of uncertainty) no matter which questions on a topic are asked and no matter who answers them?

We routinely share knowledge quickly and easily when it’s about time, length, temperature, energy, mass, etc. Methods, theories, models, and tools developed over the last 90+ years show how we could be doing the same thing for literacy, health, functionality, environmental management, and every other major area of concern in the UN Sustainability Development Goals.

There’s a lot of talk among sustainability advocates about how urgent the need is for transformative efforts, investments, and technologies. It seems to me that sense of urgency will never be more than empty talk as long as we go on willfully ignoring the fact that we hold the keys to the chains that bind us.

 

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LivingCapitalMetrics Blog by William P. Fisher, Jr., Ph.D. is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
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On the recent Pew poll contrasting differences as to the “very big” problems we face today

October 20, 2018

An online news item appearing on 15 October 2018 proclaims that “Americans don’t just disagree on the issues. They disagree on what the issues are.” The article, by Dylan Scott on the Vox website, reports on a poll conducted by the Pew Research Center, involving registered voters in the U.S., between 24 September and 7 October. Polarizing disagreement is a recurring theme in the world, and keeping the tension up sells ads, so it is not surprising to see the emphasis in both the article and in the Pew report on major differences in people’s perceptions of what counts as a “very big” problem in the U.S. today. But a closer look at the data gives hope for finding ways to communicate across barriers that may look more significant than they actually are.

There’s no mention in the article of the sampling error, uncertainty, or confidence level, but the Pew site indicates that, overall, sampling error is 1.5%. But the Vox article mentions only the total sample size and fails to say that the registered voter portion of the respondents is smaller by a couple of thousand. Further, the sampling error jumps up to 2.6% for respondents indicating support for a Republican candidate, and to 2.3% for respondents supporting a Democrat. Again, the differences being played up are quite large, so there’s little risk of making too much out of a small difference. It’s good to know just how much of a difference makes a difference, though.

That said, neither Pew nor the Vox story mentions the very strong agreement between the different groups supporting opposing party candidates when the focus is on the relative magnitudes of agreement on aligned issues. Survey research typically focuses, of course, on percentages of responses to individual questions. Only measurement geeks like me wonder whether questions addressing a common theme could be related in a way that might convey more information. My curiosity was piqued, even though it is impossible to properly evaluate a model of this kind from the mere summary percentages. I knew if I found any correspondences they might just be accidents or coincidences, but I wanted to see what would happen.

So I typed up the text of the 18 issues concerning the seriousness of the problems being confronted in the US today, along with the percentages of registered voters saying each is a “very big” problem today. I put it all into SPSS and made a few technical checks to see if any major problems of interpretation would emerge from the nonlinear and ordinal percentages. The plots and correlations I did indicated that the same general results could be inferred from both the Pew percentages and their logit transformations.

While I was looking at a scatter plot of the Republican vs Democrat agreement percentages I noticed something interesting. I had been wondering if perhaps the striking differences in the groups’ willingness to say problems were serious might be a matter of relative emphases. Might the Republican supporters be less willing to find anything a big problem, but to nonetheless rank the issues in the same order as the Democrat supporters? This is, after all, exactly the kind of pattern commonly found in data from various surveys, assessments, and tests. No matter whether a respondent scores low overall, or scores high, the relative order of things stays the same.

Now, this is true in the kind of data I work with because considerable care is invested in composing questions that are intended to hang together like that. The idea is to deliberately vary the agreeability or difficulty of the questions so they all tap the same basic construct and demonstrably measure the same thing. When these kind of data are obtained, different questions measuring the same thing can be asked of different people without compromising the unit of measurement. That is, each different examinee or respondent can answer a unique set of questions and still have a measure comparable with anyone else’s. Like I said, this does not just happen by itself, but has to come about through a careful process of design and calibration. But the basic principles are well-established as being of longstanding and proven value across wide areas of research and practice.

So I was wondering if there might be one or more subsets of questions in the Pew data that would define the same problem magnitude dimension for supporters of both Republican and Democratic candidates. And as soon as I looked at the scatterplot of the percentages from the two groups, I saw that yes, indeed, there appeared to be four groups of issues that lined up along shared slopes. A color-coded version of that plot is in Figure 1.

The one statistical inference problem that emerged in examining these ordinal data concerns the yellow dot that is lowest and furthest to the left. At 8% agreement from the Republican supporters it was pulled away from the linear relation further than the other correspondences. When transformed into a log-odds unit, that single problematic difference lines up well with the other yellow dots further to the right.

The identity line in the figure shows where exact agreement between the two groups would be. That line marks out the connection between the same percentages of respondents agreeing an issue is a “very big” problem. We can see that the three green dots very nearly fall on that identity line. Just below them is a row of blue dots almost parallel with the identity line. Then there’s a third row of yellow dots further down, indicating more absolute disagreement between the two groups on these issues, but also showing a quite strong agreement as to their relative magnitudes within that group. Finally, there is another, red, line of dots in the lower right corner of the figure that marks out a more extreme range of absolute disagreement, but is also quite parallel to the identity line.

Fisher2018PewFig1

Figure 1 Initial plot of Republican vs Democrat Percentages agreement as to “Very Big” problems

Figures 2-5 below illustrate each of these groups of issues separately, giving further information on the problems and showing the regression lines and correlations for each contrast. The same colors have been retained to aid in seeing which groups of issues in Figure 1 are being shown.

The four areas of problems seem to me to correspond to issues of perceived major threats (Figure 2), accountability and access issues (Figure 3), equal opportunity issues (Figure 4), and systemic problems (Figure 5). Each of these content areas could be explored conceptually and qualitatively to assess whether some initial sense of a measured construct can be formed. If the by-person individual response data could be analyzed for fit to a proper measurement model, a much better job of determining the presence of invariant structure could be done.

But even without undertaking that work, these results already suggest a basis for productive conversations between the supposedly polarized groups. To start from the low-hanging fruit, the three problems the two groups agree on to within a couple of sampling errors (Figure 2) present topics of common agreement. Both Democrats and Republicans identify violent crime, the federal budget deficit, and drug addiction as matters of equally shared concern. The point is not that these are the highest rated problems for either group, but, rather, that they agree within the limits of statistical precision as to the extent that these are “very big” problems. It may be that setting shared priorities for addressing these problems could ground new relationships in that experience of having accomplished something productive together.

This new approach to building social capital might then proceed by taking up progressively more difficult areas of disagreement as to what “very big” problems are. Even though Republicans rate each area as less likely to be a “very big” problem, within each of the four groups of issues, they agree with Democrats as to their relative magnitudes. News like this might not sell a lot of ads, but it does offer hope for finding new ways of approaching relationships and crossing divides.

Fisher2018PewFig2

Figure 2.Republican vs Democrat areas of agreement as to “Very Big” problems

Fisher2018PewFig3

Figure 3 Republican vs Democrat areas of some disagreement as to “Very Big” problems

Fisher2018PewFig4

Figure 4 Republican vs Democrat areas of marked disagreement as to “Very Big” problems

Fisher2018PewFig5

Figure 5 Republican vs Democrat areas of fundamental disagreement as to “Very Big” problems

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Why economic growth can and inevitably will be green

October 1, 2018

So, approaching matters once again from yet another point of view, we have Jason Hickel explaining a couple of weeks ago “Why Growth Can’t Be Green.” This article provides yet another example of how the problem is the problem. That is, the way we define problems sets up particular kinds of solutions in advance, and sometimes, as Einstein famously pointed out, problems cannot be solved from within the same conceptual framework that gave rise to them. I’ve expanded on this theme in a number of previous posts, for instance, here.

Hickel takes up the apparent impossibility of aligning economic growth with environmental values. He speaks directly to what he calls the rebound effect, the way that “improvements in resource efficiency drive down prices and cause demand to rise—thus canceling out some of the gains.” But that rebound can happen only as long as the economy remains defined and limited by the alignment of manufactured capital and finance, ignoring the largely unexamined and unconsidered possibility that human, social, and natural capital could be measured well enough to be also aligned with finance.

Hence, as I say, the problem is the problem. Broadening one’s conceptualization of the problem opens up new opportunities that otherwise never come into view.

The Hickel article’s entire focus is then on top-down policy impositions like taxes or a Genuine Progress Index. These presume human, social, and natural capital can only ever exist in dead formations that have to be micromanaged and concretely manipulated, and that efficient markets bringing them to life are inherently and literally unthinkable. (See a short article here for an explanation of the difference between dead and living capital. There’s a lot more where that came from, as is apparent in the previous posts here in this blog.)

The situation could be vastly different than what Hickel imagines. If we could own, buy, and sell products in efficient markets we could reward the production of human, social, and environmental value. In that scenario, when improvements in environmental resource efficiency are obtained, demand for that new environmental value will rise and its price will go down, not the resource’s price.

We ought to be creative enough to figure out how to configure markets so that prices for environmental resources (oil, farmland, metals, etc.) can stay constant or fall without increasing demand for them, as could happen if that demand is counterbalanced and absorbed by rising human, social, and environmental quality capital values.

The question is how to absorb the rebound effect in other forms of capital that grow in demand while holding demand for the natural resource base in check. The vital conceptual distinction is between socialistic centralized planning and control of actual physical entities (people, communities, the environment, and manufactured items), on the one hand, and capitalistic decentralized distributed network effects on abstract transferable representations, on the other. Everyone defaults to the socialist scenario without ever considering there might be a whole other arena in which fruitful possibilities might be imagined.

What if, for instance, we could harness the profit motive to promote growth in genuine human, social, and environmental value? What if we were able to achieve qualitatively meaningful increases in authentic wealth that were economically contingent on reduced natural resource consumption? What if the financial and substantive value profits that could be had meant that resource consumption could be reduced by the same kinds of factors as have been realized in the context of Moore’s Law? What if a human economics of genuine value could actually result in humanity being able to adjust the global thermostat up or down in small increments by efficiently rewarding just the right combinations of policies and practices at the right times and places in the right volumes?

The only way that could ever happen is if people are motivated to do the right thing for the earth and for humanity because it is the right thing for them and their families. They have to be able to own their personal shares of their personal stocks of human, social, and natural capital. They have to be able to profit from investments in their own and others’ shares. They will not act on behalf of the earth and humanity only because it is the right thing to do. There has to be evidence and explanations of how everyone is fairly held accountable to the same standards, and has the same opportunities for profit and loss as anyone else. Then, and only then, it seems, will human, social, and environmental value become communicable in a viral contagion of good will.

Socialism has been conclusively proven unworkable, for people, communities, and the environment, as well as financially. But a human, social, and natural capitalism has hardly even been articulated, much less tried out. How do we make human, social, and natural capital fungible? How might the economy transcend its traditional boundaries and expand itself beyond the existing alignment of manufactured capital and finance?

It’s an incredibly complex proposal, but also seems like such a simple thing. The manufactured capital economy uses the common language of good measurement to improve quality, to simplify management communications, and to lower transaction costs in efficient markets. So what should we do if we want to correct the imbalanced negative impacts on people, communities, and the environment created by the misplaced emphasis on aligning only manufactured capital and financial capital?

As has been repeatedly proposed for years in this blog, maybe we should use the manufactured capital markets as a model and use good measurement to improve the quality of human, social, and environmental capital, to simplify communications and management, to lower transaction costs, and to align the genuine human, social, and environmental value created with financial value in efficient markets.

Of course, grasping that as viable, feasible, and desirable requires understanding that substantively meaningful precision measurement is something quite different from what usually passes for quantification. And that is an entirely different story, though one taken up repeatedly in previous entries in this blog, of course….

 

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New Ideas on How to Realize the Purpose of Capital

September 20, 2018

I’d like to offer the following in reply to James Militzer, at https://nextbillion.net/deciphering-emersons-tears-time-impact-investing-lower-expectations/.

Rapid advances toward impact investing’s highest goals of social transformation are underway in quiet technical work being done in places no one is looking. That work shares Jed Emerson’s sentiments expressed at the 2017 Social Capital Markets conference, as he is quoted in Militzer’s NextBillion.net posting, that “The purpose of capital is to advance a more progressively free and just experience of life for all.” And he is correct in what Militzer reported he said the year before, that we need a “real, profound critique of current practices within financial capitalism,” one that would “require real change in our own behavior aside from adding a few funds to our portfolios here or augmenting a reporting process there.”

But the efforts he and others are making toward fulfilling that purpose and articulating that critique are incomplete, insufficient, and inadequate. Why? How? Language is the crux of the matter, and the issues involved are complex and technical. The challenge, which may initially seem simplistic or naive, is how to bring human, social, and environmental values into words. Not just any words, but meaningful words in a common language. What is most challenging is that this language, like any everyday language, has to span the range from abstract theoretical ideals to concrete local improvisations.

That means it cannot be like our current languages for expressing human, social, and environmental value. If we are going to succeed in aligning those forms of value with financial value, we have a lot of work to do.

Though there is endless talk of metrics for managing sustainable impacts, and though the importance of these metrics for making sustainability manageable is also a topic of infinite discussion, almost no one takes the trouble to seek out and implement the state of the art in measurement science. This is a crucial way, perhaps the most essential way, in which we need to criticize current practices within financial capitalism and change our behaviors. Oddly, almost no one seems to have thought of that.

That is, one of the most universally unexamined assumptions of our culture is that numbers automatically stand for quantities. People who analyze numeric data are called quants, and all numeric data analysis is referred to as quantitative. That is the case, but almost none of these quants and quantitative methods involve actually defining, modeling, identifying, evaluating, or applying an substantive unit of something real in the world that can be meaningfully represented by numbers.

There is, of course, an extensive and longstanding literature on exactly this science of measurement. It has been a topic of research, philosophy, and practical applications for at least 90 years, going back to the work of Thurstone at the University of Chicago in the 1920s. That work continued at the University of Chicago with Rasch’s visit there in 1960, with Wright’s adoption and expansion of Rasch’s theory and methods, and with the further work done by Wright’s students and colleagues in the years since.

Most importantly, over the last ten years, metrologists, the physicists and engineers who maintain and improve the SI units, the metric system, have taken note of what’s been going on in research and practice involving the approaches to measurement developed by Rasch, Wright, and their students and colleagues (for just two of many articles in this area, see here and here). The most recent developments in this new metrology include

(a) initiatives at national metrology institutes globally (Sweden and the UK, Portugal, Ukraine, among others) to investigate potentials for a new class of unit standards;

(b) a special session on this topic at the International Measurement Confederation (IMEKO) World Congress in Belfast on 5 September 2018;

(c) the Journal of Physics Conference Series proceedings of the 2016 IMEKO Joint Symposium hosted by Mark Wilson and myself at UC Berkeley;

(d) the publication of a 2017 book on Ben Wright edited by Mark Wilson and myself in Springer’s Series on Measurement Science and Technology; and

(e) the forthcoming October 2018 special issue of Elsevier’s Measurement journal edited by Wilson and myself, and a second one currently in development.

There are profound differences between today’s assumptions about measurement and how a meaningful art and science of precision measurement proceeds. What passes for measurement in today’s sustainability economics and accounting are counts, percentages, and ratings. These merely numeric metrics do not stand for anything that adds up the way they do. In fact, it’s been repeatedly demonstrated over many years that these kinds of metrics measure in a unit that changes size depending on who or what is measured, who is measuring, and what tool is used to measure. What makes matters even worse is that the numbers are usually taken to be perfectly precise, as uncertainty ranges, error terms, and confidence intervals are only sporadically provided and are usually omitted.

Measurement is not primarily a matter of data analysis. Measurement requires calibrated instruments that can be read as standing for a given amount of something that stays the same, within the uncertainty range, no matter who is measuring, no matter what or who is measured, and no matter what tool is used. This is, of course, quite an accomplishment when it can be achieved, but it is not impossible and has been put to use in large scale practical ways for several decades (for instance, see here, here, and here). Universally accessible instruments calibrated to common unit standards are what make society in general, and markets in particular, efficient in the way of projecting distributed network effects, turning communities into massively parallel stochastic computers (as W. Brian Arthur put it on p. 6 of his 2014 book, Complexity Economics).

These are not unexamined assumptions or overly ideal theoretical demands. They are pragmatic ways of adapting to emergent patterns in various kinds of data that have repeatedly been showing themselves around the world for decades. Our task is to literally capitalize on these nonhuman forms of life by creating multilevel, complex ecosystems of relationships with them, letting them be what they are in ways that also let us represent ourselves to each other. (Emerson quotes Bruno Latour to this effect on page 136 in his new book, The Purpose of Capital; those familiar with my work will know I’ve been reading and citing Latour since the early 1980s).

So it seems to me that, however well-intentioned those promoting impact investing may be, there is little awareness of just how profound and sweeping the critique of current practices needs to be, or of just how much our own behaviors are going to have to change. There are, however, truly significant reasons to be optimistic and hopeful. The technical work being done in measurement and metrology points toward possibilities for extending everyday language into a pragmatic idealism that does not require caving in to either varying local circumstances or to authoritarian dictates.

The upside of the situation is that, as so often happens in the course of human history, this critique and the associated changes are likely to have that peculiar quality captured in the French expression, “plus ça change, plus c’est la même chose” (the more things change, the more they stay the same). The changes in process are transformative, but will also be recognizable repetitions of human scale patterns.

In sum, what we are doing is tuning the instruments of the human, social, and environmental sciences to better harmonize relationships. Just as jazz, folk, and world music show that creative improvisation is not constrained by–but is facilitated by–tuning standards and high tech solutions, so, too, can we make that the case in other areas.

For instance, in my presentation at the IMEKO World Congress in Belfast on 5 September, I showed that the integration of beauty and meaning we have within our grasp reiterates principles that date back to Plato. The aesthetics complement the mathematics, with variations on the same equations being traceable from the Pythagorean theorem to Newton’s laws to Rasch’s models for measurement (see, for instance, Fisher & Stenner, 2013). In many ways, the history of science and philosophy continues to be a footnote to Plato.

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Current events in metrology for fun, profitable, and self-sustaining sustainability impacts

September 18, 2018

At the main event I attended last week at the Global Climate Action Summit in San Francisco, the #giveyouthachance philanthropic gathering at the Aquarium of the Bay, multiple people independently spoke to aligning social and environmental values with financial values, and explicitly stated that economic growth does not automatically entail environmental degradation.

As my new buddy David Traub (introduced as a consequence of the New Algorithm event in Stockholm in June with Angelica Lips da Cruz) was the MC, he put me on the program at the last minute, and gave me five minutes to speak my piece in a room of 30 people or so. A great point of departure was opened up when Carin Winter of MissionBe.org spoke to her work in mindfulness education and led a guided meditation. So I conveyed the fact that the effects of mindfulness practice are rigorously measurable, and followed that up with the analogy from music (tuning instruments to harmonize relationships),  with the argument against merely shouldering the burden of costs because it is the right thing to do, with the counter-argument for creating efficient competitive markets for sustainable impacts, and with info on the previous week’s special session on social and psychological metrology at IMEKO in Belfast. It appeared that the message of metrology as a means for making sustainability self-sustaining, fun, and profitable got through!

Next up: Unify.Earth has developed their own new iteration on blockchain, which will be announced Monday, 24 September, at the UN SDG Media Center (also see here) during the World Economic Forum’s Sustainable Development Impact Summit. The UEX (Unify Earth Exchange) fills the gap for human capital stocks left by the Universal Commons‘ exclusive focus on social and natural capital.

So I’ve decided to go to NY and have booked my travel.

Back in February, Angelica Lips da Cruz recounted saying six months before that it would take two years to get to where we were at that time. Now another seven months have passed and I am starting to feel that the acceleration is approaching Mach 1! At this rate, it’ll be the speed of light in the next six months….

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Metrics, Stocks, Shares, and Secure Ledger Accounts for Living Capital: Getting the Information into the Hands of Individual Decision Makers

August 30, 2018

Individual investments in, and returns from, shares of various kinds of human, social, and natural capital stocks will be tracked in secure online accounting ledgers, often referred to generically using the Blockchain brand name. A largely unasked and unanswered question is just what kind of data would best be tracked in secure ledgers. To be meaningful, entries in such accounts will have to stand for something real in the world that is represented in a common language interpretable to anyone capable of reading the relevant signs and symbols. Since we are talking about amounts of things that vary, measurement will unavoidably be a factor.

High quality measurement is essential to the manageability and profitability of investments of all kinds, whether in manufactured capital and property, or in literacy, numeracy, mental and physical health, sociability, and environmental quality (human, social, and natural capital). The measurability and manageability of these intangible factors has achieved significant levels of scientific precision and rigor over the last 90 and more years.

This development is of increasing interest to economists and accountants who have long envisioned ways of reinventing capitalism that do not assume the only alternative is some form of socialism or communism (see references listed below). Many of today’s economic problems may follow from capitalism’s incompleteness. More specifically, we may be suffering from the way in which manufactured capital alone has been been brought to life, economically speaking, while human, social, and natural capital have not (Fisher, 2002, 2007, 2009a/b, 2010a/b, 2011a/b, 2012ab, 2014, etc.).

One in particular who speaks directly to an essential issue that must be addressed in creating an economy of authentic wealth and genuine productivity is Paul Hawken (2007, pp. 21-22), who says that Friedrich Hayek foresaw

“a remedy for the basic expression of the totalitarian impulse: ensuring that information and the right to make decisions are co-located. To achieve this, one can either move the information to the decision makers, or move decision making rights to the information. The movement strives to do both. The earth’s problems are everyone’s problems, and what modern technology and the movement can achieve together is to distribute problem solving tools.”

Hayek (1945, 1948, 1988; Frantz & Leeson, 2013) is well known for his focus on a distinction between a mechanical definition of individuals as uniform and homogenous, and a more vital sense of economic “true individuals” as complex and interdependent. To create efficient markets for the production of authentic wealth, we need to figure out how to extend the “true individuals” of manufactured capital markets into new markets for human, social, and natural capital (Fisher, 2014).

The distributed problem solving tools we need to support the decision making of “true” individuals are secure online ledgers accounting for investments in measured amounts of authentic wealth. Efficient markets are functions of individual processes that create wholes greater than their sums. The multiplier effect that makes this possible depends on transparent communication. Words, including number words, have to mean something specific and distinct. This is where the value of systematic measurement and metrology comes to bear. This is why we need an Intangible Assets Metric System.

For as long as economists have been concerned with markets, philosophers have been pointing out that society is an effect of shared symbol systems. In both cases, economists and philosophers are focused on the fact that it is only when people have a common language that an idea, a meme, can go viral, that a market can seem to have a mind of its own, and science can maintain an ever-increasing pace of technical innovation.

Our aim is to create the information that will populate the entries in the secure ledger accounts people use to track and manage their investments in literacy, numeracy, health, social, and natural capital. These entries will be posted right alongside their existing entries for investments in manufactured capital and property, which includes everything from groceries to autos to electronics to homes.

But the new ledger accounts will be different from today’s in important ways. Many current accounting entries are ultimately written off as costs producing untracked and unaccountable returns. We simply spend the money on groceries or school tuition or a doctor visit. The income is logged, and so are the expenses. We can see that, yes, buying groceries is an investment of a kind, since we profit from it by enjoying the processes of cooking, sharing, and eating tasty food, by avoiding hunger, and by sustaining good health.

Investments are tracked in a different way, though. Money is not just spent and kissed goodbye. Instead, investment funds are loaned to or leased by someone else who is expected to be able to increase the value of those funds. There are often no guarantees of an increase, but the invested value is associated with a proportionate share in the total value of the business. As the business grows or fails, so does the investment.

In much the same way, if we had the information available to us, we could track the returns on the investments we make in food, education, or health care. If we track the impacts of our dietary choices, we would be able to see if and when the investments we make result in healthy outcomes. The information brought to bear will have to include systematic advice relevant to one’s age, sex, pre-existing conditions, genetic propensities, etc. Additional information on the returns on one’s investments in a healthy diet should also be made available, as might be found in the expected income or expenses associated with the consequences of what is eaten, and how much of it. Sometimes there will be room for improvement, for example, if the foods we eat are too sugary or fatty, or if we eat too much. Other times, maintaining a healthy, varied diet may be all that is needed to see a consistent positive return on investment.

Public reports will allow us all to learn from one another. The ability to communicate in a common language and to see what has worked for others will enable everyone to experiment with new ways of doing things. People with common food interests or problems, for instance, will be able quickly evaluate the relevance and benefits of other people’s approaches or solutions. Because of the ways in which communication and community go together, it may be reasonable to hope that new levels of innovation, diversity, tolerance, and respect will follow.

Many aspects of work, education and health care are already undergoing transformations that move their processes out of the usual office, school and hospital environments. These changes will be accelerated as distributed network effects take hold in each of these various markets.

It is easy to see how the Internet of things may evolve to be the medium in which we manage relationships of all kinds, from education and school to health and safety to work and career. Secure ledgers immune from hacking will be essential. And an important health factor will be to know how much relationship management is enough, and when it’s time to get out into the world. That balancing factor will be a key aspect of a successful approach to connecting information on authentic wealth with the individual decision makers growing it and living it.

References

Andriessen, D. (2003). Making sense of intellectual capital: Designing a method for the valuation of intangibles. Oxford, England: Butterworth-Heinemann.

Anielski, M. (2007). The economics of happiness: Building genuine wealth. Gabriola, British Columbia: New Society Publishers.

Cadman, D. (1986). Money as if people mattered. In P. Ekins &  Staff of The Other Economic Summit (Eds.), The living economy: A new economics in the making (pp. 204-210). London: Routledge & Kegan Paul.

Eisler, R. (2007). The real wealth of nations: Creating a caring economics. San Francisco, California: Berrett-Koehler Publishers, Inc.

Ekins, P. (1992). A four-capital model of wealth creation. In P. Ekins & M. Max-Neef (Eds.), Real-life economics: Understanding wealth creation (pp. 147-155). London: Routledge.

Ekins, P. (1999). Economic growth and environmental sustainability: The prospects for green growth. New York: Routledge.

Ekins, P., Dresner, S., & Dahlstrom, K. (2008, March/April). The four-capital method of sustainable development evaluation. European Environment, 18(2), 63-80.

Ekins, P., Hillman, M., & Hutchison, R. (1992). The Gaia atlas of green economics (Foreword by Robert Heilbroner). New York: Anchor Books.

Ekins, P., & Max-Neef, M. A. (Eds.). (1992). Real-life economics: Understanding wealth creation. London: Routledge.

Ekins, P., & Voituriez, T. (2009). Trade, globalization and sustainability impact assessment: A critical look at methods and outcomes. London, England: Earthscan Publications Ltd.

Fisher, W. P., Jr. (2002, Spring). “The Mystery of Capital” and the human sciences. Rasch Measurement Transactions, 15(4), 854 [http://www.rasch.org/rmt/rmt154j.htm].

Fisher, W. P., Jr. (2007, Summer). Living capital metrics. Rasch Measurement Transactions, 21(1), 1092-1093 [http://www.rasch.org/rmt/rmt211.pdf].

Fisher, W. P., Jr. (2009a, November). Invariance and traceability for measures of human, social, and natural capital: Theory and application. Measurement, 42(9), 1278-1287.

Fisher, W. P., Jr. (2009b). NIST Critical national need idea White Paper: metrological infrastructure for human, social, and natural capital (Tech. Rep., http://www.nist.gov/tip/wp/pswp/upload/202_metrological_infrastructure_for_human_social_natural.pdf). Washington, DC: National Institute for Standards and Technology.

Fisher, W. P., Jr. (2010a). Measurement, reduced transaction costs, and the ethics of efficient markets for human, social, and natural capital., Bridge to Business Postdoctoral Certification, Freeman School of Business, Tulane University (p. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2340674).

Fisher, W. P., Jr. (2010b, 13 January). Reinventing capitalism: Diagramming living capital flows in a green, sustainable, and responsible economy. Retrieved from LivingCapitalMetrics.com: https://livingcapitalmetrics.wordpress.com/2010/01/13/reinventing-capitalism/.

Fisher, W. P., Jr. (2011a). Bringing human, social, and natural capital to life: Practical consequences and opportunities. Journal of Applied Measurement, 12(1), 49-66.

Fisher, W. P., Jr. (2011b). Measuring genuine progress by scaling economic indicators to think global & act local: An example from the UN Millennium Development Goals project. LivingCapitalMetrics.com. Retrieved 18 January 2011, from Social Science Research Network: http://ssrn.com/abstract=1739386.

Fisher, W. P., Jr. (2012a). Measure and manage: Intangible assets metric standards for sustainability. In J. Marques, S. Dhiman & S. Holt (Eds.), Business administration education: Changes in management and leadership strategies (pp. 43-63). New York: Palgrave Macmillan.

Fisher, W. P., Jr. (2012b, May/June). What the world needs now: A bold plan for new standards [Third place, 2011 NIST/SES World Standards Day paper competition]. Standards Engineering, 64(3), 1 & 3-5 [http://ssrn.com/abstract=2083975].

Fisher, W. P., Jr. (2014, Autumn). The central theoretical problem of the social sciences. Rasch Measurement Transactions, 28(2), 1464-1466.

Frantz, R., & Leeson, R. (Eds.). (2013). Hayek and behavioral economics. (Archival Insights Into the Evolution of Economics). New York: Palgrave Macmillan.

Gleeson-White, J. (2015). Six capitals, or can accountants save the planet? Rethinking capitalism for the 21st century. New York: Norton.

Greider, W. (2003). The soul of capitalism: Opening paths to a moral economy. New York: Simon & Schuster.

Griliches, Z. (1994, March). Productivity, R&D, and the data constraint. American Economic Review, 84(1), 1-23.

Grootaert, C. (1998). Social capital: The missing link? (Vol. 3). Social Capital Intiative Working Paper). Washington, D.C.: The World Bank.

Hand, J. R. M., & Lev, B. (Eds.). (2003). Intangible assets: Values, measures, and risks. Oxford Management Readers). Oxford, England: Oxford University Press.

Hart, S. L. (2005). (2007). Capitalism at the crossroads: Aligning business, earth, and humanity (Foreword by Al Gore) (2nd ed.). Wharton School Publishing.

Hawken, P. (1993). The ecology of commerce: A declaration of sustainability. New York: HarperCollins Publishers.

Hawken, P. (2007). Blessed unrest: How the largest movement in the world came into being and why no one saw it coming. New York: Viking Penguin.

Hayek, F. A. (1945, September). The use of knowledge in society. American Economic Review, 35, 519-530. (Rpt. in Individualism and economic order (pp. 77-91). Chicago: University of Chicago Press.)

Hayek, F. A. (1955). The counter revolution of science. Glencoe, Illinois: Free Press.

Hayek, F. A. (1988). The fatal conceit: The errors of socialism (W. W. Bartley, III, Ed.) (Vol. I). The Collected Works of F. A. Hayek. Chicago: University of Chicago Press.

Korten, D. (2009). Agenda for a new economy: From phantom wealth to real wealth. San Francisco: Berret-Koehler Publishing.

Krueger, A. B. (Ed.). (2009). Measuring the subjective well-being of nations: National accounts of time use and well-being. National Bureau of Economic Research Conference Reports). Chicago, Illinois: University of Chicago Press.

Swann, G. M. P. (2001). “No Wealth But Life”: When does conventional wealth create Ruskinian wealth. European Research Studies, 4(3-4), 5-18.

Vemuri, A. W., & Costanza, R. (2006, 10 June). The role of human, social, built, and natural capital in explaining life satisfaction at the country level: Toward a National Well-Being Index. Ecological Economics, 58(1), 119-133.

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LivingCapitalMetrics Blog by William P. Fisher, Jr., Ph.D. is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
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Self-Sustaining Sustainability, Once Again, Already

August 12, 2018

The urgent need for massive global implementations of sustainability policies and practices oddly and counterproductively has not yet led to systematic investments in state of the art sustainability metric standards. My personal mission is to contribute to meeting this need. Longstanding, proven resources in the art and science of precision instrumentation calibration and explanatory theory are available to address these problems. In the same way technical standards for measuring length, mass, volume, time, energy, light, etc. enable the coordination of science and commerce for manufactured capital and property, so, too, will a new class of standards for measuring human, social, and natural capital.

This new art and science contradicts common assumptions in three ways. First, contrary to popular opinion that measuring these things is impossible, over 90 years of research and practice support a growing consensus among weights and measures standards engineers (metrologists) and social and psychological measurement experts that relevant unit standards are viable, feasible, and desirable.

Common perceptions are contradicted in a second way in that measurement of this kind does not require reducing human individuality to homogenized uniform sameness. Instead of a mechanical metaphor of cogs in a machine, the relevant perspective is an organic or musical one. The goal is to ensure that local uniqueness and creative improvisations are freely expressed in a context informed by shared standards (like DNA, or a musical instrument tuning system).

The third way in which much of what we think we know is mistaken concerns how to motivate adoption of sustainability policies and practices. Many among us are fearful that neither the general population nor its leaders in government and business care enough about sustainability to focus on implementing solutions. But finding the will to act is not the issue. The problem is how to create environments in which new sustainable forms of life multiply and proliferate of their own accord. To do this, people need means for satisfying their own interests in life, liberty, and the pursuit of happiness. The goal, therefore, is to organize knowledge infrastructures capable of informing and channeling the power of individual self-interest. The only way mass scale self-sustaining sustainable economies will ever happen is by tapping the entrepreneurial energy of the profit motive, where profit is defined not just in financial terms but in the quality of life and health terms of authentic wealth and genuine productivity.

We manage what we measure. If we are to collectively, fluidly, efficiently, and innovatively manage the living value of our human, social, and natural capital, we need, first, high quality information expressed in shared languages communicating that value. Second, we need, to begin with, new scientific, legal, economic, financial, and governmental institutions establishing individual rights to ownership of that value, metric units expressing amounts of that value, conformity audits for ascertaining the accuracy and precision of those units, financial alignments of the real value measured with bankable dollar amounts, and investment markets to support entrepreneurial innovations in creating that value.

The end result of these efforts will be a capacity for all of humanity to pull together in common cause to create a sustainable future. We will each be able to maximize our own personal potential at the same time we contribute to the greater good. We will not only be able to fulfill the potential of our species as stewards of the earth, we will have fun doing it! For technical information resources, see below. PDFs are available on request, and can often be found freely available online.

Self-Sustaining Sustainability

Relevant Information Resources

William P. Fisher, Jr., Ph.D.

Barney, M., & Fisher, W. P., Jr. (2016). Adaptive measurement and assessment. Annual Review of Organizational Psychology and Organizational Behavior, 3, 469-490.

Fisher, W. P., Jr. (1997). Physical disability construct convergence across instruments: Towards a universal metric. Journal of Outcome Measurement, 1(2), 87-113.

Fisher, W. P., Jr. (1999). Foundations for health status metrology: The stability of MOS SF-36 PF-10 calibrations across samples. Journal of the Louisiana State Medical Society, 151(11), 566-578.

Fisher, W. P., Jr. (2000). Objectivity in psychosocial measurement: What, why, how. Journal of Outcome Measurement, 4(2), 527-563.

Fisher, W. P., Jr. (2002). “The Mystery of Capital” and the human sciences. Rasch Measurement Transactions, 15(4), 854 [http://www.rasch.org/rmt/rmt154j.htm].

Fisher, W. P., Jr. (2003). The mathematical metaphysics of measurement and metrology: Towards meaningful quantification in the human sciences. In A. Morales (Ed.), Renascent pragmatism: Studies in law and social science (pp. 118-153). Brookfield, VT: Ashgate Publishing Co.

Fisher, W. P., Jr. (2004). Meaning and method in the social sciences. Human Studies: A Journal for Philosophy & Social Sciences, 27(4), 429-454.

Fisher, W. P., Jr. (2007). Living capital metrics. Rasch Measurement Transactions, 21(1), 1092-1093 [http://www.rasch.org/rmt/rmt211.pdf].

Fisher, W. P., Jr. (2009, November 19). Draft legislation on development and adoption of an intangible assets metric system. Living Capital Metrics blog: https://livingcapitalmetrics.wordpress.com/2009/11/19/draft-legislation/.

Fisher, W. P., Jr. (2009). Invariance and traceability for measures of human, social, and natural capital. Measurement, 42(9), 1278-1287.

Fisher, W. P., Jr. (2009). NIST Critical national need idea White Paper: metrological infrastructure for human, social, and natural capital (http://www.nist.gov/tip/wp/pswp/upload/202_metrological_infrastructure_for_human_social_natural.pdf). Washington, DC: National Institute for Standards and Technology.

Fisher, W. P., Jr. (2010, 22 November). Meaningfulness, measurement, value seeking, and the corporate objective function: An introduction to new possibilities. LivingCapitalMetrics.com, Sausalito, California.

Fisher, W. P., Jr. (2010). Measurement, reduced transaction costs, and the ethics of efficient markets for human, social, and natural capital. Bridge to Business Postdoctoral Certification, Freeman School of Business, Tulane University (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2340674).

Fisher, W. P., Jr. (2010). The standard model in the history of the natural sciences, econometrics, and the social sciences. Journal of Physics Conference Series, 238(1), 012016.

Fisher, W. P., Jr. (2011). Bringing human, social, and natural capital to life: Practical consequences and opportunities. In N. Brown, B. Duckor, K. Draney & M. Wilson (Eds.), Advances in Rasch Measurement, Vol. 2 (pp. 1-27). Maple Grove, MN: JAM Press.

Fisher, W. P., Jr. (2012). Measure and manage: Intangible assets metric standards for sustainability. In J. Marques, S. Dhiman & S. Holt (Eds.), Business administration education: Changes in management and leadership strategies (pp. 43-63). New York: Palgrave Macmillan.

Fisher, W. P., Jr. (2012). What the world needs now: A bold plan for new standards [Third place, 2011 NIST/SES World Standards Day paper competition]. Standards Engineering, 64(3), 1 & 3-5 [http://ssrn.com/abstract=2083975].

Fisher, W. P., Jr. (2015). A probabilistic model of the law of supply and demand. Rasch Measurement Transactions, 29(1), 1508-1511 [http://www.rasch.org/rmt/rmt291.pdf].

Fisher, W. P., Jr. (2015). Rasch measurement as a basis for metrologically traceable standards. Rasch Measurement Transactions, 28(4), 1492-1493 [http://www.rasch.org/rmt/rmt284.pdf].

Fisher, W. P., Jr. (2015). Rasch metrology: How to expand measurement locally everywhere. Rasch Measurement Transactions, 29(2), 1521-1523.

Fisher, W. P., Jr. (2017, September). Metrology, psychometrics, and new horizons for innovation. 18th International Congress of Metrology, Paris, 10.1051/metrology/201709007.

Fisher, W. P., Jr. (2017). A practical approach to modeling complex adaptive flows in psychology and social science. Procedia Computer Science, 114, 165-174.

Fisher, W. P., Jr. (2018). How beauty teaches us to understand meaning. Educational Philosophy and Theory, in review.

Fisher, W. P., Jr. (2018). Separation theorems in econometrics and psychometrics: Rasch, Frisch, two Fishers, and implications for measurement. Scandinavian Economic History Review, in review.

Fisher, W. P., Jr., Harvey, R. F., & Kilgore, K. M. (1995). New developments in functional assessment: Probabilistic models for gold standards. NeuroRehabilitation, 5(1), 3-25.

Fisher, W. P., Jr., Harvey, R. F., Taylor, P., Kilgore, K. M., & Kelly, C. K. (1995). Rehabits: A common language of functional assessment. Archives of Physical Medicine and Rehabilitation, 76(2), 113-122.

Fisher, W. P., Jr., & Stenner, A. J. (2011, January). Metrology for the social, behavioral, and economic sciences (Social, Behavioral, and Economic Sciences White Paper Series).National Science Foundation: http://www.nsf.gov/sbe/sbe_2020/submission_detail.cfm?upld_id=36.

Fisher, W. P., Jr., & Stenner, A. J. (2011, August 31 to September 2). A technology roadmap for intangible assets metrology. In Fundamentals of measurement science. International Measurement Confederation (IMEKO) TC1-TC7-TC13 Joint Symposium, http://www.db-thueringen.de/servlets/DerivateServlet/Derivate-24493/ilm1-2011imeko-018.pdf, Jena, Germany.

Fisher, W. P., Jr., & Stenner, A. J. (2016). Theory-based metrological traceability in education: A reading measurement network. Measurement, 92, 489-496.

Fisher, W. P., Jr., & Wilson, M. (2015). Building a productive trading zone in educational assessment research and practice. Pensamiento Educativo: Revista de Investigacion Educacional Latinoamericana, 52(2), 55-78.

Pendrill, L., & Fisher, W. P., Jr. (2013). Quantifying human response: Linking metrological and psychometric characterisations of man as a measurement instrument. Journal of Physics Conference Series, 459, 012057.

Pendrill, L., & Fisher, W. P., Jr. (2015). Counting and quantification: Comparing psychometric and metrological perspectives on visual perceptions of number. Measurement, 71, 46-55.

 

Creative Commons License
LivingCapitalMetrics Blog by William P. Fisher, Jr., Ph.D. is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
Based on a work at livingcapitalmetrics.wordpress.com.
Permissions beyond the scope of this license may be available at http://www.livingcapitalmetrics.com.

Self-Sustaining Sustainability

August 6, 2018

After decades of efforts and massive resources expended in trying to create a self-sustaining sustainable economy, perhaps it is time to wonder if we are going about it the wrong way. There seems to be truly significant and widespread desire for change, but the often inspiring volumes of investments and ingenuity applied to the problem persistently prove insufficient to the task. Why?

I’ve previously and repeatedly explained how finding the will to change is not the issue. This time I’ll approach my proposed solution in a different way.

Q: How do we create a self-sustaining sustainable economy?

A: By making sustainability profitable in monetary terms as well as in the substantive real terms of the relationships we live out with each other and the earth. Current efforts in this regard focus solely on reducing energy costs enough to compensate for investments in advancing the organizational mission. We need far more comprehensively designed solutions than that.

Q: How do we do that?

A: By financially rewarding improved sustainability at every level of innovation, from the individual to the community to the firm.

Q: How do we do that?

A: By instituting rights to the ownership of human, social, and natural capital properties, and by matching the demand for sustainability with the supply of it in a way that will inform arbitrage and pricing.

Q: How do we do that?

A: By lowering the cost of the information needed to be able to know how many shares of human, social, and natural capital stocks are owned, and to match demand with supply.

Q: How could that be done?

A: By investing as a society in improving the quality and distribution of the available information.

Q: What does that take?

A: Creating dependable and meaningful tools for ascertaining the quantity, quality, and type of sustainability impacts on human, social, and natural capital being offered.

Q: Can that be done?

A: The technical art and science of measurement needed for creating these tools is well established, having been in development for almost 100 years.

Q: How do we start?

A: An important lesson of history is that building the infrastructure and its array of applications follows in the wake of, and cannot precede, the institution of the constitutional ideals. We must know what the infrastructure and applications will look like in their general features, but nothing will ever be done if we think we have to have them in place before instantiating the general frame of reference. The most general right to own legal title to human, social, and natural capital can be instituted, and the legal status of new metric system units can be established, before efforts are put into unit standards, traceability processes, protocols for intralaboratory ruggedness tests and interlaboratory round robin trials, conformity assessments, etc.

Q: It sounds like an iterative process.

A: Yes, one that must attend from the start to the fundamental issues of information coherence and complexity, as is laid out in my recent work with Emily Oon, Spencer Benson, Jack Stenner, and others.

Q: This sounds highly technical, utilitarian, and efficient. But all the talk of infrastructure, standards, science, and laboratories sounds excessively technological. Is there any place in this scheme for ecological values, ethics, and aesthetics? And how are risk and uncertainty dealt with?

A: We can take up each of these in turn.

Ecological values: To use an organic metaphor, we know the DNA of the various human, social, and natural capital forms of life, or species, and we know their reproductive and life cycles, and their ecosystem requirements. What we have not done is to partner with each of these species in relationships that focus on maximizing the quality of their habitats, their maturation, and the growth of their populations. Social, psychological, and environmental relationships are best conceived as ecosystems of mutual interdependencies. Being able to separate and balance within-individual, between-individual, and collective levels of complexity in these interdependencies will be essential to the kinds of steward leadership needed for creating and maintaining new sociocognitive ecosystems. Our goal here is to become the change we want to institute, since caterpillar to butterfly metamorphoses come about only via transformations from within.

Ethics: The motivating intention is to care simultaneously and equally effectively for both individual uniqueness and global humanity. In accord with the most fundamental ethical decision, we choose discourse over violence, and we do so by taking language as the model for how things come into words. Language is itself alive in the sense of the collective processes by which new meanings come into it. Language moreover has the remarkable capacity of supporting local concrete improvisations and creativity at the same time that it provides navigable continuity and formal ideals. Care for the unity and sameness of meaning demands a combination of rigorous conceptual determinations embodied in well-defined words with practical applications of those words in local improvisations. That is how we support the need to make decisions with inevitably incomplete and inconsistent information while not committing the violence of the premature conclusion. The challenge is one of finding a balance between openness and boundaries that allows language and our organizational cultures to be stable while also evolving. Our technical grasp of complex adaptive systems, autopoiesis, and stochastic measurement information models is advanced enough to meet these ethical requirements of caring for ourselves, each other, and the earth.

Aesthetics: An aesthetic desire for and love of beauty roots the various forms of life inhabiting diverse niches in the proposed knowledge ecosystem and information infrastructure, and does so in the ground of the ethical choice of discourse and meaning over violence. The experience of beauty teaches us how to understand meaning. The attraction to beauty is a unique human phenomenon because it combines apparent opposites into a single complex feeling. Even when the object of desire is possessed as fully as possible, desire is not eliminated, and even when one feels the object of desire to be lost or completely out of touch, its presence and reality is still felt. So, too, with meaning: no actual instance of anything in the world ever embodies the fullness of an abstract conceptual ideal. This lesson of beauty is perhaps most plainly conveyed in music, where artists deliberately violate the standards of instrument tuning to create fascinating and absorbing combinations of harmony and dissonance from endlessly diverse ensembles. Some tunings persist beyond specific compositions to become immediately identifiable trademark sounds. In taking language as a model, the aesthetic combination of desire and possession informs the ethics of care for the unity and sameness of meaning, and vice versa. And ecological values, ethics, and aesthetics stand on par with the technical concerns of calibration and measurement.

Risk and uncertainty: Calibrating a tool relative to a unit standard is by itself already a big step toward reducing uncertainty and risk. Instead of the chaos of dozens of disconnected sustainability indicators, or the cacophony of hundreds or thousands of different tests, assessments, or surveys measuring the same things, we will have data and theory supporting interpretation of reproducible patterns. These patterns will be, and in many cases already are, embodied in instruments that further reduce risk by defining an invariant unit of comparison, simplifying interpretation, reducing opportunities for mistakes, by quantifying uncertainty, and by qualifying it in terms of the anomalous exceptions that depart from expectations. Each of these is a special feature of rigorously defined measurement that will eventually become the expected norm for information on sustainability.

For more on these themes, see my other blog posts here, my various publications, and my SSRN page.

 

Creative Commons License
LivingCapitalMetrics Blog by William P. Fisher, Jr., Ph.D. is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
Based on a work at livingcapitalmetrics.wordpress.com.
Permissions beyond the scope of this license may be available at http://www.livingcapitalmetrics.com.