Archive for the ‘law’ Category

Externalities are to markets as anomalies are to scientific laws

October 28, 2011

Economic externalities are to efficient markets as any consistent anomaly is relative to a lawful regularity. Government intervention in markets is akin to fudging the laws of physics to explain the wobble in Uranus’ orbit, or to explain why magnetized masses would not behave like wooden or stone masses in a metal catapult (Rasch’s example). Further, government intervention in markets is necessary only as long as efficient markets for externalized forms of capital are not created. The anomalous exceptions to the general rule of market efficiency have long since been shown to themselves be internally consistent lawful regularities in their own right amenable to configuration as markets for human, social and natural forms of capital.

There is an opportunity here for the concise and elegant statement of the efficient markets hypothesis, the observation of certain anomalies, the formulation of new theories concerning these forms of capital, the framing of efficient markets hypotheses concerning the behavior of these anomalies, tests of these hypotheses in terms of the inverse proportionality of two of the parameters relative to the third, proposals as to the uniform metrics by which the scientific laws will be made commercially viable expressions of capital value, etc.

We suffer from the illusion that trading activity somehow spontaneously emerges from social interactions. It’s as though comparable equivalent value is some kind of irrefutable, incontestable feature of the world to which humanity adapts its institutions. But this order of things plainly puts the cart before the horse when the emergence of markets is viewed historically. The idea of fair trade, how it is arranged, how it is recognized, when it is appropriate, etc. varies markedly across cultures and over time.

Yes, “’the price of things is in inverse ratio to the quantity offered and in direct ratio to the quantity demanded’ (Walras 1965, I, 216-17)” (Mirowski, 1988, p. 20). Yes, Pareto made “a direct extrapolation of the path-independence of equilibrium energy states in rational mechanics and thermodynamics” to “the path-independence of the realization of utility” (Mirowski, 1988, p. 21). Yes, as Ehrenfest showed, “an analogy between thermodynamics and economics” can be made, and economic concepts can be formulated “as parallels of thermodynamic concepts, with the concept of equilibrium occupying the central position in both theories” (Boumans, 2005, p. 31).  But markets are built up around these lawful regularities by skilled actors who articulate the rules, embody the roles, and initiate the relationships comprising economic, legal, and scientific institutions. “The institutions define the market, rather than the reverse” (Miller & O’Leary, 2007, p. 710). What we need are new institutions built up around the lawful regularities revealed by Rasch models. The problem is how to articulate the rules, embody the roles, and initiate the relationships.

Noyes (1936, pp. 2, 13; quoted in De Soto 2000, p. 158) provides some useful pointers:

“The chips in the economic game today are not so much the physical goods and actual services that are almost exclusively considered in economic text books, as they are that elaboration of legal relations which we call property…. One is led, by studying its development, to conceive the social reality as a web of intangible bonds–a cobweb of invisible filaments–which surround and engage the individual and which thereby organize society…. And the process of coming to grips with the actual world we live in is the process of objectivizing these relations.”

 Noyes (1936, p. 20, quoted in De Soto 2000, p. 163) continues:

“Human nature demands regularity and certainty and this demand requires that these primitive judgments be consistent and thus be permitted to crystallize into certain rules–into ‘this body of dogma or systematized prediction which we call law.’ … The practical convenience of the public … leads to the recurrent efforts to systematize the body of laws. The demand for codification is a demand of the people to be released from the mystery and uncertainty of unwritten or even of case law.” [This is quite an apt statement of the largely unstated demands of the Occupy Wall Street movement.]

  De Soto (2000, p. 158) explains:

 “Lifting the bell jar [integrating legal and extralegal property rights], then, is principally a legal challenge. The official legal order must interact with extralegal arrangements outside the bell jar to create a social contract on property and capital. To achieve this integration, many other disciplines are of course necessary … [economists, urban planners, agronomists, mappers, surveyers, IT specialists, etc]. But ultimately, an integrated national social contract will be concretized only in laws.”

  “Implementing major legal change is a political responsibility. There are various reasons for this. First, law is generally concerned with protecting property rights. However, the real task in developing and former communist countries is not so much to perfect existing rights as to give everyone a right to property rights–‘meta-rights,’ if you will. [Paraphrasing, the real task in the undeveloped domains of human, social, and natural capital is not so much the perfection of existing rights as it is to harness scientific measurement in the name of economic justice and grant everyone legal title to their shares of their ownmost personal properties, their abilities, health, motivations, and trustworthiness, along with their shares of the common stock of social and natural resources.] Bestowing such meta-rights, emancipating people from bad law, is a political job. Second, very small but powerful vested interests–mostly repre- [p. 159] sented by the countries best commercial lawyers–are likely to oppose change unless they are convinced otherwise. Bringing well-connected and moneyed people onto the bandwagon requires not consultants committed to serving their clients but talented politicians committed to serving their people. Third, creating an integrated system is not about drafting laws and regulations that look good on paper but rather about designing norms that are rooted in people’s beliefs and are thus more likely to be obeyed and enforced. Being in touch with real people is a politician’s task. Fourth, prodding underground economies to become legal is a major political sales job.”

 De Soto continues (p. 159), intending to refer only to real estate but actually speaking of the need for formal legal title to personal property of all kinds, which ought to include human, social, and natural capital:

  “Without succeeding on these legal and political fronts, no nation can overcome the legal apartheid between those who can create capital and those who cannot. Without formal property, no matter how many assets they accumulate or how hard they work, most people will not be able to prosper in a capitalist society. They will continue to remain beyond the radar of policymakers, out of the reach of official records, and thus economically invisible.”

Boumans, M. (2005). How economists model the world into numbers. New York: Routledge.

De Soto, H. (2000). The mystery of capital: Why capitalism triumphs in the West and fails everywhere else. New York: Basic Books.

Miller, P., & O’Leary, T. (2007, October/November). Mediating instruments and making markets: Capital budgeting, science and the economy. Accounting, Organizations, and Society, 32(7-8), 701-34.

Mirowski, P. (1988). Against mechanism: Protecting economics from science. Lanham, MD: Rowman & Littlefield.

Noyes, C. R. (1936). The institution of property. New York: Longman’s Green.

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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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Universal Rights and Universal Measures: Advancing Science, Economics, and Democracy Simultaneously

January 14, 2010

Art historians and political theorists often remark on the way the columns in Greek temples symbolize the integration of individuals and society in democracies. The connection of architecture and forms of government is well enough known that at least one theater critic was compelled to include it in a review of a World War II-themed musical (Wonk, 2002). With an eye to illuminating the victory over fascism, he observed that Greek temple pillars

“are unique, curved, each one slightly different. They are harmonized in a united effort. They are a democracy. Whereas, the temples of the older, Eastern empires are supported by columns that are simply straight sticks, interchangeable. The phalanx of individual citizens was stronger than the massed army of slaves [and so 9,000 Greek citizen soldiers could defeat 50,000 Persian mercenaries and slaves at the Battle of Marathon in the fifth century BCE].”

Wonk makes this digression in a review of a musical, The 1940’s Radio Hour, to set the stage for his point that

“while listening to the irrepressible and irresistible outpourings of Tin Pan Alley, I understood that the giant fascist war machine, with its mechanical stamp, stamp, stamp of boots was defeated, in a sense, by American syncopation. ‘Deutscheland Deutscheland Uber Alles’ ran aground and was wrecked on the shoals of ‘The Boogie Woogie Bugle Boy of Company B.'”

Of course, the same thing has been said before (the Beatles’ “Back in the USSR” brought down the Berlin Wall, etc.), but the sentiment is right on target. The creativity and passion of free people will ultimately always win out over oppressive regimes that kill joy and try to control innovation. As Emma Goldman is famously paraphrased, a revolution that bans dancing isn’t worth having. What we see happening here is a way in which different sectors of life are co-produced as common values resonate across the social, political, economic, and scientific spheres (Jasanoff, 2004; Jasanoff and Martello, 2004; Wise, 1995).

So how does science come to bear? Consider Ken Alder’s (2002, pp. 2, 3) perspective on the origins of the metric system:

“Just as the French Revolution had proclaimed universal rights for all people, the savants argued, so too should it proclaim universal measures.”
“…the use a society makes of its measures expresses its sense of fair dealing. That is why the balance scale is a widespread symbol of justice. … Our methods of measurement define who we are and what we value.”

As I’ve been saying in the signature line of my emails for many years, “We are what we measure. It’s time we measured what we want to be.” The modern world’s alienating consumer culture is fundamentally characterized by they way it compromises our ability to relate our experiences as individuals to shared stories that are true of us all, even if they actually never happened in their specific details to any of us. Being able to recognize the pattern of our own lives in the stories that we tell is what makes for science and technology’s universal applicability, as well as for great literature, powerful historical accounts, poetry that resonates across the centuries, as well as political and religious convictions strong enough to rationalize war and totalitarian repression.

In traditional cultures, ancient myths tell the stories that shape the world and enable everyone to find and value their place in it. Because these stories were transmitted from generation to generation orally, they could change a little with each retelling without anyone noticing. This allowed the myths to remain current and relevant as history unfolded in times with a slower pace of change.

But modern Western culture is blessed and cursed with written records that remain fixed. Instead of the story itself slowly changing with the times in every retelling, now new interpretations of the story emerge more quickly in the context of an overall faster pace of change, opening the door to contentious differences in the way the text is read. We’re now in the untenable and tense situation of some of us (relativists) feeling that all interpretations are legitimate, and others of us (fundamentalists) feeling that our interpretation is the only valid one.

Contrary to the way it often seems, rampant relativism and fundamentalist orthodoxy are not our only alternatives. As Paul Ricoeur (1974, p. 291-292) put it,

“…for each of the historical societies, the developing as well as those advanced in industrialization, the task is to exercise a kind of permanent arbitration between technical universalism and the personality constituted on the ethico-political plane. All the struggles of decolonization and liberation are marked by the double necessity of entering into the global technical society and being rooted in the cultural past.”

Without going into an extensive analysis of the ways in which the metaphors embedded in each culture’s language, concepts and world view structure meaning in universally shared ways, suffice it to say that what we need is a way of mediating between the historical past and a viable future.

We obtain mediations of this kind when we are able to identify patterns in our collective behaviors consistent enough to be considered behavioral laws. Such patterns are revealed in Rasch measurement instrument calibration studies by the way that every individual’s pattern of responses to the questions asked might be unique but still in probabilistic conformity with the overall pattern in the data as a whole. What we have in Rasch measurement is directly analogous with the pillars of ancient Greek temples: unique individuals harmonized and coordinated in common interpretations, collective effort and shared purpose.

The difficulty is in balancing respect for individual differences with capitalizing on the aggregate pattern. This is, as Gadamer (1991, pp. 7-8) says, the

“systematic problem of philosophy itself: that the part of lived reality that can enter into the concept is always a flattened version-like every projection of a living bodily existence onto a surface. The gain in unambiguous comprehensibility and repeatable certainty is matched by a loss in stimulating multiplicity of meaning.”

The problem is at least as old as Plato’s recognition of the way that (a) the technology of writing supplants and erases the need for detailed memories, and (b) counting requires us to metaphorically abstract something in common from what are concretely different entities. In social measurement, justice and respect for individual dignity requires that we learn to appreciate uniqueness while taking advantage of shared similarities (Ballard, 1978, p. 189).

Rasch’s models for measurement represent a technology essential to achieving this balance between the individual and society (Fisher, 2004, 2010). In contrast with descriptive statistical models that focus on accounting for as much variation as possible within single data sets, prescriptive measurement models focus on identifying consistent patterns across data sets. Where statistical models are content to conceive of individuals as interchangeable and structurally identical, measurement models conceive of individuals as unique and seek to find harmonious patterns of shared meanings across them. When such patterns are in hand, we are able to deploy instruments embodying shared meanings to the front lines of applications in education, health care, human resource management, organizational performance assessment, risk management, etc.

The consistent data patterns observed over several decades of Rasch applications (for examples, see Bond, 2008; Stenner, Burdick, Sanford, & Burdick, 2006) document and illustrate self-organizing forms of our collective life. They are, moreover, evidence of capital resources of the first order that we are only beginning to learn about and integrate into our institutions and social expectations. Wright (1999, p. 76) recognized that we need to “reach beyond the data in hand to what these data might imply about future data, still unmet, but urgent to foresee.” When repeated observations, tests, experiments, and practices show us unequivocally that our abilities, attitudes, behaviors, health, social relationships, etc. are structured in ways that we can rely on as objective constants across the particulars of who, when, where, and what, as the burgeoning scientific literature shows, we will create a place in which we will again feel at home in a larger community of shared values.

To take one example, everyone is well aware that “it’s who you know, not what you know” that matters most in finding a job, making sales, or in generally creating a place for oneself in the world. The phenomenon of online social networking has only made the truth of this platitude more evident. Culturally, we have evolved ways of adapting to the unfairness of this, though it still rankles and causes discontent.

But what if we capitalized on the general consensus on the structure of abilities, motivations, productivity, health, and trustworthiness that is emerging in the research literature? What if we actually created an Intangible Assets Metric System (see my 2009 blog on this issue) that would provide a basis of comparison integrating individual perspectives with the collective social perspective? Such an integration is what is implied in every successful Rasch measurement instrument calibration. Following through on these successes to the infrastructure of rights to our own human, social, and natural capital would not only advance economic prosperity and scientific learning on a whole new scale of magnitude, but democratic institutions themselves would also be renewed in fundamental ways.

The convergence of political revolutions, the Industrial Revolution, and the Second Scientific revolution in the late 18th and early 19th centuries was, after all, not just a coincidence. In the same way that the metric system simultaneously embodied the French Revolution’s political values of universal rights, equal representation, fairness and justice; scientific values of universal comparability; and capitalist values of efficient, open markets, so, too, will an Intangible Assets Metric System expand and coordinate these values as we once again reinvent who we are and what we want to be.

Alder, K. (2002). The measure of all things: The seven-year odyssey and hidden error that transformed the world. New York: The Free Press.

Ballard, E. G. (1978). Man and technology: Toward the measurement of a culture. Pittsburgh, Pennsylvania: Duquesne University Press.

Bond, T. (2008). Invariance and item stability. Rasch Measurement Transactions, 22(1), 1159 [http://www.rasch.org/rmt/rmt221h.htm].

Fisher, W. P., Jr. (2004, October). Meaning and method in the social sciences. Human Studies: A Journal for Philosophy and the Social Sciences, 27(4), 429-54.

Fisher, W. P., Jr. (2010). Reducible or irreducible? Mathematical reasoning and the ontological method. Journal of Applied Measurement, 11, in press.

Gadamer, H.-G. (1991). Plato’s dialectical ethics: Phenomenological interpretations relating to the Philebus (R. M. Wallace, Trans.). New Haven, Connecticut: Yale University Press.

Jasanoff, S. (2004). States of knowledge: The co-production of science and social order. International Library of Sociology). New York: Routledge.

Jasanoff, S., & Martello, M. L. ((Eds.)). (2004). Earthly politics: Local and global in environmental governance. Politics, Science, and the Environment). Cambridge, MA: MIT Press.

Ricoeur, P. (1974). Political and social essays (D. Stewart & J. Bien, Eds.). Athens, Ohio: Ohio University Press.

Stenner, A. J., Burdick, H., Sanford, E. E., & Burdick, D. S. (2006). How accurate are Lexile text measures? Journal of Applied Measurement, 7(3), 307-22.

Wise, M. N. (Ed.). (1995). The values of precision. Princeton, New Jersey: Princeton University Press.

Wonk, D. (2002, June 11). Theater review: Looking back. Gambit Weekly, 32. Retrieved 20 November 2009, from http://bestofneworleans.com/gyrobase/PrintFriendly?oid=oid%3A28341.

Wright, B. D. (1999). Fundamental measurement for psychology. In S. E. Embretson & S. L. Hershberger (Eds.), The new rules of measurement: What every educator and psychologist should know (pp. 65-104). Hillsdale, New Jersey: Lawrence Erlbaum Associates.

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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.
Based on a work at livingcapitalmetrics.wordpress.com.
Permissions beyond the scope of this license may be available at http://www.livingcapitalmetrics.com.

Draft Legislation on Development and Adoption of an Intangible Assets Metric System

November 19, 2009

In my opinion, more could be done to effect meaningful and effective health care reform with legislation like that proposed below, which has fewer than 3,800 words, than will ever be possible with the 2,074 pages in Congress’s current health care reform bill. What’s more, creating the infrastructure for human, social, and natural capital markets in this way would not only cost a tiny fraction of the projected $847 billion bill being debated, it would be an investment that would pay returns many times larger than the initial investment. See previous posts in this blog for more info on how and why this is so.

The draft legislation below is adapted from The Metric Conversion Act (Title 15 U.S.C. Chapter6 §(204) 205a – 205k). The viability of a metric system for human, social, and natural capital is indicated by the realized state of scientific rigor in the measurement of human, social, and natural capital (Fisher, 2009b). The need for such a system is indicated by the current crisis’s pointed economic demands that all forms of capital be unified within a common econometric and financial framework (Fisher, 2009a). It is equally demanded by the moral and philosophical requirements of fair play and meaningfulness (Fisher, 2004). The day is fast approaching when a metric system for intangible assets will be recognized as the urgent need that it is (Fisher, 2009c).

At some point in the near future, it can be expected that a table showing how to interpret the units of the Intangible Assets Metric System will be published in the Federal Register, just as the International System units have been.

For those unfamiliar with the state of the art in measurement, these may seem like wildly unrealistic goals. Those wondering how a reasonable person might arrive at such opinions are urged to consult other posts in this blog, and the references cited in them. The advantages of an intangible assets metric system for sustainable and socially responsible economic policies and practices are nothing short of profound. As Georg Rasch (1980, p. xx) said in reference to the stringent demands of his measurement models, “this is a huge challenge, but once the problem has been formulated it does seem possible to meet it.” We are less likely to attain goals that we do not actively formulate. In the spirit of John Dewey’s student, Chiang Mon-Lin, what we need are “wild hypotheses and careful tests.” There is no wilder idea with greater potential impact for redefining profit as the reduction of waste, and for thereby mitigating human suffering, sociopolitical discontent, and environmental degradation.

Fisher, W. P., Jr. (2004, October). Meaning and method in the social sciences. Human Studies: A Journal for Philosophy and the Social Sciences, 27(4), 429-54.

Fisher, W. P., Jr. (2009a). Bringing human, social, and natural capital to life: Practical consequences and opportunities. In M. Wilson, K. Draney, N. Brown, B. Duckor (Eds.), Advances in Rasch Measurement, Vol. Two (p. in press). Maple Grove, MN: JAM Press.

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

Fisher, W. P. J. (2009c). NIST Critical national need idea White Paper: Metrological infrastructure for human, social, and natural capital (Tech. Rep.). New Orleans: LivingCapitalMetrics.com.

Rasch, G. (1980). Probabilistic models for some intelligence and attainment tests (Reprint, with Foreword and Afterword by B. D. Wright, Chicago: University of Chicago Press). Copenhagen, Denmark: Danmarks Paedogogiske Institut.

Title xx U.S.C. Chapter x §(100) 101a – 101k
METRIC SYSTEM FOR INTANGIBLE ASSETS DEVELOPMENT LAW
(Pub. L. 10-xxx, §x, Intangible Assets Metrics Development Act, July 25, 2010)

§ 100. New metric system development authorized. – A new national effort is hereby initiated throughout the United States of America focusing on building and realizing the benefits of a metric system for the intangible assets known as human, social, and natural capital.

§ 101a. Congressional statement of findings. – The Congress finds as follows:

(1) The United States was an original signatory party to the 1875 Treaty of the Meter (20 Stat. 709), which established the General Conference of Weights and Measures, the International Committee of Weights and Measures and the International Bureau of Weights and Measures.

(2) The use of metric measurement standards in the United States was authorized by law in 1866; with the Metric Conversion Act of 1975 this Nation established a national policy of committing itself and taking steps to facilitate conversion to the metric system.

(3) World trade is dependent on the metric system of measurement; continuing trends toward globalization demand expansion of the metric system to include vital economic resources shown scientifically measurable in research conducted over the last 80 years.

(4) Industries and consumers in the United States are often at competitive disadvantages when dealing in domestic and international markets because no existing systems for measuring intangible assets (human, social, and natural capital) are expressed in standardized, universally uniform metrics. The end result is that education, health care, human resource, and other markets are unable to reward quality; supply and demand are unmatched, consumers make decisions with no or insufficient information; and quality cannot be systematically improved.

(5) The inherent simplicity of the metric system of measurement and standardization of weights and measures has led to major cost savings in certain industries which have converted to that system; similar savings are expected to follow from the development and implementation of a metric system for intangible assets.

(6) The Federal Government has a responsibility to develop procedures and techniques to assist industry, especially small business, as it voluntarily seeks to adopt a new metric system of measurement for intangible assets that have always required management but which have not yet been uniformly and systematically measured.

(7) A new metric system of measurement for human, social, and natural capital can provide substantial advantages to the Federal Government in its own operations.

§ 101b. Declaration of policy. – It is therefore the declared policy of the United States-

(1) to support the development and implementation of a new metric system of intangibles assets measurement as the preferred system of weights and measures for United States trade and commerce involving human, social, and natural capital;

(2) to require that each Federal agency,by a date certain and to the extent economically feasible by the end of the fiscal year 2011, use the new metric system of intangibles measurement in its procurements, grants, and other business-related activities, except to the extent that such use is impractical or is likely to cause significant inefficiencies or loss of markets to United States firms, such as when foreign competitors are producing competing products in non-metric units; and

(3) to seek out ways to increase understanding of the new metric system of intangibles measurement through educational information and guidance and in Government publications.

§ 101c. Definitions

As used in this subchapter, the term-

(1) ‘Board’ means the United States Intangible Assets Metrics Board, established under section 101d of this Title;

(2) ‘engineering standard’ means a standard which prescribes (A) a concise set of conditions and requirements that must be satisfied by a material, product, process, procedure, convention, or test method; and (B) the physical, functional, performance and/or conformance characteristics thereof;

(3) ‘international standard or recommendation’ means an engineering standard or recommendation which is (A) formulated and promulgated by an international organization and (B) recommended for adoption by individual nations as a national standard;

(4) ‘metric system of measurement’ means the International System of Units as established by the General Conference of Weights and Measures in 1960 and as interpreted or modified for the United States by the Secretary of Commerce;

(5) ‘full and open competition’ has the same meaning as defined in section 403 of title 41;

(6) ‘total installed price’ means the price of purchasing a product or material, trimming or otherwise altering some or all of that product or material, if necessary to fit with other building components,and then installing that product or material into a Federal facility;

(7) ‘hard-metric’ means measurement, design, and manufacture using the metric system of measurement, but does not include measurement,design, and manufacture using English system measurement units which are subsequently reexpressed in the metric system of measurement;

(8) ‘cost or pricing data or price analysis’ has the meaning given such terms in section 254b of title 41; and

(9) ‘Federal facility’ means any public building (as defined under section 612 of title 40) and shall include any Federal building or construction project: (A) on lands in the public domain;(B) on lands used in connection with Federal programs for agriculture research, recreation, and conservation programs; (C) on or used  in connection with river, harbor, flood control, reclamation, or power projects; (D) on or used in connection with housing and residential projects; (E) on military installations (including any fort, camp,post, naval training station, airfield, proving ground, military supply depot, military school, any similar facility of the Department of Defense); (F) on installations of the Department of Veterans Affairs used for hospital or domiciliary purposes; or (G) on lands used in connection with Federal prisons, but does not include (i)any Federal building or construction project the exclusion of which the President deems to be justified in the public interest, or (ii) any construction project or building owned or controlled by a State government, local government, Indian tribe, or any private entity.

§101d. United States Intangible Assets Metrics Board

(a) Establishment. – There is established, in accordance with this section, an independent instrumentality to be known as a United States Intangible Assets Metrics Board.

(b) Membership; Chairman; appointment of members; term of office;vacancies. – The Board shall consist of 17 individuals, as follows:

(1) the Chairman, a qualified individual who shall be appointed by the President, by and with the advice and consent of the Senate;

(2) seventeen members who shall be appointed by the President, by and with the advice and consent of the Senate, on the following basis-

(A) one to be selected from lists of qualified individuals recommended by psychometricians and organizations representative of psychometric interests;

(B) one to be selected from lists of qualified individuals recommended by social scientists, the scientific and technical community, and organizations representative of social scientists and technicians;

(C) one to be selected from lists of qualified individuals recommended by environmental scientists, the scientific and technical community, and organizations representative of environmental scientists and technicians;

(D) one to be selected from a list of qualified individuals recommended by the National Association of Manufacturers or its successor;

(E) one to be selected from lists of qualified individuals recommended by the United States Chamber of Commerce, or its successor, retailers,and other commercial organizations;

(F) two to be selected from lists of qualified individuals recommended by the American Federation of Labor and Congress of Industrial Organizations or its successor, who are representative of workers directly affected by human capital metrics for health, skills, motivations, and productivity, and by other organizations representing labor;

(G) one to be selected from a list of qualified individuals recommended by the National Governors Conference, the National Council of State Legislatures, and organizations representative of State and local government;

(H) two to be selected from lists of qualified individuals recommended by organizations representative of small business;

(I) one to be selected from lists of qualified individuals representative of the human resource management industry;

(J) one to be selected from a list of qualified individuals recommended by the National Conference on Weights and Measures and standards making organizations;

(K) one to be selected from lists of qualified individuals recommended by educators, the educational community, and organizations representative of educational interests; and

(L) four at-large members to represent consumers and other interests deemed suitable by the President and who shall be qualified individuals.

As used in this subsection, each ‘list’ shall include the names of at least three individuals for each applicable vacancy. The terms of office of the members of the Board first taking office shall expire as designated by the President at the time of nomination; five at the end of the second year; five at the end of the fourth year;and six at the end of the sixth year. The term of office of the Chairman of such Board shall be six years. Members, including the Chairman, may be appointed to an additional term of six years, in the same manner as the original appointment. Successors to members of such Board shall be appointed in the same manner as the original members and shall have terms of office expiring six years from the date of expiration of the terms for which their predecessors were appointed. Any individual appointed to fill a vacancy occurring prior to the expiration of any term of office shall be appointed for the remainder of that term. Beginning 45 days after the date of incorporation of the Board, six members of such Board shall constitute a quorum for the transaction of any function of the Board.

(c) Compulsory powers. – Unless otherwise provided by the Congress, the Board shall have no compulsory powers.

(d) Termination. – The Board shall cease to exist when the Congress, by law, determines that its mission has been accomplished.

§101e. – Functions and powers of Board. – It shall be the function of the Board to devise and carry out a broad program of planning, coordination, and public education, consistent with other national policy and interests, with the aim of implementing the policy set forth in this subchapter. In carrying out this program,the Board shall-

(1) consult with and take into account the interests, views, and costs relevant to the inefficiencies that have long plagued the management of unmeasured forms of capital in United States commerce and industry, including small business; science; engineering; labor; education; consumers; government agencies at the Federal, State, and local level; nationally recognized standards developing and coordinating organizations; intangibles metrics development, planning and coordinating groups; and such other individuals or groups as are considered appropriate by the Board to the carrying out of the purposes of this subchapter. The Board shall take into account activities underway in the private and public sectors, so as not to duplicate unnecessarily such activities;

(2) provide for appropriate procedures whereby various groups,under the auspices of the Board, may formulate, and recommend or suggest, to the Board specific programs for coordinating intangibles metrics development in each industry and segment thereof and specific dimensions and configurations in the new metric system and in other measurements for general use. Such programs, dimensions, and configurations shall be consistent with (A) the needs, interests, and capabilities of manufacturers (large and small), suppliers, labor, consumers, educators,and other interested groups, and (B) the national interest;

(3) publicize, in an appropriate manner, proposed programs and provide an opportunity for interested groups or individuals to submit comments on such programs. At the request of interested parties, the Board, in its discretion, may hold hearings with regard to such programs. Such comments and hearings may be considered by the Board;

(4) encourage activities of standardization organizations to develop or revise, as rapidly as practicable, policy and IT standards based on the new intangibles metrics, and to take advantage of opportunities to promote (A) rationalization or simplification of relationships,(B) improvements of design, (C) reduction of size variations, (D) increases in economy, and (E) where feasible, the efficient use of energy and the conservation of natural resources;

(5) encourage the retention, in the new metric language of human, social, and natural capital standards, of those United States policy and IT designs, practices, and conventions that are internationally accepted or that embody superior technology;

(6) consult and cooperate with foreign governments, and intergovernmental organizations, in collaboration with the Department of State, and, through appropriate member bodies, with private international organizations, which are or become concerned with the encouragement and coordination of increased use of intangible assets metrics measurement units or policy and IT standards based on such units, or both. Such consultation shall include efforts, where appropriate, to gain international recognition for intangible assets metrics standards proposed by the United States;

(7) assist the public through information and education programs, to become familiar with the meaning and applicability of metric terms and measures in daily life. Such programs shall include –

(A) public information programs conducted by the Board, through the use of newspapers, magazines, radio, television, the Internet, social networking, and other media, and through talks before appropriate citizens’ groups, and trade and public organizations;

(B) counseling and consultation by the Secretary of Education; the Secretary of Labor; the Administrator of the Small Business Administration; and the Director of the National Science Foundation, with educational associations, State and local educational agencies, labor education committees, apprentice training committees, and other interested groups, in order to assure (i) that the new intangible assets metric system of measurement is included in the curriculum of the Nation’s educational institutions, and (ii) that teachers and other appropriate personnel are properly trained to teach the intangible assets metric system of measurement;

(C) consultation by the Secretary of Commerce with the National Conference of Weights and Measures in order to assure that State and local weights and measures officials are (i) appropriately involved in intangible assets metric development and adoption activities and (ii) assisted in their efforts to bring about timely amendments to weights and measures laws; and

(D) such other public information activities, by any Federal agency in support of this subchapter, as relate to the mission of suchagency;

(8) collect, analyze, and publish information about the extent of usage of intangible assets metric measurements; evaluate the costs and benefits of that usage; and make efforts to minimize any adverse effects resulting from increasing intangible assets metric usage;

(9) conduct research, including appropriate surveys; publish the results of such research; and recommend to the Congress and to the President such action as may be appropriate to deal with any unresolved problems, issues, and questions associated with intangible assets metric development, adoption, or usage, such problems, issues, and questions may include, but are not limited to, the impact on different occupations and industries, possible increased costs to consumers, the impact on society and the economy, effects on small business, the impact on the international trade position of the United States, the appropriateness of and methods for using procurement by the Federal Government as a means to effect development and adoption of the intangible assets metric system, the proper conversion or transition period in particular sectors of society, and consequences for national defense;

(10) submit annually to the Congress and to the President a report on its activities. Each such report shall include a status report on the development and adoption process as well as projections for continued progress in that process. Such report may include recommendations covering any legislation or executive action needed to implement the programs of development and adoption accepted by the Board. The Board may also submit such other reports and recommendations as it deems necessary;and

(11) submit to the President, not later than 1 year after the date of enactment of the Act making appropriations for carrying out this subchapter, a report on the need to provide an effective structural mechanism for adopting intangible assets metric units in statutes, regulations, and other laws at all levels of government, on a coordinated and timely basis, in response to voluntary programs adopted and implemented by various sectors of society under the auspices and with the approval of the Board. If the Board determines that such a need exists, such report shall include recommendations as to appropriate and effective means for establishing and implementing such a mechanism.

§101f. – Duties of Board. – In carrying out its duties under this subchapter, the Board may –

(1) establish an Executive Committee, and such other committees as it deems desirable;

(2) establish such committees and advisory panels as it deems necessary to work with the various sectors of the Nation’s economy and with Federal and State governmental agencies in the development and implementation of detailed development and adoption plans for those sectors. The Board may reimburse,to the extent authorized by law, the members of such committees;

(3) conduct hearings at such times and places as it deems appropriate;

(4) enter into contracts, in accordance with the Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C. 471et seq.), with Federal or State agencies, private firms, institutions, and individuals for the conduct of research or surveys, the preparation of reports, and other activities necessary to the discharge of its duties;

(5) delegate to the Executive Director such authority as it deems advisable; and

(6) perform such other acts as may be necessary to carry out the duties prescribed by this subchapter.

§101g. – Gifts, donations and bequests to Board

(a) Authorization; deposit into Treasury and disbursement. – The Board may accept, hold, administer, and utilize gifts, donations,and bequests of property, both real and personal, and personal services, for the purpose of aiding or facilitating the work of the Board. Gifts and bequests of money, and the proceeds from the sale of any other property received as gifts or requests, shall be deposited in the Treasury in a separate fund and shall be disbursed upon order of the Board.

(b) Federal income, estate, and gift taxation of property. – For purpose of Federal income, estate, and gift taxation, property accepted under subsection (a) of this section shall be considered as a gift or bequest to or for the use of the United States.

(c) Investment of moneys; disbursement of accrued income. – Upon the request of the Board, the Secretary of the Treasury may invest and reinvest, in securities of the United States, any moneys contained in the fund authorized in subsection (a) of this section. Income accruing from such securities, and from any other property acceptedto the credit of such fund, shall be dispersed upon the order ofthe Board.

(d) Reversion to Treasury of unexpended funds. – Funds not expended by the Board as of the date when it ceases to exist, in accordance with section 105d(d) of this title, shall revert to the Treasury of the United States as of such date.

§101h. – Compensation of Board members; travel expenses.- Members of the Board who are not in the regular full-time employ of the United States shall, while attending meetings or conferences of the Board or while otherwise engaged in the business of the Board, be entitled to receive compensation at a rate not to exceed the daily rate currently being paid grade 18 of the General Schedule (under section 5332 of title 5), including travel time. While so serving, on the business of the Board away from their homes or regular places of business, members of the Board may be allowed travel expenses,including per diem in lieu of subsistence, as authorized by section5703 of title 5, for persons employed intermittently in the Government service. Payments under this section shall not render members of the Board employees or of the United States for any purpose. Members of the Board who are in the employ of the United States shall be entitled to travel expenses when traveling on the business of the Board.

§101i. – Personnel

(a) Executive Director; appointment; tenure; duties. – The Board shall appoint a qualified individual to serve as the Executive Director of the Board at the pleasure of the Board. The Executive Director, subject to the direction of the Board, shall be responsible to the Board and shall carry out the intangible assets metric development and adoption program, pursuant to the provisions of this subchapter and the policies established by the Board.

(b) Executive Director; salary. – The Executive Director of the Board shall serve full time and be subject to the provisions of chapter 51 and subchapter III of chapter 53 of title 5. The annual salary of the Executive Director shall not exceed level III of the Executive Schedule under section 5314 of such title.

(c) Staff personnel; appointment and compensation. – The Board may appoint and fix the compensation of such staff personnel as may be necessary to carry out the provisions of this subchapter in accordance with the provisions of chapter 51 and subchapter III of chapter 53 of title 5.

(d) Experts and consultants; employment and compensation; annual review of contracts. – The Board may (1) employ experts and consultants or organizations thereof, as authorized by section 3109 of title5; (2) compensate individuals so employed at rates not in excess of the rate currently being paid grade 18 of the General Schedule under section 5332 of such title, including travel time; and (3) may allow such individuals, while away from their homes or regular places of business, travel expenses (including per diem in lieu of subsistence) as authorized by section 5703 of such title 5 for persons in the Government service employed intermittently: Provided, however, that contracts for such temporary employment may be renewed annually.

§101j. – Financial and administrative services; sourceand reimbursement. – Financial and administrative services, including those related to budgeting, accounting, financial reporting, personnel, and procurement, and such other staff services as maybe needed by the Board, may be obtained by the Board from the Secretary of Commerce or other appropriate sources in the Federal Government. Payment for such services shall be made by the Board, in advance or by reimbursement, from funds of the Board in such amounts as may be agreed upon by the Chairman of the Board and by the source of the services being rendered.

§101k. – Authorization of appropriations; availability.- There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this subchapter. Appropriations to carry out the provisions of this subchapter may remain available for obligation and expenditure for such period or periods as maybe specified in the Acts making such appropriations.

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