Archive for the ‘legislation’ Category

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.

 

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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.

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Revisiting The Federalist Paper No. 31 by Alexander Hamilton: An Analogy from Geometry

July 10, 2018

[John Platt’s chapters on social chain reactions in his 1966 book, The Steps to Man, provoked my initial interest in looking into his work. That work appears to be an independent development of themes that appear in more well-known works by Tarde, Hayek, McLuhan, Latour, and others, which of course are of primary concern in thinking through metrological and ecosystem issues in psychological and social measurement. My interest also comes in the context of Platt’s supervision of Ben Wright in Robert Mulliken’s physics lab at the U of Chicago in 1948. However, other chapters in this book concern deeper issues of complexity and governance that cross yet more disciplinary boundaries. One of the chapters in the book, for instance, examines the Federalist Papers and remarks on a geometric analogy drawn by Alexander Hamilton concerning moral and political forms of knowledge. The parallel with my own thinking is such that I have restated Hamilton’s theme in my own words within the contemporary context. The following is my effort in this regard. No source citations are given, but a list of supporting references is included at bottom. Hamilton’s original text is available at: https://www.congress.gov/resources/display/content/The+Federalist+Papers#TheFederalistPapers-31.  ]

 

Communication requires that we rely on the shared understandings of a common language. Language puts in play combinations of words, concepts, and things that enable us to relate to one another at varying levels of complexity. Often, we need only to convey the facts of a situation in a simple denotative statement about something learned (“the cat is on the mat”). We also need to be able to think at a higher level of conceptual complexity referred to as metalinguistic, where we refer to words themselves and how we learn about what we’ve learned (“the word ‘cat’ has no fur”). At a third, metacommunicative, level of complexity, we make statements about statements, deriving theories of learning and judgments from repeated experiences of metalinguistic learning about learning (“I was joking when I said the cat was on the mat”).

Human reason moves freely between expressions of and representations of denotative facts, metalinguistic instruments like words, and metacommunicative theories. The combination of assurances obtained from the mutual supports each of these provides the others establishes the ground in which the seeds of social, political, and economic life take root and grow. Thought itself emerges from within the way the correspondence of things, words, and concepts precedes and informs the possibility of understanding and communication.

When understanding and communication fail, that failure may come about because of mistaken perceptions concerning the facts, a lack of vocabulary, or misconceptions colored by interests, passions, or prejudices, or some combination of these three.

The maxims of geometry exhibit exactly this same pattern combining concrete data on things in the world, instruments for abstract measurement, and formal theoretical concepts. Geometry is the primary and ancient example of how the beauty of aesthetic proportions teaches us to understand meaning. Contrary to common sense, which finds these kinds of discontinuities incomprehensible, philosophy since the time of Plato’s Symposium teaches how to make meaning in the face of seemingly irreconcilable differences between the local facts of a situation and the principles to which we may feel obliged to adhere. Geometry meaningfully and usefully, for instance, represents the undrawable infinite divisibility of line segments, as with the irrational length of the hypotenuse of a right isosceles triangle that has the other two sides with lengths of 1.

This apparently absurd and counter-intuitive skipping over of the facts in the construction of the triangular figure and the summary reference to the unstateable infinity of the square root of two is so widely accepted as to provide a basis for real estate property rights that are defensible in courts of law and financially fungible. And in this everyday commonplace we have a model for separating and balancing denotative facts, instrumental words, and judicial theories in moral and political domains.

Humanity has proven far less tractable than geometry over the course of its history regarding possible sciences of morals and politics. This is understandable given humanity’s involvement in its own ongoing development. As Freud put it, humanity’s Narcissistic feeling of being the center of the universe, the crown of creation, and the master of its own mind has suffered a series of blows as it has had to come to terms with the works of Copernicus, Darwin, and Freud himself. The struggle to establish a common human identity while also celebrating individual uniqueness is an epic adventure involving billions of tragic and comedic stories of hubris, sacrifice, and accomplishment. Humanity has arrived at a point now, however, at which a certain obstinate, perverse, and disingenuous resistance to self-understanding has gone too far.

Although the mathematical sciences excel in refining the precision of their tools, longstanding but largely untapped resources for improving the meaningfulness and value of moral and political knowledge have been available for decades. “The obscurity is much oftener in the passions and prejudices of the reasoner than in the subject.” Methods for putting passions on the table for sorting out take advantage of the lessons beauty teaches about meaning and thereby support each of the three levels of complexity in communication.

At this point we encounter the special relevance of those three levels of complexity to the separation and balance of powers in government. The concrete denotative factuality of data is the concern of the executive branch, as befits its orientation to matters of practical application. The abstract metalinguistic instrumentation of words is the concern of the legislative branch, in accord with its focus on the enactment of laws and measures. And formal metacommunicative explanatory theories are the concern of the judicial branch, as is appropriate to its focus on constitutional issues.

For each of us to give our own individual understandings fair play in ways that do not give free rein to unfettered prejudices entangled in words and subtle confusions, we need to be able to communicate in terms that, so far as possible, function equally well within and across each of these levels of complexity. It is only to state the obvious to say that we lack the language needed for communication of this kind. Our moral and political sciences have not yet systematically focused on creating such languages. Outside of a few scattered works, they have not even yet consciously hypothesized the possibility of creating these languages. It is nonetheless demonstrably the case that these languages are feasible, viable, and desirable.

Though good will towards all and a desire to refrain so far as possible from overt exclusionary prejudices for or against one or another group cannot always be assumed, these are the conditions necessary for a social contract and are taken as the established basis for what follows. The choice between discourse and violence includes careful attention to avoiding the violence of the premature conclusion. If we are ever to achieve improved communication and a fuller realization of both individual liberties and social progress, the care we invest in supports for life, liberty, and the pursuit of happiness must flow from this deep source.

Given the discontinuities between language’s levels of complexity, avoiding premature conclusions means needing individualized uncertainty estimates and an associated tolerance for departures from expectations set up by established fact-word-concept associations. For example, we cannot allow a three-legged horse to alter our definition of horses as four-legged animals. Neither should we allow a careless error or lucky guess to lead to immediate and unqualified judgments of learning in education. Setting up the context in which individual data points can be understood and explained is the challenge we face. Information infrastructures supporting this kind of contextualization have been in development for years.

To meet the need for new communicative capacities, features of these information infrastructures will have to include individualized behavioral feedback mechanisms, minimal encroachments on private affairs, managability, modifiability, and opportunities for simultaneously enhancing one’s own interests and the greater good.

It is in this latter area that our interests are now especially focused. Our audacious but not implausible goal is to find ways of enhancing communication and the quality of information infrastructures by extending beauty’s lessons for meaning into new areas. In the same way that geometry facilitates leaps from concrete figures to abstract constructions and from there to formal ideals, so, too, must we learn, learn about that learning, and develop theories of learning in other less well materialized areas, such as student-centered education, and patient-centered health care. Doing so will set the stage for new classes of human, social, and natural capital property rights that are just as defensible in courts of law and financially fungible as real estate.

When that language is created, when those rights are assigned, and when that legal defensibility and financial fungibility are obtained, a new construction of government will follow. In it, the separation and balance of executive, legislative, and judicial powers will be applied with equal regularity and precision down to the within-individual micro level, as well as at the between-individual meso level, and at the social macro level. This distribution of freedom and responsibility across levels and domains will feed into new educational, market, health, and governmental institutions of markedly different character than we have at present.

A wide range of research publications appearing over the last several decades documents unfolding developments in this regard, and so those themes will not be repeated here. Some of these publications are listed below for those interested. Far more remains to be done in this area than has yet been accomplished, to say the least.

 

 

Sources consulted or implied

Andrich, D. (2010). Sufficiency and conditional estimation of person parameters in the polytomous Rasch model. Psychometrika, 75(2), 292-308.

Bateson, G. (1972). Steps to an ecology of mind: Collected essays in anthropology, psychiatry, evolution, and epistemology. Chicago: University of Chicago Press.

Black, P., & Wiliam, D. (2009). Developing the theory of formative assessment. Educational Assessment, Evaluation and Accountability, 21, 5-31.

Black, P., Wilson, M., & Yao, S. (2011). Road maps for learning: A guide to the navigation of learning progressions. Measurement: Interdisciplinary Research & Perspectives, 9, 1-52.

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. (2005, August 1-3). Data standards for living human, social, and natural capital. In Session G: Concluding Discussion, Future Plans, Policy, etc. Conference on Entrepreneurship and Human Rights [http://www.fordham.edu/economics/vinod/ehr05.htm], Pope Auditorium, Lowenstein Bldg, Fordham University.

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. (2009, November 19). Draft legislation on development and adoption of an intangible assets metric system. Retrieved 6 January 2011, from Living Capital Metrics blog: https://livingcapitalmetrics.wordpress.com/2009/11/19/draft-legislation/

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

Fisher, W. P., Jr. (2009). NIST Critical national need idea White Paper: metrological infrastructure for human, social, and natural capital (Tech. Rep. No. 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). 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. Journal of Applied Measurement, 12(1), 49-66.

Fisher, W. P., Jr. (2011). Stochastic and historical resonances of the unit in physics and psychometrics. Measurement: Interdisciplinary Research & Perspectives, 9, 46-50.

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

Fisher, W. P., Jr. (2018). A nondualist social ethic: Fusing subject and object horizons in measurement. TMQ–Techniques, Methodologies, and Quality, in review.

Fisher, W. P., Jr., Oon, E. P.-T., & Benson, S. (2018). Applying Design Thinking to systemic problems in educational assessment information management. Journal of Physics Conference Series, 1044, 012012.

Fisher, W. P., Jr., Oon, E. P.-T., & Benson, S. (2018). Rethinking the role of educational assessment in classroom communities: How can design thinking address the problems of coherence and complexity? Measurement, in review.

Fisher, W. P., Jr., & Stenner, A. J. (2013). On the potential for improved measurement in the human and social sciences. In Q. Zhang & H. Yang (Eds.), Pacific Rim Objective Measurement Symposium 2012 Conference Proceedings (pp. 1-11). Berlin, Germany: Springer-Verlag.

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., & Stenner, A. J. (2018). Ecologizing vs modernizing in measurement and metrology. Journal of Physics Conference Series, 1044, 012025.

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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 [http://www.rasch.org/memo64.htm]). Hillsdale, New Jersey: Lawrence Erlbaum Associates.

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.

With Reich in spirit, but with a different sense of the problem and its solution

October 4, 2015

In today’s editorial in the San Francisco Chronicle, Robert Reich seeks some way of defining a solution to the pressing problems of how globalization and technological changes have made American workers less competitive. He rightly says that “reversing the scourge of widening inequality requires reversing the upward distributions [of income] within the rules of the market, and giving average people the bargaining power they need to get a larger share of the gains from growth.”

But Reich then says that the answer to this problem lies in politics, not economics. As I’ve pointed out before in this blog, focusing on marshaling political will is part of the problem, not part of the solution. Historically, politicians do not lead, they follow. As is demonstrated across events as diverse as the Arab Spring and the Preemption Act of 1841, mass movements of people have repeatedly demanded ways of cutting through the Gordian knots of injustice. And just as the political “leadership” across the Middle East and in the early U.S. dragged its feet, obstructed, and violently opposed change until it was already well underway, so, too, will that pattern repeat itself again in the current situation of inequitable income distribution.

The crux of the problem is that no one can give average people anything, not freedom (contra Dylan’s line in Blowin’ in the Wind about “allowing” people to be free) and certainly not a larger share of the gains from growth. As the old saying goes, you can lead a horse to water, but you can’t make it drink. People have to take what’s theirs. They have to want it, they have to struggle for it, and they have to pay for it, or they cannot own it and it will never be worth anything to them.

It is well known that a lack of individual property rights doomed communism and socialism because when everything is owned collectively by everyone, no one takes responsibility for it. The profit motive has the capacity to drive people to change things. The problem is not in profit itself. If birds and bees and trees and grasses did not profit from the sun, soil, and rain, there would be no life. The problem is in finding how to get a functional, self-sustaining economic ecology off the ground, not in unrealistically trying to manipulate and micromanage every detail.

The fundamental relevant characteristic of the profits being made today from intellectual property rights is that our individual rights to our own human and social capital are counter-productively restricted and undeveloped. How can it be that no one has any idea how much literacy or health capital they have, or what it is worth?! We have a metric system that tells us how much real estate and manufactured capital we own, and we can price it. But despite the well-established scientific facts of decades of measurement science research and practice, none of us can say, “I own x number of shares of stock in intellectual, literacy, or community capital, that have a value of x dollars in today’s market.” We desperately need an Intangible Assets Metric System, and the market rules, roles, and responsibilities that will make it impossible to make a profit while destroying human, social, and natural capital.

In this vein, what Reich gets absolutely correct is hidden inside his phrase, “within the rules of the market.” As I’ve so often repeated in this blog, capitalism is not inherently evil; it is, rather, unfinished. The real evil is in prolonging the time it takes to complete it. As was so eloquently stated by Miller and O’Leary (2007, p. 710):

“Markets are not spontaneously generated by the exchange activity of buyers and sellers. Rather, skilled actors produce institutional arrangements, the rules, roles and relationships that make market exchange possible. The institutions define the market, rather than the reverse.”

We have failed to set up the institutional arrangements needed to define human, social, and natural capital markets. The problem is that we cannot properly manage three of the four major forms of capital (human, social, and natural, with the fourth being manufactured/property) because we do not measure them in a common language built into scientifically, economically, legally and financially accountable titles, deeds, and other instruments.

And so, to repeat another one of my ad nauseum broken record nostrums, the problem is the problem. As long as we keep defining problems in the way we always have, as matters of marshalling political will, we will inadvertently find ourselves contributing more to prolonging tragic and needless human suffering, social discontent, and environmental degradation.

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), 701-734.

Knowledge and skills as the currency of 21st-century economies

March 11, 2012

In his March 11, 2012 New York Times column, Thomas Friedman quotes the OECD’s Andreas Schleicher as saying, “knowledge and skills have become the global currency of 21st-century economies, but there is no central bank that prints this currency. Everyone has to decide on their own how much they will print.” This is a very interesting thing to say, especially because it reveals some common misconceptions about currency, capital, economics, and the institutions in which they are situated.

The question raised in many of the posts in this blog concerns just what kind of bank would print this currency, and what the currency would look like. The issue is of central economic importance, as Schleicher recognizes when he says that economic stimulus certainly has a place in countering a prolonged recession, but “the only sustainable way is to grow our way out by giving more people the knowledge and skills to compete, collaborate and connect in a way that drives our countries forward.”

Following through on the currency metaphor, obvious concerns that arise from Schleicher’s comments stem from the way he conflates the idea of a currency with the value it is supposed to represent. When he says individuals have to decide how much of the currency to print, what he means is they have to decide how much education they want to accrue. This is, of course, far different from simply printing money, which, when this is done and there is no value to back it up, is a sure way to bring about rampant inflation, as Germany learned in the 1920s. Schleicher and Friedman both know this, but the capacity of the metaphor to mislead may not be readily apparent.

Another concern that comes up is why there is no central bank printing the currency for us. Of course, it might seem as though we don’t need banks to print it for us, since, if individuals can print it, then why complicate things by bringing the banks into it? But note, again, that the focus here is on the currency, and nothing is said about the unit in which it is denominated.

The unit of value is the key to the deeper root problem, which is less one of increasing people’s stocks of skills and knowledge (though that is, of course, a great thing to do) and more one of creating the institutions and systems through which we can make order-of-magnitude improvements in the way people invest in and profit from their skills and knowledge. In other words, the problem is in having as many different currencies as there are individuals.

After all, what kind of an economy would we have if the value of the US dollars I hold was different from yours, and from everyone else’s? What if we all printed our own dollars and their value changed depending on who held them (or on how many we each printed)? Everyone would pay different amounts in the grocery store. We’d all spend half our time figuring out how to convert our own currency into someone else’s.

And this is pretty much what we do when it comes to trading on the value of our investments in stocks of knowledge, skills, health, motivations, and trust, loyalty, and commitment, some of the major forms of human and social capital. When we’re able, we put a recognized name brand behind our investments by attending a prestigious university or obtaining care at a hospital known for its stellar outcomes. But proxies like these just aggregate the currencies’ values at a bit higher level of dependence on the company you keep. It doesn’t do anything to solve the problem of actually providing transferable representations you can count on to retain a predictable value in any given exchange.

The crux of the problem is that today’s institutions define the markets in which we trade human and social capital in ways that make certain assumptions, and those assumptions are counterproductive relative to other assumptions that might be made. That is, the dominant form of economic discourse takes it for granted that markets are formed by the buying and selling activities of consumers and producers, which in turn dictates the form of institutions. But this gets the process backwards (Miller and O’Leary, 2007). Markets cannot form in the absence of institutions that define the roles, rules, and relationships embodied in economic exchange, as has been pointed out by Douglass North (1981, 1990), and a very large literature on institutional economics that has emerged from the work of North and his colleagues since the late 1970s.

And so, once again, this is why I keep repeating ad nauseum the same old lines in different ways. In this case, the repetition focuses on the institutions that “print” (so to speak) the currencies in which we express and trade economic and scientific values for mass or weight (kilograms and pounds), length (meters and yards), temperature (degrees Celsius and Fahrenheit), energy (kilowatts), etc. Economic growth and growth in scientific knowledge simultaneously erupted in the 19th century after metrological systems were created to inform trade in commodities and ideas. What we need today is a new investment of resources in the creation of a new array of standardized units for human, social, and natural capital. For more information, see prior posts in this blog, and the publications listed below.

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 [http://www.livingcapitalmetrics.com/images/WP_Fisher_Jr_2000.pdf].

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. (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. 118-53). Brookfield, VT: Ashgate Publishing Co.

Fisher, W. P., Jr. (2003). Measurement and communities of inquiry. Rasch Measurement Transactions, 17(3), 936-8 [http://www.rasch.org/rmt/rmt173.pdf].

Fisher, W. P., Jr. (2004, Thursday, January 22). Bringing capital to life via measurement: A contribution to the new economics. In  R. Smith (Chair), Session 3.3B. Rasch Models in Economics and Marketing. Second International Conference on Measurement in Health, Education, Psychology, and Marketing: Developments with Rasch Models, The International Laboratory for Measurement in the Social Sciences, School of Education, Murdoch University, Perth, Western Australia.

Fisher, W. P., Jr. (2004, Wednesday, January 21). Consequences of standardized technical effects for scientific advancement. In  A. Leplège (Chair), Session 2.5A. Rasch Models: History and Philosophy. Second International Conference on Measurement in Health, Education, Psychology, and Marketing: Developments with Rasch Models, The International Laboratory for Measurement in the Social Sciences, School of Education, Murdoch University, Perth, Western Australia.

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. (2004, Friday, July 2). Relational networks and trust in the measurement of social capital. Presented at the Twelfth International Objective Measurement Workshops, Cairns, Queensland, Australia: James Cook University.

Fisher, W. P., Jr. (2005). Daredevil barnstorming to the tipping point: New aspirations for the human sciences. Journal of Applied Measurement, 6(3), 173-179 [http://www.livingcapitalmetrics.com/images/FisherJAM05.pdf].

Fisher, W. P., Jr. (2005, August 1-3). Data standards for living human, social, and natural capital. In Session G: Concluding Discussion, Future Plans, Policy, etc. Conference on Entrepreneurship and Human Rights [http://www.fordham.edu/economics/vinod/ehr05.htm], Pope Auditorium, Lowenstein Bldg, Fordham University.

Fisher, W. P., Jr. (2006). Commercial measurement and academic research. Rasch Measurement Transactions, 20(2), 1058 [http://www.rasch.org/rmt/rmt202.pdf].

Fisher, W. P., Jr. (2007, Summer). Living capital metrics. Rasch Measurement Transactions, 21(1), 1092-3 [http://www.rasch.org/rmt/rmt211.pdf].

Fisher, W. P., Jr. (2007). Vanishing tricks and intellectualist condescension: Measurement, metrology, and the advancement of science. Rasch Measurement Transactions, 21(3), 1118-1121 [http://www.rasch.org/rmt/rmt213c.htm].

Fisher, W. P., Jr. (2008, 3-5 September). New metrological horizons: Invariant reference standards for instruments measuring human, social, and natural capital. Presented at the 12th IMEKO TC1-TC7 Joint Symposium on Man, Science, and Measurement, Annecy, France: University of Savoie.

Fisher, W. P., Jr. (2009, November 19). Draft legislation on development and adoption of an intangible assets metric system. Retrieved 6 January 2011, from https://livingcapitalmetrics.wordpress.com/2009/11/19/draft-legislation/.

Fisher, W. P., Jr. (2009, November). Invariance and traceability for measures of human, social, and natural capital: Theory and application. 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 (Tech. Rep. No. 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. (2011). Bringing human, social, and natural capital to life: Practical consequences and opportunities. Journal of Applied Measurement, 12(1), 49-66.

Fisher, W. P.. Jr. (2010, June 13-16). Rasch, Maxwell’s method of analogy, and the Chicago tradition. In  G. Cooper (Chair), Https://conference.cbs.dk/index.php/rasch/Rasch2010/paper/view/824. Probabilistic models for measurement in education, psychology, social science and health: Celebrating 50 years since the publication of Rasch’s Probabilistic Models.., University of Copenhagen School of Business, FUHU Conference Centre, Copenhagen, Denmark.

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), http://iopscience.iop.org/1742-6596/238/1/012016/pdf/1742-6596_238_1_012016.pdf.

Fisher, W. P., Jr. (2011). Stochastic and historical resonances of the unit in physics and psychometrics. Measurement: Interdisciplinary Research & Perspectives, 9, 46-50.

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

Fisher, W. P., Jr. (2012, May/June). What the world needs now: A bold plan for new standards. Standards Engineering, 64, in press.

Fisher, W. P., Jr., Eubanks, R. L., & Marier, R. L. (1997, May). Health status measurement standards for electronic data sharing: Can the MOS SF36 and the LSU HSI physical functioning scales be equated?. Presented at the American Medical Informatics Association, San Jose, California.

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, February). Rehabits: A common language of functional assessment. Archives of Physical Medicine and Rehabilitation, 76(2), 113-122.

Fisher, W. P., Jr., & Stenner, A. J. (2005, Tuesday, April 12). Creating a common market for the liberation of literacy capital. In  R. E. Schumacker (Chair), Rasch Measurement: Philosophical, Biological and Attitudinal Impacts. American Educational Research Association, Rasch Measurement SIG, Montreal, Canada.

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). Retrieved 25 October 2011, from 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.

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.

North, D. C. (1981). Structure and change in economic history. New York: W. W. Norton & Co.

North, D. C. (1990). Institutions, institutional change, and economic performance. New York: Cambridge University Press.

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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.

Question Authority: Queries In the Back of the Wall Street Demonstrators’ Minds

October 2, 2011

I think the Wall Street demonstrators’ lack of goals and the admission of not having a solution is very important. All solutions offered so far are band-aids at best, and most are likely to do more harm than good.

I think I have an innovative way of articulating the questions people have on their minds. I thought of scattering small pieces of paper anywhere there are these demonstrations going on, with questions like these on them:

Feeling robbed of the trust, loyalty, and commitment you invested?

Unable to get a good return on your investment in your education?

Feeling robbed of your share of the world’s natural resources?

How many shares of social capital do you own?

How many shares of literacy capital do you have on the market?

How many shares of health capital do you own?

How many shares of natural capital do you own?

Wishing there was an easy way to know what return rate you get on your health investments?

Wishing there was an easy way to know what return rate you get on your education investments?

Why don’t you have legal title to your literacy capital shares?

Why don’t you have legal title to your social capital shares?

Why don’t you have legal title to your health capital shares?

Why don’t you have legal title to your natural capital shares?

Why don’t you know how many literacy capital shares are rightfully yours?

Why don’t you know how many social capital shares are rightfully yours?

Why don’t you know how many health capital shares are rightfully yours?

Why don’t you know how many natural capital shares are rightfully yours?

Why is there no common currency for trading on your literacy capital?

Why is there no common currency for trading on your health capital?

Why is there no common currency for trading on your social capital?

Why is there no common currency for trading on your natural capital?

Why aren’t corporations accountable for their impacts on your literacy capital investments?

Why aren’t corporations accountable for their impacts on your natural capital investments?

Why aren’t corporations accountable for their impacts on your social capital investments?

Why aren’t corporations accountable for their impacts on your health capital investments?

Why aren’t governments accountable for their impacts on your literacy capital investments?

Why aren’t governments accountable for their impacts on your natural capital investments?

Why aren’t governments accountable for their impacts on your social capital investments?

Why aren’t governments accountable for their impacts on your health capital investments?

Why are educational outcomes not comparable in a common metric?

Why are health care outcomes not comparable in a common metric?

Why are social program outcomes not comparable in a common metric?

Why are natural resource management program outcomes not comparable in a common metric?

Why do accounting and economics focus on land, labor, and manufactured capital instead of putting the value of ecosystem services, and health, literacy, and social capital, on the books and in the models, along with property and manufactured capital?

If we truly do manage what we measure, why don’t we have a metric system for literacy capital?

Can we effectively manage literacy capital if we don’t have a universally recognized and accepted metric for it?

If we truly do manage what we measure, why don’t we have a metric system for health capital?

Can we effectively manage health capital if we don’t have a universally recognized and accepted metric for it?

If we truly do manage what we measure, why don’t we have a metric system for social capital?

Can we effectively manage social capital if we don’t have a universally recognized and accepted metric for it?

If we truly do manage what we measure, why don’t we have a metric system for natural capital?

Can we effectively manage natural capital if we don’t have a universally recognized and accepted metric for it?

How is our collective imagination being stifled by the lack of a common language for literacy capital?

How is our collective imagination being stifled by the lack of a common language for health capital?

How is our collective imagination being stifled by the lack of a common language for social capital?

How is our collective imagination being stifled by the lack of a common language for natural capital?

How can the voice of the people be heard without common languages for things that are important to us?

How do we know where we stand as individuals and as a society if we can’t track the value and volume of our literacy, health, social, and natural capital shares?

Why don’t NIST and NSF fund new research into literacy, health, social, and natural capital metrics?

Why aren’t banks required to offer literacy, health, social, and natural capital accounts?

If we want to harmonize relationships between people, within and between societies, and between culture and nature, why don’t we tune the instruments on which we play the music of our lives?

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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.

The Path to a New Consensus: A Practical Procedure for Resolving the Opposition Between Absolute and Relative Standards

August 26, 2011

The possibility of a new nonpartisan consensus on social and economic issues has been raised from time to time lately. I’ve had some ideas fermenting in this area for a while, and it seems like they might be ready for recording here. What I want to take up concerns one of the more contentious aspects of the cultural and political disputes of recent decades. There are important differences between those who want to impose one or another kind of moral or religious standard on society as a whole and those who contend that, within certain limits, such standards are arbitrary and must be determined by each individual or group according to its own values and sense of what makes a community.The oppositions here might seem to be irreconcilable, but is that actually true?

Resolving deep-seated disagreements on this scale requires that all parties accept some baseline rules of engagement. And herein lies the rub, eh? For even something as seemingly obvious and simple as defining factual truth has proven beyond the abilities of some highly skilled and deeply motivated negotiators. So, of course, those who adhere rigidly to preconceived notions automatically remove themselves from dialogue, and I cannot presume to address them here. But for those willing to entertain possibilities following from ideas and methods with which they may be unfamiliar, I say, read on.

What I want to propose differs in several fundamental respects from what has come before, and it is very similar in one fundamental respect. The similarity stems from the realization that essentially the same thing can be authoritatively stated at different times and place by different people using different words and different languages in relation to different customs and traditions. For instance, the versions of the Golden Rule given in the Gospels of Matthew or Luke are conceptually identical with the sentiment expressed in the Hindu Mahabarata, the Confucian Analects, the Jewish Talmud, the Muslim 13th Hadith, and the Buddhist Unada-Varga (http://www.thesynthesizer.org/golden.html; http://philosophy.tamu.edu/~gary/bioethics/ethicaltheory/universalizability.html).

So, rather than defining consensus in terms of strict agreement (with no uncertainty) on the absolute value of various propositions, it should be defined in terms of probabilities of consistent agreement (within a range of uncertainty) on the relative value of various propositions. Instead of evaluating isolated and decontextualized value statements one at a time, I propose evaluating value statements hypothesized to cohere with one another within a larger context together, as a unit.Instead of demanding complete data on a single set of propositions, I propose requiring and demonstrating that the same results be obtained across different sets of propositions addressing the same thing. Instead of applying statistical models of group level inter-variable relations to these data, I propose applying measurement models of individual level within-variable relations. Instead of setting policy on the basis of centrally controlled analytic results that vary incommensurably across data sets I propose setting policy on the basis of decentralized, distributed results collectively produced by networks of individuals whose behaviors and decisions are coordinated and aligned by calibrated instruments measuring in common commensurable units. All of these proposals are described in detail in previous posts here, and in the references included in those posts.

What I’m proposing is rooted in and extends existing practical solutions to the definition and implementation of standards. And though research across a number of fields suggests that a new degree of consensus on some basic issues seems quite possible, that consensus will not be universal and it should not be used as a basis for compelling conformity. Rather, the efficiencies that stand to be gained by capitalizing (literally) on existing but unrecognized standards of behavior and performance are of a magnitude that would easily support generous latitude in allowing poets, nonconformists, and political dissenters to opt out of the system at little or no cost to themselves or anyone else.

That is, as has been described and explained at length in previous posts here, should we succeed in establishing an Intangible Assets Metric System and associated genuine progress indicator or happiness index, we would be in the position of harnessing the power of the profit motive as an economic driver of growth in human, social, and natural capital. Instead of taking mere monetary profits as a measure of improved quality of life, we would set up economic systems in which the measurement and the management of quality of life determines monetary profits. The basic idea is that individual ownership of and accountability for what is, more than anything else, our rightful property–our own abilities, motivations, health, trustworthiness, loyalty, etc.–ought to be a significant factor in promoting the conservation and growth of these forms of capital.

In this context, what then might serve as a practical approach to resolving disputes between those who advocate standards and those who reject them, or between those who trust in our capacity to function satisfactorily as a society without standards and those who do not? Such an approach begins by recognizing the multitude of ways in which all of us rely on standards every day. We do not need to concern ourselves with the technical issues of electronics or manufacturing, though standards are essential here. We do not need even to take up the role of standards as guides to grocery or clothing store purchasing decisions or to planning meetings or travel across time zones.

All we need to think about is something as basic as communication. The alphabet, spelling, pronunciation, and grammatical rules, dictionaries, and educational curricula are all forms of standards that must be accepted, recognized and adhered to before the most basic communication can be achieved. The shapes of various letters or symbols, and the sounds associated with them, are all completely arbitrary. They are conventions that arose over centuries of usage that passed long before the rules were noted, codified, and written down. And spoken languages remain alive, changing in ways that break the rules and cause them to be rewritten, as when new words emerge, or previously incorrect constructions become accepted.

But what is the practical value for a new consensus in recognizing our broad acceptance of linguistic standards? Contrary to the expectations of l’Academie Francaise, for instance, we cannot simply make up new rules and expect people to follow them. No, the point of taking language as a key example goes deeper than that. We noted that usage precedes the formulation of rules, and so it must also be in finding our way to a basis for a new consensus. The question is, what are the lawful patterns by which we already structure behavior and decisions, patterns that might be codified in the language of a social science?

These patterns are being documented in research employing probabilistic measurement models. The fascinating thing about these patterns is that they often retain their characteristic features across different samples of people being measured, across time and space, and across different sets of questions on tests, surveys, or assessments designed to measure the same ability, behavior, attitude, or performance. The stability and constancy of these patterns are such that it appears possible to link all of the instruments measuring the same things to common units of measurement, so that everyone everywhere could think and act together in a common language.

And it is here, in linking instruments together in an Intangible Assets Metric System, that we arrive at a practical way of resolving some disputes between absolutists and relativists. Though we should and will take issue with his demand for certainty, Latour (2005, p. 228) asks the right question, saying,

“Standards and metrology solve practically the question of relativity that seems to intimidate so many people:
Can we obtain some sort of universal agreement? Of course we can! Provided you find a way to hook up your local instrument to one of the many metrological chains whose material network can be fully described, and whose cost can be fully determined. Provided there is also no interruption, no break, no gap, and no uncertainty along any point of the transmission. Indeed, traceability is precisely what the whole of metrology is about!”

Nowhere does Latour show any awareness of what has been accomplished in social research employing probabilistic measurement models, but he nonetheless grasps exactly how the results of that research will not realize its potential unless it is expanded into networks of interconnected instrumentation. He understands that his theory of networked actors coordinated via virtual threads of standardized forms, metrics, vocabularies describes how scientific metrology and standards set the benchmark for universal consensus. Latour stresses that the focus here is on concrete material practices that can be objectively observed and replicated. As he says, when those practices are understood, then you know how to “do the same operation for other less traceable, less materialized circulations” (p. 229).

Latour’s primary concerns are with the constitution of sociology as a science of the social, and with the understanding of the social as networks of actors whose interests are embodied in technical devices that mediate relationships. Throughout his work, he therefore focuses on the description of existing sociotechnical phenomena. Presumably because of his lack of familiarity with social measurement theory and practice, Latour does not speak to ways in which the social sciences could go beyond documenting less traceable and less materialized circulations to creating more traceable and more materialized circulations, ones capable of more closely emulating those found in the natural sciences.

Latour’s results suggest criteria that may show some disputes regarded as unresolvable to have unexplored potentials for negotiation. That potential depends, as Latour says, on calibrating instruments that can be hooked up in a metrological chain in an actual material network with known properties (forms, Internet connections and nodes, a defined unit of measurement with tolerable uncertainty, etc.) and known costs. In the same way that the time cannot be told from a clock disconnected from the chain of connections to the standard time, each individual instrument for measuring abilities, health, quality of life, etc. will also have to be connected to its standard via an unbroken chain.

But however intimidating these problems might be, they are far less imposing than the ignorance that prevents any framing of the relevant issues in the first place. Addressing the need for rigorous measurement in general, Rasch (1980, pp. xx) agreed that “this is a huge challenge, but once the problem has been formulated it does seem possible to meet it.” Naturally enough, the needed work will have to be done by those of us calibrating the instruments of education, health care, sociology, etc. Hence my ongoing involvement in IMEKO, the International Measurement Confederation (http://www.tu-ilmenau.de/fakmb/Home.2382.0.html).

References

Latour, B. (2005). Reassembling the social: An introduction to Actor-Network-Theory. Clarendon Lectures in Management Studies). Oxford, England: Oxford University Press.

Rasch, G. (1960). Probabilistic models for some intelligence and attainment tests (Reprint, with Foreword and Afterword by B. D. Wright, Chicago: University of Chicago Press, 1980). Copenhagen, Denmark: Danmarks Paedogogiske Institut.

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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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Debt, Revenue, and Changing the Way Washington Works: The Greatest Entrepreneurial Opportunity of Our Time

July 30, 2011

“Holding the line” on spending and taxes does not make for a fundamental transformation of the way Washington works. Simply doing less of one thing is just a small quantitative change that does nothing to build positive results or set a new direction. What we need is a qualitative metamorphosis akin to a caterpillar becoming a butterfly. In contrast with this beautiful image of natural processes, the arguments and so-called principles being invoked in the sham debate that’s going on are nothing more than fights over where to put deck chairs on the Titanic.

What sort of transformation is possible? What kind of a metamorphosis will start from who and where we are, but redefine us sustainably and responsibly? As I have repeatedly explained in this blog, my conference presentations, and my publications, with numerous citations of authoritative references, we already possess all of the elements of the transformation. We have only to organize and deploy them. Of course, discerning what the resources are and how to put them together is not obvious. And though I believe we will do what needs to be done when we are ready, it never hurts to prepare for that moment. So here’s another take on the situation.

Infrastructure that supports lean thinking is the name of the game. Lean thinking focuses on identifying and removing waste. Anything that consumes resources but does not contribute to the quality of the end product is waste. We have enormous amounts of wasteful inefficiency in many areas of our economy. These inefficiencies are concentrated in areas in which management is hobbled by low quality information, where we lack the infrastructure we need.

Providing and capitalizing on this infrastructure is The Greatest Entrepreneurial Opportunity of Our Time. Changing the way Washington (ha! I just typed “Wastington”!) works is the same thing as mitigating the sources of risk that caused the current economic situation. Making government behave more like a business requires making the human, social, and natural capital markets more efficient. Making those markets more efficient requires reducing the costs of transactions. Those costs are determined in large part by information quality, which is a function of measurement.

It is often said that the best way to reduce the size of government is to move the functions of government into the marketplace. But this proposal has never been associated with any sense of the infrastructural components needed to really make the idea work. Simply reducing government without an alternative way of performing its functions is irresponsible and destructive. And many of those who rail on and on about how bad or inefficient government is fail to recognize that the government is us. We get the government we deserve. The government we get follows directly from the kind of people we are. Government embodies our image of ourselves as a people. In the US, this is what having a representative form of government means. “We the people” participate in our society’s self-governance not just by voting, writing letters to congress, or demonstrating, but in the way we spend our money, where we choose to live, work, and go to school, and in every decision we make. No one can take a breath of air, a drink of water, or a bite of food without trusting everyone else to not carelessly or maliciously poison them. No one can buy anything or drive down the street without expecting others to behave in predictable ways that ensure order and safety.

But we don’t just trust blindly. We have systems in place to guard against those who would ruthlessly seek to gain at everyone else’s expense. And systems are the point. No individual person or firm, no matter how rich, could afford to set up and maintain the systems needed for checking and enforcing air, water, food, and workplace safety measures. Society as a whole invests in the infrastructure of measures created, maintained, and regulated by the government’s Department of Commerce and the National Institute for Standards and Technology (NIST). The moral importance and the economic value of measurement standards has been stressed historically over many millennia, from the Bible and the Quran to the Magna Carta and the French Revolution to the US Constitution. Uniform weights and measures are universally recognized and accepted as essential to fair trade.

So how is it that we nonetheless apparently expect individuals and local organizations like schools, businesses, and hospitals to measure and monitor students’ abilities; employees’ skills and engagement; patients’ health status, functioning, and quality of care; etc.? Why do we not demand common currencies for the exchange of value in human, social, and natural capital markets? Why don’t we as a society compel our representatives in government to institute the will of the people and create new standards for fair trade in education, health care, social services, and environmental management?

Measuring better is not just a local issue! It is a systemic issue! When measurement is objective and when we all think together in the common language of a shared metric (like hours, volts, inches or centimeters, ounces or grams, degrees Fahrenheit or Celsius, etc.), then and only then do we have the means we need to implement lean strategies and create new efficiencies systematically. We need an Intangible Assets Metric System.

The current recession in large part was caused by failures in measuring and managing trust, responsibility, loyalty, and commitment. Similar problems in measuring and managing human, social, and natural capital have led to endlessly spiraling costs in education, health care, social services, and environmental management. The problems we’re experiencing in these areas are intimately tied up with the way we formulate and implement group level decision making processes and policies based in statistics when what we need is to empower individuals with the tools and information they need to make their own decisions and policies. We will not and cannot metamorphose from caterpillar to butterfly until we create the infrastructure through which we each can take full ownership and control of our individual shares of the human, social, and natural capital stock that is rightfully ours.

We well know that we manage what we measure. What counts gets counted. Attention tends to be focused on what we’re accountable for. But–and this is vitally important–many of the numbers called measures do not provide the information we need for management. And not only are lots of numbers giving us low quality information, there are far too many of them! We could have better and more information from far fewer numbers.

Previous postings in this blog document the fact that we have the intellectual, political, scientific, and economic resources we need to measure and manage human, social, and natural capital for authentic wealth. And the issue is not a matter of marshaling the will. It is hard to imagine how there could be more demand for better management of intangible assets than there is right now. The problem in meeting that demand is a matter of imagining how to start the ball rolling. What configuration of investments and resources will start the process of bursting open the chrysalis? How will the demand for meaningful mediating instruments be met in a way that leads to the spreading of the butterfly’s wings? It is an exciting time to be alive.

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A Framework for Competitive Advantage in Managing Intangible Assets

July 26, 2011

It has long been recognized that externalities like social costs could be brought into the market should ways of measuring them objectively be devised. Markets, however, do not emerge spontaneously from the mere desire to be able to buy and sell; they are, rather, the products of actors and agencies that define the rules, roles, and relationships within which transaction costs are reduced and from which value, profits, and authentic wealth may be extracted. Objective measurement is necessary to reduced transaction costs but is by itself insufficient to the making of markets. Thus, markets for intangible assets, such as human, social, and natural capital, remain inefficient and undeveloped even though scientific theories, models, methods, and results demonstrating their objective measurability have been available for over 80 years.

Why has the science of objectively measured intangible assets not yet led to efficient markets for those assets? The crux of the problem, the pivot point at which an economic Archimedes could move the world of business, has to do with verifiable trust. It may seem like stating the obvious, but there is much to be learned from recognizing that shared narratives of past performance and a shared vision of the future are essential to the atmosphere of trust and verifiability needed for the making of markets. The key factor is the level of detail reliably tapped by such narratives.

For instance, some markets seem to have the weight of an immovable mass when the dominant narrative describes a static past and future with no clearly defined trajectory of leverageable development. But when a path of increasing technical capacity or precision over time can be articulated, entrepreneurs have the time frames they need to be able to coordinate, align, and manage budgeting decisions vis a vis investments, suppliers, manufacturers, marketing, sales, and customers. For example, the building out of the infrastructure of highways, electrical power, and water and sewer services assured manufacturers of automobiles, appliances, and homes that they could develop products for which there would be ready customers. Similarly, the mapping out of a path of steady increases in technical precision at no additional cost in Moore’s Law has been a key factor enabling the microprocessor industry’s ongoing history of success.

Of course, as has been the theme of this blog since day one, similar paths for the development of new infrastructural capacities could be vital factors for making new markets for human, social, and natural capital. I’ll be speaking on this topic at the forthcoming IMEKO meeting in Jena, Germany, August 31 to September 2. Watch this spot for more on this theme in the near future.

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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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Translating Gingrich’s Astute Observations on Health Care

June 30, 2011

“At the very heart of transforming health and healthcare is one simple fact: it will require a commitment by the federal government to invest in science and discovery. The period between investment and profit for basic research is too long for most companies to ever consider making the investment. Furthermore, truly basic research often produces new knowledge that everyone can use, so there is no advantage to a particular company to make the investment. The result is that truly fundamental research is almost always a function of government and foundations because the marketplace discourages focusing research in that direction” (p. 169 in Gingrich, 2003).

Gingrich says this while recognizing (p. 185) that:

“Money needs to be available for highly innovative ‘out of the box’ science. Peer review is ultimately a culturally conservative and risk-averse model. Each institution’s director should have a small amount of discretionary money, possibly 3% to 5% of their budget, to spend on outliers.”

He continues (p. 170), with some important elaborations on the theme:

“America’s economic future is a direct function of our ability to take new scientific research and translate it into entrepreneurial development.”

“The [Hart/Rudman] Commission’s second conclusion was that the failure to invest in scientific research and the failure to reform math and science education was the second largest threat to American security [behind terrorism].”

“Our goal [in the Hart/Rudman Commission] was to communicate the centrality of the scientific endeavor to American life and the depth of crisis we believe threatens the math and science education system. The United States’ ability to lead today is a function of past investments in scientific research and math and science education. There is no reason today to believe we will automatically maintain that lead especially given our current investments in scientific research and the staggering levels of our failures in math and science education.”

“Our ability to lead in 2025 will be a function of current decisions. Increasing our investment in science and discovery is a sound and responsible national security policy. No other federal expenditure will do more to create jobs, grow wealth, strengthen our world leadership, protect our environment, promote better education, or ensure better health for the country. We must make this increase now.”

On p. 171, this essential point is made:

“In health and healthcare, it is particularly important to increase our investment in research.”

This is all good. I agree completely. What NG says is probably more true than he realizes, in four ways.

First, the scientific capital created via metrology, controlled via theory, and embodied in technological instruments is the fundamental driver of any economy. The returns on investments in metrological improvements range from 40% to over 400% (NIST, 1996). We usually think of technology and technical standards in terms of computers, telecommunications, and electronics, but there actually is not anything at all in our lives untouched by metrology, since the air, water, food, clothing, roads, buildings, cars, appliances, etc. are all monitored, maintained, and/or manufactured relative to various kinds of universally uniform standards. NG is, as most people are, completely unaware that such standards are feasible and already under development for health, functionality, quality of life, quality of care, math and science education, etc. Given the huge ROIs associated with metrological improvements, there ought to be proportionately huge investments being made in metrology for human, social, and natural capital.

Second, NG’s point concerning national security is right on the mark, though for reasons that go beyond the ones he gives. There are very good reasons for thinking investments in, and meaningful returns from, the basic science for human, social, and natural capital metrology could be expected to undercut the motivations for terrorism and the retreats into fundamentalisms of various kinds that emerge in the face of the failures of liberal democracy (Marty, 2001). Making all forms of capital measured, managed, and accountable within a common framework accessible to everyone everywhere could be an important contributing factor, emulating the property titling rationale of DeSoto (1989, 2000) and the support for distributed cognition at the social level provided by metrological networks (Latour, 1987, 2005; Magnus, 2007), The costs of measurement can be so high as to stifle whole economies (Barzel, 1982), which is, broadly speaking, the primary problem with the economies of education, health care, social services, philanthropy, and environmental management (see, for instance, regarding philanthropy, Goldberg, 2009). Building the legal and financial infrastructure for low-friction titling and property exchange has become a basic feature of World Bank and IMF projects. My point, ever since I read De Soto, has been that we ought to be doing the same thing for human, social, and natural capital, facilitating explicit ownership of the skills, motivations, health, trust, and environmental resources that are rightfully the property of each of us, and that similar effects on national security ought to follow.

Third, NG makes an excellent point when he stresses the need for health and healthcare to be individual-centered, saying that, in contrast with the 20th-century healthcare system, “In the 21st Century System of Health and Healthcare, you will own your medical record, control your healthcare dollars, and be able to make informed choices about healthcare providers.” This is basically equivalent to saying that health capital needs to be fungible, and it can’t be fungible, of course, without a metrological infrastructure that makes every measure of outcomes, quality of life, etc. traceable to a reference standard. Individual-centeredness is also, of course, what distinguishes proper measurement from statistics. Measurement supports inductive inference, from the individual to the population, where statistics are deductive, going from the population to the individual (Fisher & Burton, 2010; Fisher, 2010). Individual-centered healthcare will never go anywhere without properly calibrated instrumentation and the traceability to reference standards that makes measures meaningful.

Fourth, NG repeatedly indicates how appalled he is at the slow pace of change in healthcare, citing research showing that it can take up to 17 years for doctors to adopt new procedures. I contend that this is an effect of our micromanagement of dead, concrete forms of capital. In a fluid living capital market, not only will consumers be able to reward quality in their purchasing decisions by having the information they need when they need it and in a form they can understand, but the quality improvements will be driven from the provider side in much the same way. As Brent James has shown, readily available, meaningful, and comparable information on natural variation in outcomes makes it much easier for providers to improve results and reduce the variation in them. Despite its central importance and the many years that have passed, however, the state of measurement in health care remains in dire need of dramatic improvement. Fryback (1993, p. 271; also see Kindig, 1999) succinctly put the point, observing that the U.S.

“health care industry is a $900 + billion [over $2.5 trillion in 2009 (CMS, 2011] endeavor that does not know how to measure its main product: health. Without a good measure of output we cannot truly optimize efficiency across the many different demands on resources.”

Quantification in health care is almost universally approached using methods inadequate to the task, resulting in ordinal and scale-dependent scores that cannot take advantage of the objective comparisons provided by invariant, individual-level measures (Andrich, 2004). Though data-based statistical studies informing policy have their place, virtually no effort or resources have been invested in developing individual-level instruments traceable to universally uniform metrics that define the outcome products of health care. These metrics are key to efficiently harmonizing quality improvement, diagnostic, and purchasing decisions and behaviors in the manner described by Berwick, James, and Coye (2003) without having to cumbersomely communicate the concrete particulars of locally-dependent scores (Heinemann, Fisher, & Gershon, 2006). Metrologically-based common product definitions will finally make it possible for quality improvement experts to implement analogues of the Toyota Production System in healthcare, long presented as a model but never approached in practice (Coye, 2001).

So, what does all of this add up to? A new division for human, social, and natural capital in NIST is in order, with extensive involvement from NIH, CMS, AHRQ, and other relevant agencies. Innovative measurement methods and standards are the “out of the box” science NG refers to. Providing these tools is the definitive embodiment of an appropriate role for government. These are the kinds of things that we could have a productive conversation with NG about, it seems to me….

References

 Andrich, D. (2004, January). Controversy and the Rasch model: A characteristic of incompatible paradigms? Medical Care, 42(1), I-7–I-16.

Barzel, Y. (1982). Measurement costs and the organization of markets. Journal of Law and Economics, 25, 27-48.

Berwick, D. M., James, B., & Coye, M. J. (2003, January). Connections between quality measurement and improvement. Medical Care, 41(1 (Suppl)), I30-38.

Centers for Medicare and Medicaid Services. (2011). National health expenditure data: NHE fact sheet. Retrieved 30 June 2011, from https://www.cms.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp.

Coye, M. J. (2001, November/December). No Toyotas in health care: Why medical care has not evolved to meet patients’ needs. Health Affairs, 20(6), 44-56.

De Soto, H. (1989). The other path: The economic answer to terrorism. New York: Basic Books.

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

Fisher, W. P., Jr. (2010). Statistics and measurement: Clarifying the differences. Rasch Measurement Transactions, 23(4), 1229-1230 [http://www.rasch.org/rmt/rmt234.pdf].

Fisher, W. P., Jr., & Burton, E. (2010). Embedding measurement within existing computerized data systems: Scaling clinical laboratory and medical records heart failure data to predict ICU admission. Journal of Applied Measurement, 11(2), 271-287.

Fryback, D. (1993). QALYs, HYEs, and the loss of innocence. Medical Decision Making, 13(4), 271-2.

Gingrich, N. (2008). Real change: From the world that fails to the world that works. Washington, DC: Regnery Publishing.

Goldberg, S. H. (2009). Billions of drops in millions of buckets: Why philanthropy doesn’t advance social progress. New York: Wiley.

Heinemann, A. W., Fisher, W. P., Jr., & Gershon, R. (2006). Improving health care quality with outcomes management. Journal of Prosthetics and Orthotics, 18(1), 46-50 [http://www.oandp.org/jpo/library/2006_01S_046.asp].

Kindig, D. A. (1997). Purchasing population health. Ann Arbor, Michigan: University of Michigan Press.

Kindig, D. A. (1999). Purchasing population health: Aligning financial incentives to improve health outcomes. Nursing Outlook, 47, 15-22.

Latour, B. (1987). Science in action: How to follow scientists and engineers through society. New York: Cambridge University Press.

Latour, B. (2005). Reassembling the social: An introduction to Actor-Network-Theory. (Clarendon Lectures in Management Studies). Oxford, England: Oxford University Press.

Magnus, P. D. (2007). Distributed cognition and the task of science. Social Studies of Science, 37(2), 297-310.

Marty, M. (2001). Why the talk of spirituality today? Some partial answers. Second Opinion, 6, 53-64.

Marty, M., & Appleby, R. S. (Eds.). (1993). Fundamentalisms and society: Reclaiming the sciences, the family, and education. The fundamentalisms project, vol. 2. Chicago: University of Chicago Press.

National Institute for Standards and Technology. (1996). Appendix C: Assessment examples. Economic impacts of research in metrology. In Committee on Fundamental Science, Subcommittee on Research (Ed.), Assessing fundamental science: A report from the Subcommittee on Research, Committee on Fundamental Science. Washington, DC: National Standards and Technology Council

[http://www.nsf.gov/statistics/ostp/assess/nstcafsk.htm#Topic%207; last accessed 30 June 2011].

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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.

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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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