Posts Tagged ‘harmonization’

New Ideas on How to Realize the Purpose of Capital

September 20, 2018

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Creatively Expressing How Love Matters for Justice: Setting the Stage and Tuning the Instruments

April 16, 2014

Nussbaum (2013) argues about the political importance of connecting with our bodies without shame and disgust, and of the relevance musical and poetic public expressions of varieties of love offer to conceptions of justice. Institutions embodying principles of loving justice require media integrating emotional expression with technical calculation, in exactly the same way music does. Being able to dance at the revolution demands instruments tuned to shared scales, no matter if equal temperament, just intonation, meantone tuning, or any of a variety of other well, or irregular, temperaments are chosen.

The physicality of dancing, so often evoking romance and courtship, provides a point of entry to a metaphoric logic of reproduction applicable to the Socratic midwifery of ideas and to the products of social intercourse. Tuning the instruments of the human, social, and environmental arts and sciences to harmonize and choreograph relationships may then enable formulation of nonreductionist approaches to the problem of how to reconcile political emotions with physical or geometrical accounts of the scales of justice.

Historical accounts of (musical, medical, electrical, etc.) metrological standards describe ways in which passionate concern for shared vulnerabilities and common joys have sometimes succeeded in deploying systems realizing higher forms of just relations (Alder, 2002; Berg and Timmermans, 2000;  Isacoff, 2001; Schaffer, 1992). The question of the day is whether we will succeed in creating yet new forms of such relations in the many areas of life where they are needed.

Yes, as Nussbaum (2013, p. 396) admits, the demand for love is a tall order, and unrealistic. But all heuristic fictions, from Pythagorean triangles to the mathematical pendulum, are unrealistic and are never actually observed in practice, as has been pointed out by a number of historians and philosophers (Butterfield 1957, pp. 16-17; Heidegger, 1967, p. 89; Rasch, 1960, pp. 37-38, 1973/2011). These fictions are, however, eminently useful as guides, goals, and as coherent ways of telling our stories, and that is the criterion by which they should be judged.

 

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

Berg, M., & Timmermans, S. (2000). Order and their others: On the constitution of universalities in medical work. Configurations, 8(1), 31-61.

Butterfield, H. (1957). The origins of modern science (revised edition). New York: The Free Press.

Heidegger, M. (1967). What is a thing? (W. B. Barton, Jr. & V. Deutsch, Trans.). South Bend, Indiana: Regnery/Gateway.

Isacoff, S. M. (2001). Temperament: The idea that solved music’s greatest riddle. New York: Alfred A. Knopf.

Nussbaum, M. (2013). Political emotions: Why love matters for justice. Cambridge, MA: The Belknap Press of Harvard 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.)

Rasch, G. (1973/2011, Spring). All statistical models are wrong! Comments on a paper presented by Per Martin-Löf, at the Conference on Foundational Questions in Statistical Inference, Aarhus, Denmark, May 7-12, 1973. Rasch Measurement Transactions, 24(4), 1309 [http://www.rasch.org/rmt/rmt244.pdf].

Schaffer, S. (1992). Late Victorian metrology and its instrumentation: A manufactory of Ohms. In R. Bud & S. E. Cozzens (Eds.), Invisible connections: Instruments, institutions, and science (pp. 23-56). Bellingham, WA: SPIE Optical Engineering Press.