Imagination, Intellect, and Envisioning New Horizons

Imagination is more important than intellect, but if intellect does not provide the needed logical structures, imaginative capacities are overly constrained. The problems we face today cannot be solved with the same kind of thinking that created them, but clarity on what counts as a new kind of thinking is sorely lacking. My work articulates a developmental sequence of increasingly complex logical types distinguishing qualitatively different kinds of thinking within which imaginative new possibilities for life can be conceived, gestated, midwifed, and nurtured.

 Personal Statement

1. My research focuses on theory and methods related to the quality of measurement information and communication. Peer reviewed publications and research products with which I have been involved span the full range from theoretical and philosophical to experimental and practical studies. I have worked in substantive research across education and health care, from clinical laboratory studies of low vision, heart failure, and diabetes to patient-reported outcomes, to parent and employee surveys, to learning progressions in reading and mathematics education, and in innovative studies of mindfulness practice, metaphor, and pastoral care. I am as informed and well-versed in hands-on research and instrument design, calibration, and psychometric data analysis as I am in philosophy and the history of science.
2. A primary focus of my work is on demonstrating a basis for reference standard units of measurement for instruments calibrated from ordinal observations. Contrary to popular belief, different instruments intended to measure the same thing often can be meaningfully and usefully equated to a shared quantitative scale, and could be made traceable to a new class of technical standards. Science is very much about the accumulation of knowledge, but relating new knowledge to old is unnecessarily complex and inefficient when instrument quality varies in unknown and uncontrolled ways, and when even high quality information is expressed in incommensurable units. A key issue concerns the ways in which qualitative idiosyncratic individual-level data are contextualized, not homogenized, by quantitative scales.
3. A number of colleagues in psychometrics have followed my lead in initiating a dialogue with metrology engineers and physicists around the value for education and health care research and practice that could be created if more effort was invested in instrument traceability to unit standards. To this end, I have participated in every (eight) International Measurement Confederation (IMEKO) Joint Symposium since 2008, as well as in the 2015 and 2018 IMEKO World Congresses, and in the 2017 and 2019 International Metrology Congresses in Paris. I have facilitated a significant degree of psychometrician involvement in these conferences since 2009, and co-hosted with Mark Wilson an IMEKO Joint Symposium at the University of California, Berkeley, in August, 2016 featuring nearly equal numbers of psychometric and metrology participants. At the 2018 IMEKO World Congress in Belfast, Mark Wilson and I organized the first ever special session focused on psychometric metrology.
4. My current efforts focus on how to make sustainable development economically self-sustaining, in the sense of using metrologically traceable instruments measuring human, social, and natural capital to lower market transaction costs conceived as matters of value for life in multilevel ecosystems. Making what works measureable in this way is the means by which effective innovations can be scaled up to viral contagions of communicable caring. The challenges in this work are truly huge, as efficient markets require not only significant investments in a new science but also in the creation of the new rules, roles, and responsibilities associated with legal ownership, quality assurance, regulatory, management, clinical, educational, and accounting standards for, shares in the stocks of these intangible assets. The daunting magnitude of the challenges is complemented by the urgency of the need to act, by the historic precedents framing the effectiveness of the relevant models and methods, and by the beauty, ethics, and human values that inspire and motivate diligent and energetic mobilization.

 

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.

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

[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.

Gadamer, H.-G. (1980). Dialogue and dialectic: Eight hermeneutical studies on Plato (P. C. Smith, Trans.). New Haven: Yale University Press.

Gari, S. R., Newton, A., Icely, J. D., & Delgado-Serrano, M. D. M. (2017). An analysis of the global applicability of Ostrom’s design principles to diagnose the functionality of common-pool resource institutions. Sustainability, 9(7), 1287.

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Hamilton, A. (. (1788, 1 January). Concerning the general power of taxation (continued). The New York Packet. (Rpt. in J. E. Cooke, (Ed.). (1961). The Federalist (Hamilton, Alexander; Madison, James; Jay, John). (pp. No. 31, 193-198). Middletown, Conn: Wesleyan University Press.

Lunz, M. E., Bergstrom, B. A., & Gershon, R. C. (1994). Computer adaptive testing. International Journal of Educational Research, 21(6), 623-634.

Ostrom, E. (2015). Governing the commons: The evolution of institutions for collective action. Cambridge, UK: Cambridge University Press (Original work published 1990).

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

Penuel, W. R. (2015, 22 September). Infrastructuring as a practice for promoting transformation and equity in design-based implementation research. In Keynote. International Society for Design and Development in Education (ISDDE) 2015 Conference, Boulder, CO. Retrieved from http://learndbir.org/resources/ISDDE-Keynote-091815.pdf

Platt, J. R. (1966). The step to man. New York: John Wiley & Sons.

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.

Ricoeur, P. (1966). The project of a social ethic. In D. Stewart & J. Bien, (Eds.). (1974). Political and social essays (pp. 160-175). Athens, Ohio: Ohio University Press.

Ricoeur, P. (1970). Freud and philosophy: An essay on interpretation. Evanston, IL: Northwestern University Press.

Ricoeur, P. (1974). Violence and language. In D. Stewart & J. Bien (Eds.), Political and social essays by Paul Ricoeur (pp. 88-101). Athens, Ohio: Ohio University Press.

Ricoeur, P. (1977). The rule of metaphor: Multi-disciplinary studies of the creation of meaning in language (R. Czerny, Trans.). Toronto: University of Toronto Press.

Star, S. L., & Ruhleder, K. (1996, March). Steps toward an ecology of infrastructure: Design and access for large information spaces. Information Systems Research, 7(1), 111-134.

Wilson, M. (2005). Constructing measures: An item response modeling approach. Mahwah, New Jersey: Lawrence Erlbaum Associates.

Wright, B. D. (1958, 7). On behalf of a personal approach to learning. The Elementary School Journal, 58, 365-375. (Rpt. in M. Wilson & W. P. Fisher, Jr., (Eds.). (2017). Psychological and social measurement: The career and contributions of Benjamin D. Wright (pp. 221-232). New York: Springer Nature.)

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.

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.

Differences between today’s sustainability metrics and the ones needed for low cost social value transactions and efficient markets for intangible assets

Measurement is such a confusing topic! Everyone proclaims how important it is, but almost no one ever seeks out and implements the state of the art, despite the enormous advantages to be gained from doing so.

A key metric quality issue concerns the cumbersome and uninterpretable masses of data that well-intentioned people can hobble themselves with when they are interested in improving their business processes and outcomes. They focus on what they can easily count, and then they wrongly (at great but unrecognized cost) misinterpret the counts and percentages as measures.

For instance, today’s sustainability and social value indicators are each expressed in a different unit (dollars, hours, tons, joules, kilowatt hours, survey ratings, category percentages, etc.; see below for a sample list). Some of them may indeed be scientific measures of that individual aspect of the business. The problem is they are all being interpreted in an undefined and chaotic aggregate as a measure of something else (social value, sustainability, etc.). Technically speaking, if we want a scientific measure of that higher order construct, we need to model it, estimate it, calibrate it, and deploy it as a common language in a network of instruments all traceable to a common unit standard.

All of this is strictly parallel with what we do to make markets in bushels of corn, barrels of oil, and kilowatts of electricity. We don’t buy produce by count in the grocery store because unscrupulous merchants would charge the same amount for small fruits as for large. All of the scales in grocery store produce markets measure in the same unit, and all of the packages of food are similarly marked in standard units of weight and volume so we can compare prices and value.

There are a lot of advantages to taking the trouble to extend this system to social value. I suppose every one of these points could be a chapter in a book:

• First, investing in scientific measurement reduces data volume to a tiny fraction of what we start with, not only with no loss of information but with the introduction of additional information telling us how confident we can be in the data and exactly what the data specifically mean (see below). That is, all the original information is recoverable from the calibrated measure, which is also qualified with an uncertainty range and a consistency statistic. Inconsistencies can be readily identified and acted on at individual levels.
• Now the numbers represent something that adds up the way they do, instead of standing for the unknown, differing, and uncontrolled units used in the original counts and percentages.
• We can take missing data into account, which means we can adapt the indicators used in different situations to specific circumstances without compromising comparability.
• We know how to gauge the dependability of the data better, meaning that we will not be over-confident about unreliable data, and we won’t waste our time and resources obtaining data of greater precision than we actually need.
• Furthermore, the indicators themselves are now scaled into a hierarchy that maps the continuum from low to high performance. This map points the way to improvement. The order of things on the scale shows what comes first and how more complex and difficult goals build on simpler and easier ones. The position of a measure on the scale shows what’s been accomplished, what remains to be done, and what to do next.
• Finally, we have a single metric we can use to price value across the local particulars of individual providers. This is where it becomes possible to see who gives the most bang for the buck, to reward them, to scale up an expanded market for the product, and to monetize returns on investment.

The revolutionary network effects of efficient markets are produced by the common currencies for the exchange of value that emerge out of this context. Improvements rebalancing cost and quality foster deflationary economies that drive more profit from lower costs (think Moore’s law). We gain the efficiency of dramatic reductions in data volume, and the meaningfulness of numbers that stand for something substantively real in the world that we can act on. These combine to lower the cost of transactions, as it now becomes vastly less expensive to find out how much of the social good is available, and what quality it is. Instead of dozens or hundreds of indicators repeated for each company in an industry, and repeated for each division in each company, and all of these repeated for each year or quarter, we have access to all of that information properly contextualized in a succinct, meaningful, and interpretable format for different applications at individual, organizational, industry-wide, national, regional, or global levels of complexity.

That’s likely way too much to digest at once! But it seemed worth saying it all at once in one place, in case anyone might be motivated to get in touch or start efforts in this direction on their own.

Examples of the variety of units in a handy sustainability metrics spreadsheet can be found at the Hess web site (http://www.hess.com/sustainability/performance-data/key-sustainability-metrics): freshwater use in millions or thousands of cubic meters, solid waste and carbon emissions in thousands of tons, natural gas consumption in thousands of gigajoules, electricity consumption in thousands of kilowatt hours; employee union members, layoffs, and turnover as percentages; employee lost time incident rates in hundreds of thousands of hours worked, percentages of female or minority board members, dollars for business performance.

These indicators are chosen with good reasons for use within each specific area of interest. They comprise an intuitive observation model that has face validity. But this is only the start of the work that needs to be done to create the metrics we need if we are to radically multiply the efficiency of social value markets. For an example of how to work from today’s diverse arrays of social value indicators (where each one is presented in its own spreadsheet) toward more meaningful, adaptable, and precise measures, see:

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

An Entrepreneurial Investment Model Alternative to Picketty’s Taxation Approach to Eliminating Wealth Disparities

Is taxation the only or the best solution to inequality? The way discussions of wealth disparities inevitably focus on variations in how, whom or what to tax, it is easy to assume there are no viable alternatives to taxation. But if the point is to invest in those with the most potential for making significant gains in productivity, so as to maximize the returns we realize, do we not wrongly constrain the domain of possible solutions when we misconceive an entrepreneurial problem in welfare terms?

Why can’t we require minimum levels of investment in social capital stocks and bonds offered by schools, hospitals, NGOs, etc? In human capital instruments offered by individuals? Why should not we expect those investments to be used to create new value? What supposed law of nature says it is impossible to associate new human, social and environmental value with stable and meaningful prices? And if there is such a law (such as Kenneth Arrow (1963) proposed), how can we break it? Why can’t we reconceive human and social capital stocks and flows in new ways?

There is one very good reason why we cannot now make such requirements, and it is the same reason why liberals (including me) had better become accustomed to accepting the failure of their agenda. That reason is this: social and environmental externalities. Inequality is inevitable only as long as we do not change the ways we deal with externalities. They can no longer be measured and managed in the same ways. They must be put on the books, brought into the models, measured scientifically, and traded in efficient markets. We have to invent accountability and accounting systems that harness the energy of the profit motive for the greater good—that actually grow authentic wealth and not mere money—and we have to do this far more effectively than has ever been done before.

It’s a tall order. But there are resources available to us that have not yet been introduced into the larger conversation. There are options to consider that need close study and creative experimentation. Proceeding toward the twin futilities of premature despair or unrealistic taxation will only set up another round of self-fulfilling prophecies inexorably grinding to yet another unforeseen but fully foretold disaster. Conversations about how to shape the roles, rules and institutions that make markets what they are (Miller and O’Leary, 2007) need to take place for human, social, and natural capital (Fisher and Stenner, 2011b). Indeed, those conversations are already well underway, as can be seen in the prior entries in this blog and in the sources listed below.

Arrow, K. J. (1963). Uncertainty and the welfare economics of medical care. American Economic Review, 53, 941-973.

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

Fisher, W. P., Jr. (2009b). NIST Critical national need idea White Paper: Metrological infrastructure for human, social, and natural capital (http://www.nist.gov/tip/wp/pswp/upload/202_metrological_infrastructure_for_human_social_natural.pdf). Washington, DC: National Institute for Standards and Technology (11 pages).

Fisher, W. P., Jr. (2010a, 22 November). Meaningfulness, measurement, value seeking, and the corporate objective function: An introduction to new possibilities. Sausalito, California: LivingCapitalMetrics.com (http://ssrn.com/abstract=1713467).

Fisher, W. P. J. (2010b). Measurement, reduced transaction costs, and the ethics of efficient markets for human, social, and natural capital (http://ssrn.com/abstract=2340674). Bridge to Business Postdoctoral Certification, Freeman School of Business: Tulane University.

Fisher, W. P., Jr. (2010c, June 13-16). Rasch, Maxwell’s method of analogy, and the Chicago tradition. In G. Cooper (Ed.), 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. FUHU Conference Centre, Copenhagen, Denmark: University of Copenhagen School of Business.

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

Fisher, W. P., Jr. (2011b, Thursday, September 1). Measurement, metrology and the coordination of sociotechnical networks. In S. Bercea (Ed.), New Education and Training Methods. International Measurement Confederation (IMEKO). Jena, Germany: http://www.db-thueringen.de/servlets/DerivateServlet/Derivate-24491/ilm1-2011imeko-017.pdf.

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

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

Fisher, W. P., Jr., & Stenner, A. J. (2011a, January). Metrology for the social, behavioral, and economic sciences. http://www.nsf.gov/sbe/sbe_2020/submission_detail.cfm?upld_id=36.

Fisher, W. P., Jr., & Stenner, A. J. (2011b, 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. Jena, Germany: http://www.db-thueringen.de/servlets/DerivateServlet/Derivate-24493/ilm1-2011imeko-018.pdf.

Fisher, W. P., Jr., & Stenner, A. J. (2013a). 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. (2013b). Overcoming the invisibility of metrology: A reading measurement network for education and the social sciences. Journal of Physics: Conference Series, 459(012024), http://iopscience.iop.org/1742-6596/459/1/012024.

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.

Common Languages and Shared Vulnerability

A recent partner in conversation insisted that sometimes it just is not possible to arrive at a common language, and that it would never be possible for her to agree with those who hold out for that possibility. In the same conversation, we heard from another participant about the work of peace building in areas of the world that have suffered brutal crimes inflicted by neighbors on neighbors. The realization that there are people overcoming and learning to live with the most horrible pain considerably tempered our exchange.

I think we came to see that it is one thing to agree to disagree about something inconsequential, or even about something that leads to very different opportunities and challenges. But mutual understanding hinges on a shared language. To give up on it is to give up on the possibility of fully inclusive community. It is to give up hope for a future in which healing can happen, in which there are no permanent divisions.

Keeping the conversation going, keeping the dialogue open, changing the rules as we go along to keep the game in play: if there are any principles that should never be compromised, these are among my candidates. Our shared human vulnerability is incontrovertibly at issue most pointedly precisely at the moment when one says we will never agree on the possibility of a common language. This is exactly the time and the place when it starts to be OK to begin a process of delegitimizing and dehumanizing someone else. When there is no hope of a common language, the first step toward rationalizing ignorance, prejudice, misunderstanding, demonization, and scapegoating has been taken.

A shared language is not a prison or a smothering demand for conformity. For one thing, the refusal to hold out for the possibility of a common language is already stated in a common language. Saying “we will never agree” is an instance of what Ricoeur (1967/1974) calls the “violence of the premature conclusion.” The internal contradiction of using a common language to say that we cannot hope for one is the mirror image of the person who argues for violence. Arguing is already a step into a language others can understand, implying a choice in favor of meaning over violence. The fundamental ethical and philosophical human choice takes place right here, in the desire for meaning and, as Habermas (1995, p. 199) puts it, in considerateness for a shared vulnerability. Accordingly, Ricoeur (1967/1974, p. 88) asserts,

The importance of this subject derives from the fact that the confrontation of violence with language underlies all of the problems which we can pose concerning man. This is precisely what overwhelms us. Their encounter occupies such a vast field because violence and language each occupy the totality of the human field.

The process of working out shared meanings in a common language is not a prison sentence, however. Including opportunities and concepts for critical engagement and deconstructive rethinking provide a way to prevent common languages from being overly confining. The Socratic midwife comforting the afflicted is complemented by the Socratic gadfly afflicting the comfortable (Bernasconi, 1989; Risser, 1989).

Heidegger (1982, pp. 19-23, 320-330; Fisher, 2010; Fisher and Stenner, 2011) accordingly describes the ontological (or phenomenological) method in terms of three moments: reduction, application, and deconstruction. Putting things in words is inherently reductive. There are infinities of ways of representing any experience in words, but even the most poetic among us has to choose the words that work to serve the purpose. And we may come to see on repeated application that our purposes are compromised by ambiguities that threaten to enact the violence of premature conclusions. Attentive concern for implicit meanings may lead to ways of discerning new distinctions and new conceptualizations, leading to new reductions and new applications. Languages are living and changing all the time. New sensitivities emerge and come into words by general consensus.

Ironically, being caught up in the desire for meaning can lead to the closing off of opportunities for creating meaningful relationships. Parsing differences into ever more local distinctions and separate historical and cultural dependencies can lead to a feeling that the barriers between positions are insurmountable. This way of arriving at premature conclusions has been especially prevalent among critical theorists who focused so exclusively on the deconstructive moment in the ontological method that they forgot that their writing inherently put a new reduction into play.

For instance, Delandshire and Petrosky (1994, p. 16) proclaimed that one of the ways their “post-structuralist view of knowledge is incompatible with the necessities of measurement is that interpretations are not assumed to be consistent or similar across time, contexts, or individuals.” The extremes in this display of hubris were called out by a number of observers. Bloom (1987, p. 387), for instance, held that deconstruction “is the last, predictable, stage in the suppression of reason and the denial of the possibility of truth in the name of philosophy.”

In contrast with these opposite extremes, others have kept their critical perspective in close contact with philosophical principles. Gasche (1987, p. 5) offers a “determination of deconstruction” within which “the latter’s indebtedness to the basic operations and exigencies of philosophy comes clearly into view.” Similarly, throughout his career, Derrida (2003, pp. 62-63; also see Derrida, 1981, pp. 27-28, 34-36; 1982, p. 229; Caputo, 1997, p. 80; Kearney 1984, pp. 123-124) repeatedly took pains to explain that:

…people who read me and think I’m playing with or transgressing norms—which I do, of course—usually don’t know what I know: that all of this has not only been made possible by but is constantly in contact with very classical, rigorous, demanding discipline in writing, in ‘demonstrating,’ in rhetoric. …the fact that I’ve been trained in and that I am at some level true to this classical teaching is essential. … When I take liberties, it’s always by measuring the distance from the standards I know or that I’ve been rigorously trained in.

Derrida (1989b, p. 218) recognized that

As soon as you give up philosophy, or the word philosophy, what happens is not something new or beyond philosophy, what happens is that some old hidden philosophy under another name—for instance the name of literary theory or psychology or anthropology and so on—go on dominating the research in a dogmatic or implicit way. And when you want to make this implicit philosophy as clear and explicit as possible, you have to go on philosophizing…. That’s why I am true to philosophy.

To give up on philosophy is to give up on the desire for meaning, for the working out of a common language, to accept an inevitably premature conclusion as definitive and to choose violence as an acceptable means of working out differences. Spivak (1990, 1993) then speaks to the strategic pauses that must interrupt the critical process to allow new determinations to inform revitalized concepts and applications in dialogue.

Finally, moving forward from here to better understand what it means to measure distances relative to standards requires close consideration of mathematical issues of modeling and signification. These issues reside deeply in the motivating ideas of philosophy, as has been widely recognized over the course of the history of Continental philosophy, through the works of Husserl, Heidegger, Gadamer, Derrida, and others (Derrida, 1989a, pp. 27, 66; Fisher, 2003a, 2003b, 2004, 2010; Kisiel, 2002). Much more remains to be said and done in this area.

References

Bernasconi, R. (1989). Seeing double: Destruktion and deconstruction. In D. P. Michelfelder & R. E. Palmer (Eds.), Dialogue & deconstruction: The Gadamer-Derrida encounter (pp. 233-250). Albany, New York: State University of New York Press.

Bloom, A. (1987). The closing of the American mind: How higher education has failed democracy and impoverished the souls of today’s students. New York: Simon & Schuster.

Caputo, J. D. (1997). A commentary. In J. D. Caputo (Ed.), Deconstruction in a nutshell: A conversation with Jacques Derrida (pp. 31-202). New York: Fordham University Press.

Delandshere, G., & Petrosky, A. R. (1994). Capturing teachers’ knowledge. Educational Researcher, 23(5), 11-18.

Derrida, J. (1981). Positions (A. Bass, Trans.). Chicago: University of Chicago Press (Original work published 1972 (Paris: Minuit)).

Derrida, J. (1982). Margins of philosophy. Chicago, Illinois: University of Chicago Press.

Derrida, J. (1989a). Edmund Husserl’s Origin of Geometry: An introduction. Lincoln: University of Nebraska Press.

Derrida, J. (1989b). On colleges and philosophy: An interview conducted by Geoffrey Bennington. In L. Appignanesi (Ed.), Postmodernism: ICA documents (pp. 209-28). London, England: Free Association Books.

Derrida, J. (2003). Interview on writing. In G. A. Olson & L. Worsham (Eds.), Critical intellectuals on writing (pp. 61-9). Albany, New York: State University of New York Press.

Fisher, W. P., Jr. (2003a). 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. (2003b). Mathematics, measurement, metaphor, metaphysics: Parts I & II. Theory & Psychology, 13(6), 753-828.

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

Fisher, W. P., Jr. (2010). Reducible or irreducible? Mathematical reasoning and the ontological method. Journal of Applied Measurement, 11(1), 38-59.

Fisher, W. P., Jr., & Stenner, A. J. (2011). Integrating qualitative and quantitative research approaches via the phenomenological method. International Journal of Multiple Research Approaches, 5(1), 89-103.

Gasché, R. (1987). Infrastructures and systemacity. In J. Sallis (Ed.), Deconstruction and philosophy: The texts of Jacques Derrida (pp. 3-20). Chicago, Illinois: University of Chicago Press.

Habermas, J. (1995). Moral consciousness and communicative action. Cambridge, Massachusetts: MIT Press.

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

Heidegger, M. (1982). The basic problems of phenomenology (J. M. Edie, Ed.) (A. Hofstadter, Trans.). Studies in Phenomenology and Existential Philosophy. Bloomington, Indiana: Indiana University Press (Original work published 1975).

Kearney, R. (1984). Dialogues with contemporary Continental thinkers: The phenomenological heritage. Manchester, England: Manchester University Press.

Kisiel, T. (2002). The mathematical and the hermeneutical: On Heidegger’s notion of the apriori. In A. Denker & M. Heinz (Eds.), Heidegger’s way of thought: Critical and interpretative signposts (pp. 187-199). New York: Continuum International Publishing Group.

Ricoeur, P. (1967). Violence et langage (J. Bien, Trans.). Recherches et Debats: La Violence, 59, 86-94. (Rpt. in D. Stewart & J. Bien, (Eds.). (1974). Violence and language, in Political and social essays by Paul Ricoeur (pp. 88-101). Athens, OH: Ohio University Press.)

Risser, J. (1989). The two faces of Socrates: Gadamer/Derrida. In D. P. Michelfelder & R. E. Palmer (Eds.), Dialogue & deconstruction: The Gadamer-Derrida encounter (pp. 176-185). Albany, New York: State University of New York Press.

Spivak, G. C. (1990). The post-colonial critic: Interviews, strategies, dialogue. New York: Routledge.

Spivak, G. C. (1993). Outside in the teaching machine. New York: Routledge.

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

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.

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

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?

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.

Reimagining Capitalism Again, Part III: Reflections on Greider’s “Bold Ideas” in The Nation

And so, The Nation’s “Bold Ideas for a New Economy” is disappointing for not doing more to start from the beginning identified by its own writer, William Greider. The soul of capitalism needs to be celebrated and nourished, if we are to make our economy “less destructive and domineering,” and “more focused on what people really need for fulfilling lives.” The only real alternative to celebrating and nourishing the soul of capitalism is to kill it, in the manner of the Soviet Union’s failed experiments in socialism and communism.

The article speaks the truth, though, when it says there is no point in trying to persuade the powers that be to make the needed changes. Republicans see the market as it exists as a one-size-fits-all economic panacea, when all it can accomplish in its current incomplete state is the continuing externalization of anything and everything important about human, social, and environmental decency. For their part, Democrats do indeed “insist that regulation will somehow fix whatever is broken,” in an ever-expanding socialistic micromanagement of every possible exception to the rules that emerges.

To date, the president’s efforts at a nonpartisan third way amount only to vacillations between these opposing poles. The leadership that is needed, however, is something else altogether. Yes, as The Nation article says, capitalism needs to be made to serve the interests of society, and this will require deep structural change, not just new policies. But none of the contributors of the “bold ideas” presented propose deep structural changes of a kind that actually gets at the soul of capitalism. All of the suggestions are ultimately just new policies tweaking superficial aspects of the economy in mechanical, static, and very limited ways.

The article calls for “Democratizing reforms that will compel business and finance to share decision-making and distribute rewards more fairly.” It says the vision has different names but “the essence is a fundamental redistribution of power and money.” But corporate distortions of liability law, the introduction of boardroom watchdogs, and a tax on financial speculation do not by any stretch of the imagination address the root causes of social and environmental irresponsibility in business. They “sound like obscure technical fixes” because that’s what they are. The same thing goes for low-cost lending from public banks, the double or triple bottom lines of Benefit Corporations, new anti-trust laws, calls for “open information” policies, added personal stakes for big-time CEOs, employee ownership plans, the elimination of tax subsidies for, new standards for sound investing, new measures of GDP, and government guarantees of full employment.

All of these proposals sound like what ought to be the effects and outcomes of efforts addressing the root causes of capitalisms’ shortcomings. Instead, they are band aids applied to scratched fingers and arms when multiple by-pass surgery is called for. That is, what we need is to understand how to bring the spirit of capitalism to life in the new domains of human, social, and environmental interests, but what we’re getting are nothing but more of the same piecemeal ways of moving around the deck chairs on the Titanic.

There is some truth in the assertion that what really needs reinventing is our moral and spiritual imagination. As someone (Einstein or Edison?) is supposed to have put it, originality is simply a matter of having a source for an analogy no one else has considered. Ironically, the best model is often the one most taken for granted and nearest to hand. Such is the case with the two-sided scientific and economic effects of standardized units of measurement. The fundamental moral aspect here is nothing other than the Golden Rule, independently derived and offered in cultures throughout history, globally. Individualized social measurement is nothing if not a matter of determining whether others are being treated in the way you yourself would want to be treated.

And so, yes, to stress the major point of agreement with The Nation, “the new politics does not start in Washington.” Historically, at their best, governments work to keep pace with the social and technical innovations introduced by their peoples. Margaret Mead said it well a long time ago when she asserted that small groups of committed citizens are the only sources of real social change.

Not to be just one of many “advocates with bold imaginations” who wind up marginalized by the constraints of status quo politics, I claim my personal role in imagining a new economic future by tapping as deeply as I can into the positive, pre-existing structures needed for a transition into a new democratic capitalism. We learn through what we already know. Standards are well established as essential to commerce and innovation, but 90% of the capital under management in our economy—the human, social, and natural capital—lacks the standards needed for optimal market efficiency and effectiveness. An intangible assets metric system will be a vitally important way in which we extend what is right and good in the world today into new domains.

To conclude, what sets this proposal apart from those offered by The Nation and its readers hinges on our common agreement that “the most threatening challenge to capitalism is arguably the finite carrying capacity of the natural world.” The bold ideas proposed by The Nation’s readers respond to this challenge in ways that share an important feature in common: people have to understand the message and act on it. That fact dooms all of these ideas from the start. If we have to articulate and communicate a message that people then have to act on, we remain a part of the problem and not part of the solution.

As I argue in my “The Problem is the Problem” blog post of some months ago, this way of defining problems is itself the problem. That is, we can no longer think of ourselves as separate from the challenges we face. If we think we are not all implicated through and through as participants in the construction and maintenance of the problem, then we have not understood it. The bold ideas offered to date are all responses to the state of a broken system that seek to reform one or another element in the system when what we need is a whole new system.

What we need is a system that so fully embodies nature’s own ecological wisdom that the medium becomes the message. When the ground rules for economic success are put in place such that it is impossible to earn a profit without increasing stocks of human, social, and natural capital, there will be no need to spell out the details of a microregulatory structure of controlling new anti-trust laws, “open information” policies, personal stakes for big-time CEOs, employee ownership plans, the elimination of tax subsidies, etc. What we need is precisely what Greider reported from Innovest in his book: reliable, high quality information that makes human, social, and environmental issues matter financially. Situated in a context like that described by Bernstein in his 2004 The Birth of Plenty, with the relevant property rights, rule of law, scientific rationality, capital markets, and communications networks in place, it will be impossible to stop a new economic expansion of historic proportions.

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.
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Reimagining Capitalism Again, Part II: Scientific Credibility in Improving Information Quality

The previous posting here concluded with two questions provoked by a close consideration of a key passage in William Greider’s 2003 book, The Soul of Capitalism. First, how do we create the high quality, solid information markets need to punish and reward relative to ethical and sustainable human, social, and environmental values? Second, what can we learn from the way we created that kind of information for property and manufactured capital? There are good answers to these questions, answers that point in productive directions in need of wide exploration and analysis.

The short answer to both questions is that better, more scientifically rigorous measurement at the local level needs to be implemented in a context of traceability to universally uniform standards. To think global and act local simultaneously, we need an efficient and transparent way of seeing where we stand in the world relative to everyone else. Having measures expressed in comparable and meaningful units is an important part of how we think global while acting local.

So, for markets to punish and reward businesses in ways able to build human, social, and environmental value, we need to be able to price that value, to track returns on investments in it, and to own shares of it. To do that, we need a new intangible assets metric system that functions in a manner analogous to the existing metric system and other weights and measures standards. In the same way these standards guarantee high quality information on volume, weight, thermal units, and volts in grocery stores and construction sites, we need a new set of standards for human abilities, performances, and health; for social trust, commitment, and loyalty; and for the environment’s air and water processing services, fisheries, gene pools, etc.

Each industry needs an instrumentarium of tools and metrics that mediate relationships universally within its entire sphere of production and/or service. The obvious and immediate reaction to this proposal will likely be that this is impossible, that it would have been done by now if it was possible, and that anyone who proposes something like this is simply unrealistic, perhaps dangerously so. So, here we have another reason to add to those given in the June 8, 2011 issue of The Nation (http://www.thenation.com/article/161267/reimagining-capitalism-bold-ideas-new-economy) as to why bold ideas for a new economy cannot gain any traction in today’s political discourse.

So what basis in scientific authority might be found for this audacious goal of an intangible assets metric system? This blog’s postings offer multiple varieties of evidence and argument in this regard, so I’ll stick to more recent developments, namely, last week’s meeting of the International Measurement Confederation (IMEKO) in Jena, Germany. Membership in IMEKO is dominated by physicists, engineers, chemists, and clinical laboratorians who work in private industry, academia, and government weights and measures standards institutes.

Several IMEKO members past and present are involved with one or more of the seven or eight major international standards organizations responsible for maintaining and improving the metric system (the Systeme Internationale des Unites). Two initiatives undertaken by IMEKO and these standards organizations take up the matter at issue here concerning the audacious goal of standard units for human, social, and natural capital.

First, the recently released third edition of the International Vocabulary of Measurement (VIM, 2008) expands the range of the concepts and terms included to encompass measurement in the human and social sciences. This first effort was not well informed as to the nature of widely realized state of the art developments in measurement in education, health care, and the social sciences. What is important is that an invitation to further dialogue has been extended from the natural to the social sciences.

That invitation was unintentionally accepted and a second initiative advanced just as the new edition of the VIM was being released, in 2008. Members of three IMEKO technical committees (TC 1-7-13; those on Measurement Science, Metrology Education, and Health Care) cultivate a special interest in ideas on the human and social value of measurement. At their 2008 meeting in Annecy, France, I presented a paper (later published in revised form as Fisher, 2009) illustrating how, over the previous 50 years and more, the theory and practice of measurement in the social sciences had developed in ways capable of supporting convenient and useful universally uniform units for human, social, and natural capital.

The same argument was then advanced by my fellow University of Chicago alum, Nikolaus Bezruczko, at the 2009 IMEKO World Congress in Lisbon. Bezruczko and I both spoke at the 2010 TC 1-7-13 meeting in London, and last week our papers were joined by presentations from six of our colleagues at the 2011 IMEKO TC 1-7-13 meeting in Jena, Germany. Another fellow U Chicagoan, Mark Wilson, a long time professor in the Graduate School of Education at the University of California, Berkeley, gave an invited address contrasting four basic approaches to measurement in psychometrics, and emphasizing the value of methods that integrate substantive meaning with mathematical rigor.

Examples from education, health care, and business were then elucidated at this year’s meeting in Jena by myself, Bezruczko, Stefan Cano (University of Plymouth, England), Carl Granger (SUNY, Buffalo; paper presented by Bezruczko, a co-author), Thomas Salzberger (University of Vienna, Austria), Jack Stenner (MetaMetrics, Inc., Durham, NC, USA), and Gordon Cooper (University of Western Australia, Crawley, WA, Australia; paper presented by Fisher, a co-author).

The contrast between these presentations and those made by the existing IMEKO membership hinges on two primary differences in focus. The physicists and engineers take it for granted that all instrument calibration involves traceability to metrological reference standards. Dealing as they are with existing standards and physical or chemical materials that usually possess deterministically structured properties, issues of how to construct linear measures from ordinal observations never come up.

Conversely, the social scientists and psychometricians take it for granted that all instrument calibration involves evaluations of the capacity of ordinal observations to support the construction of linear measures. Dealing as they are with data from tests, surveys, and rating scale assessments, issues of how to relate a given instrument’s unit to a reference standard never come up.

Thus there is significant potential for mutually instructive dialogue between natural and social scientists in this context. Many areas of investigation in the natural sciences have benefited from the introduction of probabilistic concepts in recent decades, but there are perhaps important unexplored opportunities for the application of probabilistic measurement, as opposed to statistical, models. By taking advantage of probabilistic models’ special features, measurement in education and health care has begun to realize the benefit of broad generalizations of comparable units across grades, schools, tests, and curricula.

Though the focus of my interest here is in the capacity of better measurement to improve the efficiency of human, social, and natural capital markets, it may turn out that as many or more benefits will accrue in the natural sciences’ side of the conversation as in the social sciences’ side. The important thing for the time being is that the dialogue is started. New and irreversible mutual understandings between natural and social scientists have already been put on the record. It may happen that the introduction of a new supply of improved human, social, and natural capital metrics will help articulate the largely, as yet, unstated but nonetheless urgent demand for them.

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.

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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Reimagining Capitalism Again, Part I: Reflections on Greider’s Soul of Capitalism

In his 2003 book, The Soul of Capitalism, William Greider wrote, “If capitalism were someday found to have a soul, it would probably be located in the mystic qualities of capital itself” (p. 94). The recurring theme in the book is that the resolution of capitalism’s deep conflicts must grow out as organic changes from the roots of capitalism itself.

In the book, Greider quotes Innovest’s Michael Kiernan as suggesting that the goal has to be re-engineering the DNA of Wall Street (p. 119). He says the key to doing this is good reliable information that has heretofore been unavailable but which will make social and environmental issues matter financially. The underlying problems of exactly what solid, high quality information looks like, where it comes from, and how it is created are not stated or examined, but the point, as Kiernan says, is that “the markets are pretty good at punishing and rewarding.” The objective is to use “the financial markets as an engine of reform and positive change rather than destruction.”

This objective is, of course, the focus of multiple postings in this blog (see especially this one and this one). From my point of view, capitalism indeed does have a soul and it is actually located in the qualities of capital itself. Think about it: if a soul is a spirit of something that exists independent of its physical manifestation, then the soul of capitalism is the fungibility of capital. Now, this fungibility is complex and ambiguous. It takes its strength and practical value from the way market exchange are represented in terms of currencies, monetary units that, within some limits, provide an objective basis of comparison useful for rewarding those capable of matching supply with demand.

But the fungibility of capital can also be dangerously misconceived when the rich complexity and diversity of human capital is unjustifiably reduced to labor, when the irreplaceable value of natural capital is unjustifiably reduced to land, and when the trust, loyalty, and commitment of social capital is completely ignored in financial accounting and economic models. As I’ve previously said in this blog, the concept of human capital is inherently immoral so far as it reduces real human beings to interchangeable parts in an economic machine.

So how could it ever be possible to justify any reduction of human, social, and natural value to a mere number? Isn’t this the ultimate in the despicable inhumanity of economic logic, corporate decision making, and, ultimately, the justification of greed? Many among us who profess liberal and progressive perspectives seem to have an automatic and reactionary prejudice of this kind. This makes these well-intentioned souls as much a part of the problem as those among us with sometimes just as well-intentioned perspectives that accept such reductionism as the price of entry into the game.

There is another way. Human, social, and natural value can be measured and made manageable in ways that do not necessitate totalizing reduction to a mere number. The problem is not reduction itself, but unjustified, totalizing reduction. Referring to all people as “man” or “men” is an unjustified reduction dangerous in the way it focuses attention only on males. The tendency to think and act in ways privileging males over females that is fostered by this sense of “man” shortchanges us all, and has happily been largely eliminated from discourse.

Making language more inclusive does not, however, mean that words lose the singular specificity they need to be able to refer to things in the world. Any given word represents an infinite population of possible members of a class of things, actions, and forms of life. Any simple sentence combining words into a coherent utterance then multiplies infinities upon infinities. Discourse inherently reduces multiplicities into texts of limited lengths.

Like any tool, reduction has its uses. Also like any tool, problems arise when the tool is allowed to occupy some hidden and unexamined blind spot from which it can dominate and control the way we think about everything. Critical thinking is most difficult in those instances in which the tools of thinking themselves need to be critically evaluated. To reject reduction uncritically as inherently unjustified is to throw the baby out with the bathwater. Indeed, it is impossible to formulate a statement of the rejection without simultaneously enacting exactly what is supposed to be rejected.

We have numerous ready-to-hand examples of how all reduction has been unjustifiably reduced to one homogenized evil. But one of the results of experiments in communal living in the 1960s and 1970s, as well as of the fall of the Soviet Union, was the realization that the centralized command and control of collectively owned community property cannot compete with the creativity engendered when individuals hold legal title to the fruits of their labors. If individuals cannot own the results of the investments they make, no one makes any investments.

In other words, if everything is owned collectively and is never reduced to individually possessed shares that can be creatively invested for profitable returns, then the system is structured so as to punish innovation and reward doing as little as possible. But there’s another way of thinking about the relation of the collective to the individual. The living soul of capitalism shows itself in the way high quality information makes it possible for markets to efficiently coordinate and align individual producers’ and consumers’ collective behaviors and decisions. What would happen if we could do that for human, social, and natural capital markets? What if “social capitalism” is more than an empty metaphor? What if capital institutions can be configured so that individual profit really does become the driver of socially responsible, sustainable economics?

And here we arrive at the crux of the problem. How do we create the high quality, solid information markets need to punish and reward relative to ethical and sustainable human, social, and environmental values? Well, what can we learn from the way we created that kind of information for property and manufactured capital? These are the questions taken up and explored in the postings in this blog, and in my scientific research publications and meeting presentations. In the near future, I’ll push my reflection on these questions further, and will explore some other possible answers to the questions offered by Greider and his readers in a recent issue of The Nation.

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.