Date: 2024-07-17 Page is: DBtxt003.php txt00021307
ECONOMIC SYSTEM
RIANE EISNER
The Real Wealth of Nations: Creating an Economics of Partnership
by Riane Eisner with Center for Partnership Systems.
RIANE EISNER
The Real Wealth of Nations: Creating an Economics of Partnership
by Riane Eisner with Center for Partnership Systems.
CPS website: Center for Partnership Systems
Original PDF: Riane-Eisner-Speaks-to-United-Nations-General-Assembly-20-April-2011.pdf
Burgess COMMENTARY
Diane Eisler has written extensively and has many good ideas. The image of economic jigsaw is very creative amd quite sensible. When I saw this I was reminded of a family I knew many years ago who collected 3 dimensional jigsaws ... a hobby that required very clear thinking in many dimensions. The reason the Eisler image reminded me of this is, of cource, that while her articulation of the socio-economic system in two dimensions was more comprehensive than the general metrics that have been used for decades, it was still only a two dimensional framework when actually much more is required.
I have a very different background to Riane Eisler and see things much more from a management accounting perspective and an engineering perspective. In my view of the way the world works, there are three main segments: (1) a social segment; (2) an environmental segment; and (3) an economic segment. Everything has to fit 'within' these three segments. This is the foundational framing for TrueValueMetrics (TVM). Nothing may be left out and ignored.
These three segments have a 'state' at any moment in time ... and over time this 'state' changes. There are many reasons the state changes over time, some of them are to do with all sorts of human activity, and some are happening because that is how the natural world works. In the past 500 years there has been a massive change in the way in which human activity is changing state, for good and for bad. The idea of 'state' is similar to the concept of 'balance sheet' in conventional financial accounting.
All sorts of 'activities' change state. The inputs to activities consume resources and reduce the 'state' of the resource. The resource may be human capital ... the time an individual has to deliver labor ... or it may be the use of natural capital like crude oil or coal ... or the degradation of production equipment that is part of economic capital. The outputs may be both good and bad. There are activities that result in the improvement in quality of life ... and activities that increase economic wealth ... but too often these same activities result in degradation of the environment. Many products that improve quality of life when they are used by people have done substantial damage to the environment in order to get produced or when they are used. The impact of activities is not unlike the 'profit and loss' account in conventional financial accounting except with TVM the impact is addressed for the all the social elements, all the environmental elements and all the economic elements.
TVM is framed in a way that enables 'management' which is all about getting decisions made that 'move the needle' in a desired direction. A step in this is to identify the 'actors' that have roles in decision making and the implementation of activities. In the main, the 'actors' are people. Mostly people function as part of a group of people ... in a family, in a business organization ... in a sports team ... in a community ... in a nation. Even so, all individuals have agency to a greater or lesser extent, and may choose how their agency may be used. In the TVM framing it is people who have to be held accountable.
TVM recognises that nature is an actor that functions independently. The way in which nature behaves may be influenced to some extent by people and by industry, but only within rather modest limits. Natural law cannot be overridden by human activity or industrial activity ... everything has to follow nature's rules. Another way of saying this is that 'Science Rules!'
Taken as a whole, the global Socio-Enviro-Economic System is incredible large and complex. Everything has impact on everything else. For the past several hundred years humankind has used economic performance as a proxy for progress and success. This is the foundation for modern conventional financial and management accounting and classical economics which has become quite sophisticated and is embedded in a lot of law and practice in the modern world. It is not, however, enough. It might even be said, that it is a root cause of much of the dysfunction that exists in the modern world where economic competition seems to morph into military confrontation and all sorts of destruction.
TVM addressed the inherent difficulty of getting a simple answer to anything in a complex system. There are almost never answers that are optimal for both or all parties to an interaction. Best is almost always going to be a compromise. The idea that most 'powerful' wins cannot exist in a system that is being optimized for all, and not simply for the most powerful. This is a sea change in how management is done and long overdue!
Peter Burgess