Spent much of the past couple of days getting overly-involved in two great threads on Venessa Miemis‘ ‘Emergent by Design‘ blog:

• Social Capital is not the same as Whuffie
• What could the future of money look like?

The first thread started with a very necessary attempt to distinguish between social-capital and reputation-based ‘currencies’ such as Cory Doctorow’s imaginary ‘Whuffie‘ (as described in his sci-fi novel “Down and Out in the Magic Kingdom” – the ‘magic kingdom’ being Disneyland, of course ). The key distinction that Venessa drew – and I think she’s right – is that social-capital is collective, a ‘network effect’ of the social context, whereas reputation is an attribute within the frame of that social-network, typically attached or attributed to the individual: in other words, they’re not the same, and should definitely not be treated as being the same.

This lead to the second thread, about ‘the future of money’, because much of the discussion in the ‘Whuffie’ thread was about the supposed need for some kind of ‘alternative currency’. (Clearly some people in the thread had hoped that ‘Whuffie’ would be it, but despite the efforts of well-meant initiatives such as The Whuffie Bank, it became evident quite quickly that it wouldn’t and couldn’t work in a ‘currency-like’ way.) There was – and at present, still is – a lot of discussion about various ‘currency-like’ proposals, such as TimeBanks, ITEX cashless payment, ‘Quids’ alternate-currency, and so on.

But what I found immensely frustrating was that almost none of them were thinking in true economic terms – and I wasn’t very popular for pointing out this unfortunate fact. Instead of enquiring what an economy is, what it needs to do, what purpose it serves, and so on – what would seem to be essential first-principles concerns about the context – they’d all assumed automatically, without question, that some kind of currency was ‘the answer’, and hence rushed off to create it. In other words, exactly the same mistake as far too many IT-folks: “here’s the solution – how can we force your problem to fit it?”

Ready? Fire!!! … aim…?

oops…

Yeah… really frustrating…

No-one with any sense would doubt that there are serious problems with the present ‘money-economy’ – not so much ’serious problems’ as ‘close to catastrophic failure’, in fact. Everyone in that conversation recognised this – which is why they were pushing so hard for alternatives. But the catch was that none of the alternatives actually resolved the core reasons why a money-economy won’t work; most of the proposed ’solutions’ not only replicated those problems, but actually made some of them worse. What was so frustrating was that in each case it took no more than a couple of minutes’ analysis not only to show that it wouldn’t work, but why it wouldn’t work. Yet no-one, it seemed, wanted to hear this: instead, off they want, charging off down their respective blind-alleys in the blind certainty that they’d found ‘the solution’.

What’s wrong with money, then? Short answer is: a lot. To give just a few examples:

• It only deals with point-to-point transactions, not network-effects – especially at a societal level.
• It’s designed to work with ‘alienable’ physical objects, but now no longer has any actual anchor in the real world – instead, we have literally trillions of supposed ‘money’ in imaginary ‘derivatives’ sloshing around the globe.
• It’s very easy to ‘game’ via artificially-constructed price/value mismatches.
• The implied ‘gravitation’ structure of money-based capital means that it tends to create ‘winner-takes-all’ accumulations – exacerbating social imbalances, often in the extreme, requiring separate action to try to redress the balance.
• Attempts to link ‘intellectual property’ into the money-system have resulted in a system which purports to match finite ‘alienable’ entities (physical ‘things’) with potentially-infinite ‘non-alienable’ entities (information) – which by definition cannot balance.
• Many organisations – particularly banks – are legally ‘entitled’ to invent money from nowhere, in effect assigning themselves an ever-increasing share of the society’s resources.
• A currency, by definition, relies on trust in the institutions that manage that currency, which in this case is the banks – yet much of that trust has been lost, and at present remains at an all-time low (hence the strong societal interest in options for ‘alternative currencies’).
• There are no built-in mechanisms to manage assignment of resources to those ‘outside’ of the monetary exchange-system (particularly children, parents, elderly, disabled and their carers, but also artists, scientists, thinkers, futurists, ‘creatives’ of any kind) – these stakeholders can only be served by ‘external’ mechanisms such as taxation (which are clunky and kludge-ridden at best), or by forcing them to do work within the money-economy (which means that their actual needed work can no longer be done).
• There is a very strong tendency towards short-termism.
• There is a very strong tendency to try to force everything into a crude, ludicrously-simplistic ‘double-entry life-keeping’.
• There is a very strong tendency to assume that ‘value’ exists only in monetary terms, as ‘valuations’ of ‘resources’ – hence, for example, a forest supposedly has no value until it is cut down, a mountain has no value until mined for its minerals, and so on.
• There is a very strong tendency to assume that anything which cannot be counted and ‘valued’ in monetary terms either does not matter or does not exist.

The societal impacts of these problems are rapidly approaching catastrophic levels. Yet none of the proposed ‘alternative currencies’ tackle more than a minute fraction of that list: most offer at best a localised kludge that might address a couple of issues whilst creating several more.

Let’s be blunt about this: the present system does not work. It actually never has – and that’s not surprising, because it was only ever intended to deal with point-to-point ‘trade’-transactions between fairly large groups (tribes, communities etc), hence it’s bit unfair to expect it to be able to run the entirety of an economy. But to create something that does work, we do need to go right back up to the level of the entire economy, and work our way back down from there. Which, yes, might – might – include some kind of ‘currency’ to tackle specific types of transactions: but not as the core of the economy itself.

This is actually no different from any other whole-of-enterprise architecture. (The only distinction is that it’s an ‘enterprise’ at the scale of an entire society, but that’s all.) So we would use the same overall approach:

• Who (and/or what) are the stakeholders in this enterprise?
• What are the core values? What is ‘value’ in this context? What is valued, and by whom? In other words, what determines ‘appropriate’ in this enterprise?
• What are the assets, functions, locations, events, capabilities and decisions within this enterprise? – in other words, the resources of the enterprise that need to be managed, distributed, shared and used in the most appropriate manner.
• What are the value-propositions that this enterprise needs to offer to and with its stakeholders?
• What mechanisms and responsibilities would be needed to create, deliver and monitor those value-propositions?
• What governance would be needed to ensure that all activities within the enterprise are optimised to be ‘on purpose’?
• …and so on.

To me, every attempt at a currency will inherently fail because it cannot take network-effects into account: by its nature, a currency is a mechanism for governance of point-to-point transactions, without any direct means to link to whole-of-system impacts. So I honestly believe that all of these attempts at ‘alternative currencies’ are a waste of time: we should be far better served by putting the same effort into understanding how an economy actually works.

And the key to that, to my mind, comes down to perhaps the scariest fact of all: there are no rights. ‘Rights’ are a social fiction; but the mutual, interlocking responsibilities that underpin those purported ‘rights’ are a social reality. If we want those purported ‘rights’, where we need to start is with creating a better understanding the ways in which those real responsibilities need to interlock: a focus on ‘rights’, like a focus on ‘currency’, is at best an unhelpful distraction from this requirement.

Where this gets gets scarier still is that our entire present economic model is based on a concept of ‘right of possession’ – hence a ‘right to personal property’. But there are no rights: only responsibilities are real. And in a network, there is no ‘personal’: only the network is real. Right at the fundamentals of economics, ‘personal property’ is just another fiction – and a very dangerous fiction at that. Yet personal responsibilities for societal resources – the appropriate management, maintenance and use of those resources – are real. And as with ‘rights’, those interlocking responsibilities result in something that looks almost exactly the same as ‘personal property’ – but we now know how we get there, via those responsibilities.

If we turn it this way round, we end up with something that looks very similar to what we have at present: but it resolves all of the structural flaws of a ‘money-type’ economy, and we also know exactly how we get there.

Once we know that that’s what we need to aim for, then we can start talking about ‘intermediate currencies’ and the rest, as part of a transitional ‘roadmap’ towards that more workable model. But those ‘alternative currencies’ are only an intermediate step, and we don’t start from there.

That’s what would change these sad attempts at ‘Ready? Fire! Aim…’ into a more viable ‘Ready? Aim? Fire!’ – and rekindle the fire in our social economy.

Not actually ‘cryptic’ in the usual sense – just that the cafe in the Crypt below the church-cum-concert-hall of St Martins-in-the-Fields is a useful and pleasant place for meetings in the middle of London. (It’s just off Trafalgar Square, and a very long time since it was literally “in the fields”, next to the garden of the convent that is now known as Covent Garden.)

Anyway, two great conversations yesterday with Chris Potts and Sally Bean on enterprise-architecture and an assortment of other related topics. More details after the ‘Read more…’ link.

Read more…

Another instalment from the long-running discussion on LinkedIn about values-architecture. This part is about one of the more confusing ‘red-herring’ distractions in values-architecture, namely the notion that discussing anything other than money is somehow supposedly ‘politics’, which is therefore ‘wrong’ – and thence the mistaken belief that we should only discuss monetary metrics in a values-architecture.

The discussion went on for quite a long time, but it’s perhaps useful to record in some detail because it shows quite a variety of angles from which to tackle this specific type of objection.

This’ll be another long one, so I’ll place the usual ‘Read more…’ link here.

Read more…

Another (somewhat late) collection of Tweets and links, following the ‘Read more…’ link:

Read more…

Been some time here since I mentioned my other more business-oriented weblog, SideWise.biz. I’ve added a fair few items over the past few months:

• The market as economy: how ‘the market’ consists of much more than just transactions, and how three distinct forms of ‘the economy’ intersect in one place
• Power, responsibility and bullying in the workplace: “When power in the workplace transmutes into bullying, we have a problem. A big problem.”
• Surviving the skills-learning labyrinth: “How do you and your staff learn new skills? And what can be done to make it quicker and easier to learn those needed skills? One answer is to explore the patterns in the skills-learning process.”
• Making continuous-improvement visible: If continuous-improvement consists of many small, almost-imperceptible changes, how do we make overall improvement visible? This article explores how.
• Money is the root of all… wasted time?: The usual claim is that ‘money makes the world go round’; but if so, why is it that the world seems to come to a halt each money has to change hands? This article explores the importance of a whole-of-system view of economics.
• The rise of the business-anarchist: To get the best from a stable system, you need business-analysts; but when the world is changing around you, you need the help of your business-anarchists! This article explains who they are, what they do, how they help to manage change, and how to find them within your own organisation.
• Ten ways to fail – and how to avoid them: “Success often arises just from avoiding failure.” This article explores ten key causes of failure, and what to do to avoid them.
• Where have all the good skills gone?: This article explore a rarely-acknowledged cause of the current ’skills-shortage’: an incomplete understanding of the limits of automation.
• The relationship is the asset: “‘Our people are our greatest asset!’ How often have you stopped to think about what that phrase means – and what it implies in real business practice?”

More to follow over the next few weeks, of course. Share and Enjoy, perhaps?

The media response was predictable, I suppose: sometimes considered and thoughtful – ‘France offers us all a new perspective‘ – but often sarcastic or dismissive – ‘Sarkozy proposes the joie de vivre index‘. Yet the recent report on economics models [PDF: 3.2Mb], commissioned by French president Nicholas Sarkozy and written by a group of economists including Nobel prizewinners Thomas Stiglitz and Amartya Sen, is full of solid sense – and much of it may be relevant to business-architects and enterprise-architects.

Gross domestic product (GDP) is the most widely used measure of economic activity. There are international standards for its calculation, and much thought has gone into its statistical and conceptual bases. But GDP mainly measures market production, though it has often been treated as if it were a measure of economic well-being. Conflating the two can lead to misleading indications about how well-off people are and entail the wrong policy decisions.

The business equivalent of GDP is the financial ‘bottom-line’: it tells us about the financial health of the organisation, but almost nothing about its overall ‘economic well-being’. Hence, as the report’s authors assert, ”the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s wellbeing”:

Well-being is multi-dimensional:

i. Material living standards (income, consumption and wealth);
ii. Health;
iii. Education;
iv. Personal activities including work
v. Political voice and governance;
vi. Social connections and relationships;
vii. Environment (present and future conditions);
viii. Insecurity, of an economic as well as a physical nature.

All these dimensions shape people’s well-being, and yet many of them are missed by conventional income measures.

The same is true in organisations. Balanced Scorecard, for example, is one attempt to redress the balance, but as can be seen from the list above, it still doesn’t go anything like far enough in exploring the metrics that the organisation really needs.

At the enterprise level, what this is really about is enterprise effectiveness – ‘efficient on purpose’ and the like. So it’s worth reviewing with an architect’s eye the Commission’s main list of recommendations:

• Recommendation 1: When evaluating material well-being, look at income and consumption rather than production.
• Recommendation 2: Emphasise the household perspective.
• Recommendation 3: Consider income and consumption jointly with wealth.
• Recommendation 4: Give more prominence to the distribution of income, consumption and wealth.
• Recommendation 5: Broaden income measures to non-market activities.
• Recommendation 6: Quality of life depends on people’s objective conditions and capabilities. Steps should be taken to improve measures of people’s health, education, personal activities and environmental conditions. In particular, substantial effort should be devoted to developing and implementing robust, reliable measures of social connections, political voice, and insecurity that can be shown to predict life satisfaction.
• Recommendation 7: Quality-of-life indicators in all the dimensions covered should assess inequalities in a comprehensive way.
• Recommendation 8: Surveys should be designed to assess the links between various quality-of-life domains for each person, and this information should be used when designing policies in various fields.
• Recommendation 9: Statistical offices should provide the information needed to aggregate across quality-of-life dimensions, allowing the construction of different indexes.
• Recommendation 10: Measures of both objective and subjective well-being provide key information about people’s quality of life. Statistical offices should incorporate questions to capture people’s life evaluations, hedonic experiences and priorities in their own survey.
• Recommendation 11: Sustainability assessment requires a well-identified dashboard of indicators. The distinctive feature of the components of this dashboard should be that they are interpretable as variations of some underlying “stocks”. A monetary index of sustainability has its place in such a dashboard but, under the current state of the art, it should remain essentially focused on economic aspects of sustainability.
• Recommendation 12: The environmental aspects of sustainability deserve a separate followup based on a well-chosen set of physical indicators. In particular there is a need for a clear indicator of our proximity to dangerous levels of environmental damage (such as associated with climate change or the depletion of fishing stocks.)

What parallels exist in metrics for the enterprise? How would we identify, support and monitor such metrics? What information-systems and business processes would we need for this? What governance, audit and the like?

Suggestions, anyone?

One of the professional hazards of working in the futures space is that, by definition, many if not most of the themes I’m working on are five, ten, fifty or more years into the future. Without people like me doing the far-future work, that future will never happen. But whilst there’s a lot of often all-too-literal blood, sweat and tears that go into that work, almost no-one is willing to pay for it, since they don’t seem to be able to grasp what it means or what it’s worth until it’s already too late.

Sure, I can get by at times by doing what I can only describe as ‘junk-work’, base-level architecture and the like that almost anyone could do; but it isn’t my real work, it isn’t where I have the most value for any nominal employer or society at large, and it isn’t what I know I should be doing. Yet whenever I do try to do my real work, all I’m likely to be ‘paid’ is mockery, denigration and theft – because that’s pretty much all that our wondrous society has to offer for those who do not wish to be thieves themselves. (More on that in a moment.) Over the years, there’ve been quite a few folks now who’ve made a lot of money from my work; yet I doubt if I’ve seen a single penny of recompense from of any of them. Which hurts – and not just in the pocket, either.

Few people in the ‘normal’ world have any idea of the intensity of the loneliness that dominates life out here on the far fringes of everyday reality. I’ve never been an employee; always self-employed, or contract consultant, always the Outsider in any professional context. And although I do have occasional colleagues for whom some of the ideas that thrash through my head do make some degree of sense, fact is I probably have no direct peers, anywhere in the world; literally nothing in common with most people I would meet on the street, or anywhere else, really. That doesn’t make me ‘better’ than anyone else – far from it, more like; but it does make me more alone. In four decades as a nominal adult, I don’t think I’ve ever had a partner (in any sense of ‘partner’) with whom I could truly share my life and work; not surprisingly, yet never by choice, I’ve lived most of my adult life alone. Most of my childhood too, for that matter. Imagine that in your own life: no partner, no spouse, no children, no company, church, community, no person or place that is ‘home’; no certainty of any kind; nowhere to belong. No doubt you’ve had some edges of that for a day or two, a month or two; try it instead for a lifetime. You’ve no doubt been there from time to time, yet each time known too that for you “this too will pass”; try it instead knowing that that aloneness and isolation will never change. Being the Outsider hurts; it never ceases to hurt. Ever.

True, those of us who have to live this strange life do somehow learn to live with the hurt, sort of. We don’t have much choice about it, to be honest. But no real surprise that severe depression is one of the more frequent occupational hazards here. ‘Severe’ is perhaps an understatement: the only word I know that expresses it is the old Welsh term hiraedd, sometimes weakly translated as ‘homesickness’, but more an unyielding, unrelenting homesickness for a ‘home’ that we know does not exist – “a longing and a grieving for that which is not, has never been and shall never be”. Most of the time I manage to keep that hiraedd somewhat at bay; but right now it’s back with a vengeance. Downer again…

To see why this is so hard, and yet so inevitable, consider just two examples of what, after many years of study, I see as ‘fundamental truths’ that clash with core assumptions that underpin our entire current ‘Westernised’ society, and that put me in direct conflict with the politics of ‘ the right’ and ‘the left’ respectively.

The clash with ‘the right’ is this: there is no way to make a possession-economy sustainable. Our entire economy is based on so-called ‘rights’ of possession: yet whilst it’s true that there are a few ways in which it can be made to seem as if it makes sense with physical objects, it doesn’t actually work in practice, and it does not and cannot make sense for information, for business-relationships, or for just about anything else in the real world. What we might best describe as ‘double-entry life-keeping’ is a downright disaster, often falling into black farce: trying paying back a bequest, for example. And whilst, from a shallow, short-term-only analysis, a possession-model can be made to look more productive than its responsibility-based counterpart, in reality it can only be made to seem ’sustainable’ by running it as a pyramid-game, a myth of perpetual ‘growth’. It’s been run that way for some five thousand years or so; but the blunt fact is that we ran out of room for growth in the pyramid perhaps fifty to a hundred years ago, and ever since then we’ve been like the cartoon character who’s run further and further off the cliff, way out into mid-air, but hasn’t acknowledged it yet because she doesn’t dare to look down. True, we might be able keep up the delusion of ‘business as usual’ for a fair few years yet – but the longer we refuse to face it, the harder will be the fall. We still have a chance to switch over to a responsibility-based model now, while we still have the option to do it by choice; later, when the choice is forced upon us, it will be way, way too late for most of what we currently deem to be ‘civilisation’. Not made any easier, either, that the cultures that call themselves ‘developed’ are the ones who’ve lost the plot, whereas the cultures they deride as ‘under-developed’ or, worse, ‘primitive’, are the only ones who have a clue. It’s going to be messy, to say the least; but leaving it much longer is going to be messier still. We know this; we all know this; yet anyone who says it out loud gets hit hard with the good ol’ game of “shoot the messenger”. Been there, done that, have the scars to prove it, am now too scared to even try any more. Yet someone has to do so: just wish it wasn’t me…

The clash with ‘the left’ goes deeper still: there are no rights. The whole concept of ‘rights’ is a self-centred delusion: only responsibilities are real. What we think of as ‘rights’ are desirable outcomes that arise from interlocking mutual responsibilities; but the ‘rights’ themselves do not and cannot exist in any independent form, however much we might declare them to be “true and inalienable” and the rest. In far, far too many cases, a supposed ‘right’ is actually an arbitrary assertion – petulant demand, more like – that someone else has responsibilities to us and for us, whilst we ourselves do not. Wherever such so-called ‘rights’ are inherently asymmetric, they in essence assign all responsibility onto those who are deemed to not have those ‘rights’ – one infamous example being the entire ‘women’s rights’ discourse, which no doubt started out with good intentions but is now little more than state-sponsored abuse of men. And to be utterly blunt, the huge body of law that exists to protect a so-called ‘right’ of possession is actually a state-sponsored form of theft, either in the present, the future or the past. Whenever we start from the ‘rights’ discourse, someone loses – which in the long term means that everyone loses. The only safe place to start is from responsibilities, and mutuality of responsibilities – which, given that our core economic model is based on those supposed ‘rights’ of possession, is exactly what our current society is least willing to do. One probable outcome is that the much-valued, much-praised Bill Of Rights that underpins so much of the USA’s way of life is what is ultimately most likely to destroy it as a nation – and, if we’re not careful, the rest of the world as well. Scary indeed.

So to understand my position as ‘the Outsider’, try knowing those two facts to be true – that there are no rights, and that there is no way to make a ‘rights’-based, possession-based economy sustainable. Try knowing the full implications of those two facts; try knowing, in a deep, visceral sense, the urgency of the societal need to face those facts; then try to find any way to stay sane whilst nigh-on everyone around you is pretending, as hard as they can, that those facts are not true…

So yeah, no real surprise that I’m back in downer again.

And there’s a lot more where those two clashes came from: a lot more. That’s what I do, that’s my real work: trying to make sense of enterprise-architecture in every scope and sense of ‘enterprise’, sometimes right down in the details, sometimes necessarily right up to the scale of an entire world, present, past, future. And I live with those deep facts, every day, working flat out trying to find any viable ways to help individuals, groups, companies, entire cultures to gain awareness and understanding and action on this, so as to move from ‘here’ – which is not and cannot be sustainable – to ‘there’ – which just might be, if we make that move in time, and if anyone will listen long enough to move at all.

No doubt the downer will ease off somewhen soon; it usually does. But if you wonder why I seem to slump a bit too much from time to time, and seem a little crazed perhaps more often than you might like, the above might help you to see why that’s so.

Hey ho.

Continuing the theme of the dangers of term-hijack, is the current usage of the term ‘economics’ the worst term-hijack ever?

In almost all references to ‘economics’ these days, it’s clear that the term is meant to mean ‘money on a large scale’. ‘Microeconomics’ relates to pricing goods within a country, and similar themes; ‘macroeconomics’ typically relates to pricing as a means of managing supply and demand in world trade. Money makes the world go round; economics measures those movements of money over time.

But it’s a term-hijack.

If you go back a couple of centuries, you’ll find that ‘economics’ has a radically different meaning. Its literal translation from the Greek is ‘the management of the household‘. Up until the middle of the 19th century, the word ‘economist’ had the exact same meaning as the present-day term ‘home-maker’.

Somewhen around that time, someone presumably needed some means to describe trade, both within the nation and between nations. I’ve no idea who this ’someone’ was, and whether it actually happened a few decades earlier – those details don’t much matter. What does matter is that they latched on to the metaphor of ‘the nation as household’ – but they only meant ‘the money of the household’, not the household as a whole.

In other words, a term-hijack: a small subset purporting to be the whole. Monetary transactions are indeed an aspect of managing a household; but they’re not the whole of managing a household. Managing the money of a household is rarely easy, but in many ways it’s the easiest part of managing a household… for example, as John Lennon famously put it, “money can’t buy me love”, the love that would hold a family together. And in most cultures money is by no means the most important aspect of the household, relevant only in ‘external trade’ – hence the concept of the ‘breadwinner’, the role which obtains those resources that cannot be produced within the household itself.

So here we have a term-hijack that describes money as the only significant part of managing the ‘household’ of the nation. What are some of the consequences of that mistake?

One obvious example is that, as many feminist economists have pointed out, much of what used to be called ‘women’s work’ disappears from the nation’s accounts of ‘economic activity’. Huge differences in the national picture appear when we rethink economics “as if women counted”. Since ‘household’-type tasks are only classed as ‘economic activity’ if money changes hands, bizarre distortions will often appear at present. For example, if two families look after each others’ children, paying each other the exact same amount – in other words, an overall zero-sum – both transactions are classed as ‘economic activity’. But if they each look after their own children, no money changes hands, so no activity is deemed to have occurred – hence the absurd notion that home-parents don’t ‘work’.

(I will admit that I get quite angry when I hear a woman say “I don’t work, I’m only a mother”: parenting is some of the hardest work there is, and what’s that word “only” doing in the sentence anyway, for heavens’ sake??)

When we scale it up to ‘the nation as household’, the distortions get even worse. Volunteering has no value, because no money changes hands. A forest has no value until it’s cut down and sold as timber; the only way we can argue that there might be some value in leaving it alone is if we assign some arbitrary monetary value to the future timber – in effect, a kind of opposite to depreciation – or to, say, the potential income from potential tourists who might want to visit the uncut forest. That there might be value in its own right, the pleasure in quiet, “the ash-grove how graceful / how plainly ’tis speaking / the wind through its branches / is language for me” – that counts for nothing at all in the international standards for economics, such as the United Nations System of National Accounts that’s used by the World Bank and others to assign rankings of nation against nation.

But wait, because yes, it does indeed get worse. Crime doesn’t pay, we’re told; but unlike those household tasks, it does get included in the national accounts. Money changes hands on the black market, the grey market, in corruption or outright theft: that means that it’s ‘economic activity’, with appropriate estimates assigned. And crime – or, for that matter, war, or any other kind of natural or man-made disaster – is ‘good’, because it causes destruction, which means there’s more ‘economic activity’ to repair the damage. Crime is also good because it leads to prison – and prisons are big business in the US, for example, with now 1% of the entire population held behind bars at any given time. Conversely, peace and tranquillity are bad news – because if nothing needs to be repaired, there’s less ‘economic activity’.

Then take a look at GDP (Gross Domestic Product) – the most commonly-quoted of what purports to be a nation’s well-being. The standard formula for GDP (the ‘expenditure method’) is:

GDP = consumption + investment + (government spending) + (exports – imports)

So in effect, GDP is a measure of monetary income for the period in context – usually a single year. Yet it’s only income – just the ‘profit’ side of a profit-and-loss balance – and any fool can fake up a fine-looking profit, especially in the short-term, if all of the costs incurred for that ‘profit’ are ignored. Worse, there’s no concept of ‘natural capital‘, no distinction between farming (which can be sustainable) versus mining (which can’t, by definition). Comparing nations against nations, a country with a higher per-capita GDP is generally presumed to be a ‘better’ nation; but GDP will appear greater in those nations which take no account of their destruction of their own environment – a point which finally emerges in more realistic metrics such as GPI (’Genuine Progress Indicator‘), which shows that in real ‘profit and loss’ terms the US and many European countries have been in steep decline for the past thirty years.

In essence, GDP is a measure of the scale and rate at which money changes hands – nothing more than that. So does this mean that it’s really a measure of the wastefulness of a society, indicating the scale at which items need to be replaced? Or of the nation’s fragility, because of the increased numbers and complexities of interactions using money as a control-mechanism? Or, as a corollary, the lack of self-sufficiency, indicating the lack of ability to resolve needs ‘in-house’? Many people might laugh at Bhutan’s ‘Gross National Happiness‘ metric, for example, but in many ways it’s a lot more realistic, and a lot more meaningful, than GDP’s misleading notion of money as the sole measure of ’success’.

Much the same applies in business: money is seen as the measure of success. But it tells us nothing about how we get to that ’success’; and it’s a lag-indicator, not a lead-indicator – a derivative measure of past activity, not usable guide-metric – so it tells us nothing about what we can or should do to direct the course of the enterprise. It’s an important measure for those who parasite on the enterprise, perhaps, but that’s about it… For those who work in the enterprise, we need metrics which actually mean something, such as those which monitor the enterprise’s ‘ability to do work‘; but money alone is not one of those metrics.

For most people, unaware of the term-hijack of ‘economics = money’, bleak realities such as these would ordinarily be invisible – yet these results of the term-hijack are the exact reason why we’re in so much trouble in real economic terms.

Economics is literally ‘the management of the household’. Management of the household money is indeed one aspect of that ‘management of the household’ – but it’s not the only view of that household, and it’s often not the view that really matters. That applies whatever scale of enterprise or ‘household’ is in scope: a ‘mom-and-pop’ store, a larger company, a multinational, a global corporation; a home, a community, a city, a nation, a world. And the moment we forget that fact – the moment we allow the term-hijack to blind us to the deeper richness, the deeper complexity of the context – we’re in deep, deep trouble.

Term-hijacks matter. ‘Economics’ is probably the worst term-hijack of all, but every term-hijack has the potential to cause disastrous consequences. So watch for them, everywhere – and challenge them every time you see them.

My colleague Shawn Callahan from Australian business-knowledge consultancy Anecdote kindly posted a link via Twitter to the ‘Girleffect.org’ website

Just rewatching http://girleffect.org to remind myself how to use mystery to setup a presentation

As he says in the post, the site-design is a very good illustration of how to build a story to present an idea. But unfortunately I also looked at the content of the site – and found myself quietly roiling in irritation. Oh no, not again…

Looking at it with a business-anarchist’s eye, I suppose I have to applaud its disruptive intent. But it’s what I would call “kiddies’ anarchy” rather than a true responsibility-based anarchy: the catch is that, as usual, it hasn’t been thought-through properly, and what they’re promoting as ‘the right solution’ will almost certainly cause more harm than good in the longer term.

For a start, it displays the usual rampant sexism of Western culture – best summarised by one of the old feminist slogans, “men are the problem, women are the solution”. In this case, it’s “girls are the solution”, but it comes to much the same in the end – there’s no mention of males at all anywhere in it other than one fleeting, quickly-removed reference to ‘husband’, in the same context as ‘cow’. The underlying model is a straightforward win/lose – we don’t actually have to do much to make things better for girls, all we have to do is shut the boys out of everything and it’ll magically all come out right because ‘girls are the solution’. The real end-result is that the boys, having been shut out of the society, will go off and create their own – which, yes, may well be rampantly misogynistic, and which would be no surprise at all given the way boys are treated. The only way that works is a win/win – everything else guarantees that everyone loses in the longer-term. And I must admit I find it so frustrating that would-be activists like the promoters of ‘girleffect’ still do not grasp that basic fact. Hence one reason for “oh no, not again…”.

The other is probably more subtle: the ’solution’ is that putting a girl in a school uniform somehow magically leads to that girl receiving a cow which she will then somehow transform equally magically into a whole herd, which she will sell for dollars, and she will become a rich businesswoman, which will be wonderful for everyone. There’s no grasp of even basic economics; no grasp of basic environmental issues; no grasp of where this will fit into the societal context; nothing. Just magic. What it would really do – unless there’s a full socially-grounded structure such as Grameen behind it – would simply entrap the by-now-woman into the wage-culture – in other words, yet another owned not-quite-slave of globalised business, whilst tangling everyone else around her into the same mess, and almost certainly lead to a medium- to longer-term ‘tragedy of the commons’. Oh no not again…

Feminists in Asian countries especially have routinely expressed their annoyance at what they describe as Western-feminists’ ’smug cultural-imperialist intrusions’ into their own much more complex societal contexts: judging from the content of the girleffect’ website, they certainly have a point.

Nice idea; nice sentiment and all that (if it wasn’t so damned sexist); but overall, I just wish these blasted people would think for once…

Bah.