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Date: 2017-11-23 Page is: DBtxt001.php L0700-CC-CAPITALS

ALL THE CAPITALS
NOT JUST FINANCIAL CAPITALS ...CAPITAL FOR ALL THE SOCIO-ENVIRO-ECONOMIC SYSTEM
GO TOP
OVERVIEW
CAPITAL / FACTORS OF PRODUCTION
HUMAN CAPITAL
PEOPLE / QUALITY OF LIFE / COST OF LIVING / CONTRIBUTION TO SOCIETY
Human Capital / Babies / Families / Healthy Food
Open L0700-HC-HUMAN-CAPITAL

Open L07-TVIA#HC
SOCIAL / RELATIONSHIP CAPITAL
PEOPLE IN GROUPS / IN COMMUNITIES / IN SOCIETY
Families / Friends / Communities / Connections
Open L0700-SC-SOCIAL-RELATIONSHIP-CAPITAL

Open L07-TVIA#SC
NATURAL CAPITAL
NATURE / NATURAL SYSTEMS / NATURAL RESOURCES
Planet Earth / Land/ Air / Water / Trees / Storms /
Open L0700-NC-NATURAL-CAPITAL

Open L07-TVIA#NC
CREATED PHYSICAL CAPITAL
BUILDINGS / INFRASTRUCTURE / MACHINERY AND EQUIPMENT / TRANSPORT EQUIPMENT
Indusrial Plant / Buildings / Vehicles / Bridges / Rail / Water / Ports /
Open L0700-CPC-CREATED-PHYSICAL-CAPITAL

Open L07-TVIA#CPC
CREATED INTANGIBLE CAPITAL
RULE OF LAW / SECURITY / KNOWLEDGE / CULTURE / INSTITUTIONS / ETC.
Laws / Justice / Security / Knowledge / Culture
Open L0700-CIC-CREATED-INTANGIBLE-CAPITAL

Open L07-TVIA#CIC
CREATED FINANCIAL CAPITAL
MONEY WEALTH / MONETIZED VALUE
Money / Profit growth / GDP growth / Stock Prices / Cost push inflation / Wages chasing prices
Open L0700-CFC-CREATED-FINANCIAL-CAPITAL

Open L07-TVIA#CFC


SOME DIALOG ABOUT CAPITAL
What is essential is that the concept of CAPITAL includes everything!
GO TOP
INPAGE NAVIGATION SITE NAVIGATION
CAPITALS
The critical concept is that there should be accountability for the impact on ALL of capital, not merely financial capital.
FRAMING THE CAPITAL QUESTION
This framing by Bojan Radej et al uses a 4 capital segmentation
GO #Bojan-Radej
7 DIMENSION CAPITALISM by TVM This 7D Capital approach was proposed by TVM in 2015. It has subsequengly been modified as a 6 Capital segmentation that maps very well to some of the other initatives for analysis and reporting.
The People Dimension:
(1) ... Human Capital;
(2) ... Social Capital;
The Man Built Systems and Structures:
(3) ... Financial Capital;
(4) ... Physical Capital;
(5) ... Knowledge Capital;
(6) ... Institutional Capital;
Nature and Natural Systems
(7) ... Natural Capital
The key concept proposed for this analytical framework is not the number of capitals and the precise way the capitals are segmented but the idea that ALL capitals should be included in the analytical framework and not simply the financial capital.
For the purpose of analysis, the idea of capital and the idea of 'state' are the same. This is convenient in so far as this makes the TVIA analysis approach work in a similar way to the way conventional double entry accounting works.
Open list0300-7D-Capitalism

Open list0300-7D-Capitalism-AAA

A THREE (3) SEGMENT FRAMING OF CAPITAL
An approach proposed by TVM in 2016 ... simple and includes ALL of Capital
The 3 Main Segments of Capital:
... HUMAN CAPITAL;
... NATURAL CAPITAL;
... CREATED CAPITAL (which includes FINANCIAL CAPITAL)
Over a long period of time, PEOPLE have worked to create CREATED CAPITAL in order to exploit NATURAL CAPITAL to achieve a better QUALITY OF LIFE. The process has been very successful BUT in the last century the depletion and damage to NATURAL CAPITAL has the potential to make the system unsustainable. This has been aggravated by the use of MONEY and FINANCIAL WEALTH as a dominant part of the decision making processes!
MULTIPLE SUB-SEGMENTS OF CAPITAL Multiple sub-segments that are congruent with multiple units of account
HC - HUMAN CAPITAL:
(1) ... Human (Personal) Capital; and
(2) ... Social (Community / Relational) Capital.
NC - NATURAL CAPITAL:
(1) ... Land;
(2) ... Water;
(3) ... Air;
(4) ... Ecosystem Services;
(5) ... Water;
(6) ... Mineral Resources; and
(7) ... Energy Resources.
CPC - CREATED PHYSICAL CAPITAL:
(4) ... Physical Capital;
CFC - CREATED INTANGIBLE CAPITAL:
(5) ... Intangible Capital.
CFC - CREATED FINANCIAL CAPITAL:
(1) ... Financial Capital.
The main UNITS OF ACCOUNT
...... units of account for MONEY
............ one for each CURRENCY
...... there are units of account for PEOPLE
............ one for LIFE ITSELF
............ one for QUALITY OF LIFE (perhaps with further sub-divisions)
...... there will be several units of account for NATURE
............ one for LAND
............ one for WATER
............ one for AIR
............ one for Carbon/GHG/Climate
............ one for BIO-DIVERSITY
............ one for ECOSYSTEM SERVICES
In the TVA data architecture there are multiple PERSPECTIVES which are similar to REPORTING ENTITIES as routinely used in conventional accounting:
...... ORGANIZATION
...... PEOPLE
...... COMMUNITY
...... PLACE
...... PROCESS
...... PRODUCT
In addition there are STREAMS / STRANDS / STRINGS because of the importance of these in FLOWING through the SEES in a multitude of complex ways. These are ways that each of the REPORTING ENTITIES has impact on multiple capitals as the element flows through the system both in terms of space and in terms of time.

EXAMPLES
Most of the EXAMPLES do not incorporate ALL the capitals


CORPORATE GOVERNANCE ... Capitalism for the Long Term
Dominic Barton ... Harvard Business Review 2011
Dominic Barton is the global managing director of McKinsey & Company and a trustee of the Brookings Institution.
TPB Note: Several well known names in economic history and current financial economy leadership are referred to in this essay which makes the point that in the long run a business that does not deliver social good cannot exist, but in the short run all sorts of bad outcomes are possible, including issues like excessive executive pay, short term high frequency stock market trading .
Open file 11709


THE FOUR CAPITAL MODEL, MATRIX AND ACCOUNTS ... by-Bojan-Radej
Abstract:
The sustainability imperative can be translated into a claim for homothetic growth (Giraud, 1996) which equalises growth opportunities for all forms of capital: economic, social, human and natural. In order to apply this imperative, policymakers need empirical and analytically rigorous tools to present interactions between capitals as multiple and parallel. For this purpose Ekins and Medhurst (2003) compiled the four capital model based on the combined quantitative-qualitative methodology of ‘sustainability assessment framework’ that is derived from impact assessment methodology. This expert-based assessment technique is well-known in ecological and sustainable economics. The paper finds that Ekins and Medhurst applied microscopic (project) assessment approach for studying macroscopic phenomena such as development programmes consisting of tens or hundreds projects. The methodological consequence is that they could not fully utilize the potential of the model in its complexity. Thus, a more orthodox formulation is proposed which at first transforms the sustainability assessment framework into the standard Leontief’s (1970) input-output matrix from which the standard accounting tool – an integrated system of capital accounts – is derived. It is only after this adjustment of the starting model that one can tell not only how the realisation of the particular policy, plan or programme will influence each of the four forms of capital; but more relevantly, one can identify also all trade-offs and synergies that would be initiated with these policies amongst the forms of capital themselves. Recognition of these multiple relations appears as a precondition for balanced sustainable wealth creation.
http://www.truevaluemetrics.org/DBpdfs/Economics/OECD/The-Four-Capital-Model-by-Bojan-Radej.pdf
TPB Note: These four capitals are:
... Economic Capital
... Human Capital
... Social Capital
... Natural Capital
They reflect ALL the capital and are a different segmentation of the total arising from the different background of the author and the purpose of his work.
In the prevailing TVIA primary segmentation of PEOPLE; NATURE and CREATED PEOPLE BUILT CAPITAL the mapping merges Social Capital into PEOPLE and CREATED CAPITAL
At the second level Economic Capital which approximates to CREATED CAPITAL disaggregates into Created Financial Capital, Created Physical Capital and Created Intangible Capital
At a third level of disaggregation capitals are further segmented in order to reflect the manner in which the whole of the socio-enviro-economic system (SEES) works together and is interconnected in both simple and complex ways.
While the work of Bojan Radej maps neatly into the thinking associated with economists and social scientists, the TVIA segmentation maps better into the functional accounting and financial analysis associated with the corporate organization (accounting and management information) and stock markets (stock prices and financial analysis)
Open PDF ... The-Four-Capital-Model-by-Bojan-Radej

Aggregation Problem in Evaluation of Sustainable Development ... by-Bojan-Radej
Abstract: Evaluators of large-scale policy interventions have an aggregation problem (Scriven) arising from incommensurability of assessed policy impacts. Leopold et al. recognised this and left evaluation results in a disaggregated form. However, they failed to observe that cross-sectional impacts are at least weakly commensurable. Ekins and Medhurst have acknowledged this, but did not implement the finding consistently. When inconsistency is removed, fragmented results are first partly aggregated into a square input-output matrix of impacts on the meso level, and then synthesised correlatively. The aggregation problem is further studied in a horizontal perspective by extending Dopfer et al.’s classification of Meso 1, 2 and 3 sub-levels of synthesis with Meso 2a and 2b. One of our conclusions is that a precondition for neutral evaluation of complex policy intervention is not only an objective analysis of policy impacts but also a consistent synthesis of poorly compatible and value laden detailed evidence.
http://www.truevaluemetrics.org/DBpdfs/Economics/OECD/Bojan-Radej-Apples-and-Oranges-Apr-4-2016.pdf'
TPB Note: The aggregation problem is major constraint to enabling timely discussion of socio-enviro-economic performance. Financial performance is the subject of real time analysis by the investment community, but everything to do with social impact and environmental impact is not part of this conversation ... rather it gets attention once in a while whereas the financial performance is real time. I argue that a lot of data are available, but no way to aggegate. The work done here by Bojan Radej can be helpful in resolving this constraint.
Open PDF ... Bojan-Radej-Apples-and-Oranges-Apr-4-2016.pdf

Shared Value Reporting by True Price
From True Price

698 400
True Price is embracing ALL the capitals as does the TVIA initiative. The segmentation is as follows:
True Price True Value Impact Accounting
(1) ... Financial Capital; CFC ... Created Financial Capital
(2) ... Manufactured Capital; CPC ... Created Physical Capital
(3) ... Intellectual Capital; CIC ... Created Intangible Capital
(4) ... Environmental Capital; NC ... Natural Capital
(5) ... Social Capital; and SC ... Social and Relational Capital
(6) ... Human Capital. HC ... Human Capital
Open file 12899 Open pdf ... TruePrice-Integrated-Profit-and-Loss-Creating-Shared-Value-with-Integrated-Thinking

AN 8 CAPITAL CONSTRUCT
From Appleseed Permaculture

Appleseed True Value Impact Accounting
(1) ... Cultural ; CIC/HC ... Created Intangible Capital / Social Capital
(2) ... Experiential ; CIC/HC ... Created Intangible Capital / Social Capital
(3) ... Intellectual Capital; CIC/HC ... Created Intangible Capital / Social Capital
(4) ... Spiritual ; CIC/HC ... Created Intangible Capital / Social Capital
(5) ... Social Capital SC ... Social and Relational Capital
(6) ... Material CPC ... Created Physical Capital
(7) ... Financial CFC ... Created Financial Capital
(8) ... Living NC ... Natural Capital
Open file 12686



Multiple Capitals ... essential foundation for value / impact accountancy
Six Capitals ... BOOK by JANE GLEESON-WHITE
‘Six Capitals or Can Accountants Save the Planet'
Open file 13599 Open external link


A Graphic from Appleseed Permaculture
The US dollar is currency, as is the European Euro.
The Dollar and the Euro are money that serves as both a medium of exchange and a store of value
The 'currencies' described in this concept are the value flows ... often intangible ... that are associated with each of the capitals
The concept of 'complexing to' has some similarity with the concept of TVIA where the STREAM / STRAND/ STRING is one of the most important REPORTING ENTITIES because of the way PRODUCTS flow through the system having IMPACT all the time and everywhere.




The text being discussed is available at



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