image missingTrue Value Metrics (TVM)
Meaningful Metrics for a Smart Society
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Date: 2017-10-23 Page is: DBtxt001.php L0700-CL-01-Value-Destruction


VALUE DESTRUCTION

When it comes to economic metrics, the only value destruction that is accounted for and reported is that which pertains to corporate performance and the wealth of investors.
This is a big problem because it results in a dangerous distortion of the performance of the socio-enviro-economic system as a whole.
Natural disasters
Natural disasters result in huge value destruction. The way these are accounted for in typical GDP computations means that the costs associated with remediating the damage is considered a positive, while the value of the damage to physical structures, the society and the environment are ignored.
Using conventional GDP thinking the results of Superstorm Sandy had a good outcome because they boosted GDP ... whereas the reality using an accounting that recognises all the impacts, the storm was very damaging.
War
War result in huge value destruction. The way these are accounted for in typical GDP computations means that the costs associated with waging war are considered a positive, while the value of the damage to physical structures, the society and the environment are ignored.
The civil war in Syria has resulted in massive value destruction.
The value destruction associated with the killing and maiming of people is not accounted for in any meaningful way using conventional reporting methodologies. But the value destruction associated with the death of some 400,000 people, many of them young, is massive. There is an urgent need for a way to bring the value destruction associated with death and disablement into account in an easy rigorous way.
The value destruction associated with societal disruption and millions of people having to flee their homes and seek refuge elsewhere either within the country is internal diplace persons (IDPs) or as international refugees. Again there is the need to have a way to bring this value destruction into account.
The value destruction associated with the damage to buildings and infrastructure is very visible, but accounting using conventional methodologies is missing. The value destruction is clearly very substantial.
Using conventional methodologies for economic analysis and reporting, the costs being incurred are included in measures like GDP, and other statistical data like trade data. These costs are considered to be economic product and added in. Meanwhile, there is no deduction for the value destruction that is the bigger number but ignored in conventional analysis.




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