Burgess COMMENTARY

Peter Burgess

Peter Burgess
wealth metrics, broadly defined
4 messages John Thu, May 18, 2017 at 4:23 PM To: peterbnyc@gmail.com Cc: 'Sean M. O'Connor'

Peter,

Assuming you are the Peter Burgess of True Value Metrics (your website is rich in content but I couldn’t find your email there), I think our areas of interest are very similar and suggest we explore possible collaboration.

I am best known as manager and primary author of Monitoring Environmental Progress (MEP, 1995), which pioneered modern wealth metrics, while I was Senior Advisor in the World Bank’s Environment Department.

I left mainly because I sensed a global mood swing away from central authorities, and specifically the Bretton Woods model, and towards decentralized, market-oriented systems for allocating resources.

I have continued to refine wealth metrics, most visibly completing the balance sheet (including some inter- and intra-generational liabilities) envisaged in MEP and drilling down to US Counties. That work is not yet in the public domain but has a demonstrable online system in SciGaia’s Wealth of Montana project. Open external link ... http://www.scigaia.com/

I included energy related details from those wealth metrics in Montana’s Renewable Portfolio. I am now exploring possible use of wealth metrics in a new Appalachian Land Ownership study (described at Open external link ... http://www.empyreanresearch.org/blog/landownership ).

http://www.scigaia.com/montana-renewable-portfolio/ http://www.empyreanresearch.org/blog/landownership



The table gives an idea of the breadth of my new estimates. As with nation-level estimates released at time of MEP, these first results are justified only by Keynes advise: “It is better to be roughly right than precisely wrong.” These balance sheet aggregates are built up from finest grain data available for hundreds of service (and disservice) streams per County, in three tiers (V = P * Q). The Wealth of Montana variant builds stocks from flows +/- real holding gains or losses and MFP adjustments; and is designed to extract value signals (alternative futures for P’s) from stakeholders. The Appalachian version includes details like individual coal mines in Land-based Property Assets and related asset restoration obligations for active and ‘abandoned’ mines as well as Superfund sites.

http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=txt00003151

http://onlineqda.hud.ac.uk/Intro_CAQDAS/

The above focus on “Place” seems to fit the “community centric” strands of your work. I hope it is obvious even at this level of aggregation that this framework also recognizes “Planet” services. However. my impression (from your True Value Metrics website) is that your current focus is more on how to get to corporations via “Profits” or the third strand of what you and others sometimes call the 3 P’s. You may be aware of my past efforts in that direction, given your commentary on Gaia Metrics, for which I was co-founder, major stockholder, and intellectual leader. Unfortunately, I had to abandon Gaia Metrics when my second wife developed what proved to be terminal cancer; and my colleagues could not fill the gap.

That said, what your commentary discusses as SDR Data Prep was actually developed by my son, based on a ‘bleeding edge’ Computer Assisted Qualitative Data Analysis Software (CAQDAS) I developed for internal use at the World Bank, then called FIND (First Integrating Navigator for Development). A working example of SDRPrep is detailed in Ramin & Reiman’s IFRS and XBRL: How to improve Business Reporting through Technology and Object Tracking. FIND and SDRPrep blended qualitative and quantitative documents according to a very specific concept hierarchy (several thousand details in FIND, GRI for SDRPrep). What you may not know about Gaia Metrics is that it was also blending purchase accounting and GAAP using some novel metrics, partially explained in Industry Shared Value, which I presented at a Wharton conference.

http://www.wiley.com/WileyCDA/WileyTitle/productCd-1118369734.html

IFRS and XBRL: How to improve Business Reporting through Technology and Object Tracking

http://www.sustainablebrands.com/digital_learning/event-video/modeling-shared-value-industry-collaboration

The point is that I have always seen quantification or number-oriented evidence playing a crucial but limited role in qualitative or word-oriented systems designed to optimize allocation of resources. My son continues to refine our content analysis system, now called CorpusMinder and waiting from me to settle on a new concept hierarchy (based on projects like my Montana and Appalachian ventures) that will recognize and value both forms of evidence. I believe this is essential for the next generation of central authorities, after Bretton Woods. I was particularly taken with comments by GE CEO Jeff Immelt, Bloomberg interview, February 9, 2017:

https://www.bloomberg.com/news/articles/2017-02-09/jeff-immelt-on-dealing-with-trump-and-globalization

…really seismic changes … have led to this, this Bretton Woods version of globalization, breaking down into more of a multi-local world. People who see globalization from 30,000 feet in a think tank don’t know a damn thing about the way it really works. Today it’s country by country, deal by deal.

I believe the Bretton Woods form of central planning did to property assets in general what electricity did to one—coal. Like Sorcerer’s Apprentices, they made systems increasingly efficient at producing what was decreasingly wanted. More technically, over-supplying a factor of production drives down its price relative to others. This favors innovation elsewhere, often to work around quaint premises of ‘the’ plan. Since quaint information system lack feedback loops for signals of changing production possibilities and consumer preferences, the result is bewitched brooms: assets that eventually yield more detrimental than beneficial services. Bewitched brooms have left coal mines and power plants as stranded assets and hollowed out central authorities via Base Erosion and Profit Shifting.

https://en.wikipedia.org/wiki/Stranded_asset

http://www.oecd.org/tax/beps/beps-about.htm

The solution is ‘smart grids’ that rely on decentralized resources as much as possible and resort to central allocations as the base of productive processes. The value added by central authorities is then their comparative advantage managing the ICT required by such smart grids. Paraphrasing Immelt, sustainability requires Multi-Local Analytics. This is my current unifying theme. My highest hope is to engage ICT partners pushing cognitive computing, say another application of IBM’s Watson.

http://whatis.techtarget.com/definition/cognitive-computing

If this quest sounds like it might interest you as well, I would appreciate a response in kind, about your current interests.

Cheers,

John C. O’Connor