DIALOG - TPB - AL - JK - OT
About the development of True Value Acccounting / Multi Dimension Impact Accounting
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Food for thought ... intellectual nourishment!
Peter Burgess / Alan Longley /John Kiehl / Olinga Ta'eed
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Alan Longley / John Kiehl / Olinga Ta'eed
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John Kiehl / Alan Longley ... February 1, 2017
Happy New Year ... and thanks for this dialog. It makes a pleasant change from the 'news' in the media!
From Peter Burgess 10:30 PM (12 hours ago)
Dear Alan
I missed this message last week ... I remember some of this discussion ... and got quite involved with trying to understand the work of Chris Cook at the time. Chris Cook got me thinking about the idea that we have a 'property ownership culture' when in fact we really need an culture around access to the use of a thing or a service. This predates ideas like the sharing economy ... Uber / AirBNB / etc.
My thinking about how this system fits together is emerging, though I still find it difficult to describe succinctly ... but I keep trying:
I am getting clearer about how all the pieces fit together yet. I think in terms of 3 segments of the system working together
(1) PEOPLE
(2) NATURE
(3) PEOPLE BUILT SYSTEMS AND STRUCTURES (PBS)
Everything will fit into these three segments
PEOPLE are the primary PURPOSE for every activity in the economy and in life
NATURE is the underlying foundation and support for everything
PBS is everything that humankind has done to make activities easier and more productive.
The key metrics for PEOPLE is QUALITY OF LIFE and the value of LIFE ITSELF. A wide range of issues feed into QUALITY OF LIFE. There is COST OF LIVING and all sorts of PRODUCTS (goods and services) that support QUALITY OF LIFE.
There are a number of separate key metrics for NATURE including LAND, WATER, AIR, CLIMATE SYSTEM, BIO-DIVERSITY, ECO-SYSTEM SERVICES. There is a vast amount of work at the scientific level on this ... but it is difficult to assimilate into a better metric for management.
The key segmentation for PBS involves three sub-segments:
(1) FINANCIAL CAPITAL
(2) PHYSICAL CAPITAL
(3) INTANGIBLE CAPITAL.
Each of these can be expressed in terms of MONEY CURRENCY and a range of other VALUE or IMPACT CURRENCIES associated with PEOPLE and NATURE
PERSON: The VALUE of a PERSON should not be expressed in MONEY CURRENCY terms, but in a measure that is defined independently. The components of VALUE for a PERSON include the value of LIFE ITSELF and the STATE of a PERSON in terms of QUALITY OF LIFE, COST OF LIVING and CONTRIBUTION to making the world a better place.
ORGANIZATION: The profit progress and performance of a for profit corporate ORGANIZATION can be described quite well using conventional accounting and in terms MONEY and using information set out in a BALANCE SHEET / STATE and a PROFIT AND LOSS ACCOUNT / FLOW-ACTIVITY. The impact / value add / value destruction progress and performance of an ORGANIZATION should also be expressed in a similar way using all of the metrics associated with PEOPLE and NATURE.
PLACE: A very similar approach can be used for a PLACE. A PLACE aggregates in much the same way that an ORGANIZATION consolidates. The progress and performance of a PLACE needs to be expressed in terms of aggregation of many elements of the STATE and the aggregation of the many elements of the ACTIVITIES
PRODUCTS: Yet again, PRODUCTS can use a similar set of metrics. PRODUCTS are important because they flow through ORGANIZATIONS and PROCESSES and PLACES and eventually are used by PEOPLE in support of their QUALITY OF LIFE.
PROCESSES: PROCESSES are used to produce PRODUCTS. There may be many PROCESSES in an ORGANIZATION. There may be many PROCESSES used in a SUPPLY CHAIN to produce a PRODUCT. There may be many different PROCESS located in a PLACE.
The money accounting for an ORGANIZATION includes money numbers for FINANCIAL CAPITAL, PHYSICAL CAPITAL and INTANGIBLE CAPITAL. Better metrics require numbers to reflect an accounting for the STATE of PEOPLE and the STATE of NATURE and the IMPACT on PEOPLE and the IMPACT on NATURE.
Conventional money is a unit of account that is both a store of value (capital) and a value exchange (flow). The plan here is to have several units of account that can be used to number state and flow for all the capitals.
A PERSON, an ORGANIZATION, a PLACE. a PRODUCT and a PROCESS can all be described using these units of account a consistent architecture for the accounting and for the reporting of all the entities.
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This is pretty dense ... but I think it is fairly complete
All the best
Peter
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Alan Longley / John Kiehl / Olinga Ta'eed
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Initiatives
FAVORS / Favors: the Main Idea ... dialog with Alan Longley
Favors: the Main Idea
Favors would be a mobile app that weaves a better, fairer, stronger social fabric. It would look and function like a marketplace / ecosystem app, a platform to help users exchange the type of
free services we already refer to as “favors”. Imagine two roommates. Gina just invited a date over for dinner and now she needs John to clean the apartment. John and Gina agree on Favors that “urgent apartment cleaning” is worth 50 points. Once the favor is marked complete, John has proof that Gina owes him 50 points in favors. Favors would act as a ledger so that Gina’s future efforts at reciprocity could be logged and reconciled with her debt. In other words, Gina could quite literally (and precisely) repay the favor.
Favors would also function as a social network. Instead of exchanging thoughts, jokes, or links on this network users would exchange real meaningful favors. Part of the company strategy would be guarding the meaningfulness of what happens on the network. To keep things kosher, users could block someone who asks for deplorable favors, and a “report abuse” function would be honored. To keep things engaging, well, a ton of things could be done; see “Beyond the MVP” section for some initial ideas.
Minimum Viable Product (MVP)
Upon beta release, the iPhone app would have no revenue stream. It would provide the following services for free to you:
Accounts -- helps you set and reset username, password, avatar
Network -- lists who you can exchange favors with, and offers ways to:
o search for a user by name
o request to connect with a user
o disconnect from a user
Report Abuse -- you can block other users for requesting deplorable favors
Register -- tools for you to track the states of a transaction
o User A describes the favor, sets a price, sends request to connection(s)
o User B agrees to do the favor at listed price, marks when favor is complete
o User A confirms that the favor is complete
Notifications -- you can view and respond to:
o connection requests
o favor requests
o new transaction statuses
Ledger -- dynamic list of your creditors and debtors, complete transaction history
What Problems would be Solved by the MVP?
Faulty Memory
When you need a favor, it’s hard to remember who owes you one.
When you do someone a favor, you might not get credit for it. They might deny that you did the favor. Or you both might forget.
Injustice
Overly-nice people tend to return small favors with big ones.
Overly-selfish people tend to pay back big favors with small ones, or don’t return favors at all.
Money is Boring
Returning a favor invokes positive emotions and mystical ideas like karma and vasana.
Paying for a favor with money kills the magic.
Beyond the MVP
Quilts
Favors could work as a platform for engaging local, smaller-scale groups. Since the app attempts to “weave a better, fairer, stronger social fabric”, call them Quilts. Corporations might weave a Quilt for employee engagement. Schools might weave a Quilt for classroom engagement. If this service was monetized as a subscription, we could provide Quilts with analytics on social capital: metrics on how reciprocity, trust, and cooperation are exhibited by their group. These analytics would be drawn from actual behaviors, rather than from responses to some cheesy “Great Places to Work” survey. For those Quilts that rank highest in social capital, these analytics would be a badge of honor; we could publish “Top 100 Quilts” on our website; another great way to market the app.
Kredit Scores
In future iterations of the app, we could incorporate the ability to forgive debts. Kredit Scores would be a verifiable index of the user’s generosity. Someone with a very high Kredit Score would have forgiven a lot of debts (or perhaps a few very big debts) within Favors. Because the app would be built on the blockchain, there would be no feasible way to game this system; a high Kredit Score would provide a true sign that someone is a generous benefactor. If John is feeling generous, he can use Favors to forgive Gina’s debt. In addition to cancelling the 50 point debt, Favors would publicly give John +50 kredit points as a sign of his generosity.
Tribes
In future iterations of the app, we could incorporate the ability to view favors that are requested by local strangers (users who live near you, but are not connected to you on the app). This would enable Favors to be a humanitarian tool. Church groups, boy and girl scouts, and other orgs might use Favors as a way to reach out to their local communities. If one of these orgs formed a Favors Tribe, then their members could do favors in its name. Any favors done in the name of a Tribe would be automatically forgiven, and the Kredit points would go to the Tribe.
Imagine a worldwide race where all Favor Tribes compete to earn the most Kredit points within a specified month; we could publish leaderboards on our website; this would be a great way to market the app.
Value Proposition and Revenue Model
Favors could flourish either as a standalone marketplace (similar to Uber and Airbnb), or as a plug-in to intranets like Igloo and Zoho. On the one hand, if the app worked as a standalone marketplace, the primary revenue stream would be from data marketplaces; our buyers would receive behavioral profiles generated by user activities within the Favors marketplace. On the other hand, if the app worked better as an intranet plug-in then we would use a typical SaaS (subscription-based) revenue model; accounts would be referred to as Quilts; users would receive social capital reports.
Exit Strategy
If Favors succeeded as a plug-in on platforms like Igloo or Zoho, those platforms would likely acquire the app. Alternatively, if it flourished as a standalone marketplace, Favors would become an attractive addition to the suite of social-service products offered by groups like Uber, Airbnb, and Facebook.
Total Addressable Market
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Alan Longley
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Peter Burgess
February 2, 2017 ... 11:44 AM (1 hour ago)
to alan
Dear Alan
I have been reviewing some of your old messages (and not so old). When I reread this particular material it clicked that something like the FAVORS app would serve well to build something akin to a 'market' that would determine the value of a lot of intangible things that do not have conventional intrinsic money pricing.
Harlem Grown
At a meeting on Tuesday I tried to describe a payment mechanism that would help a not for profit serving very low income beneficiaries. The problem to be addressed is that people who benefit from a variety of social welfare programs lose ALL their benefits if they work hard and then go over a wage cap ... a terrible disincentive for people to build up some better earning potential, savings and then continue working to climb out of poverty.
I suggested that people should be able to work at Harlem Grown as long and as valuably as they can ... and the value of all the work should be recognized. They should only be paid a wage that is lower than the cap being imposed by all the rules / regulations of the social benefits. They should be credited with the difference to a savings account denominated in GOOD (something like the FAVORS points)
One of the similarities between FAVORS and my accounting for GOOD in this instance is that the money equivalent value of the transaction is determined already. The missing piece of the ecosystem is a 'ledger' to record the transaction and keep track of it.
One can envision a system where the balance in the GOOD account can be used as a backing for a loan in MONEY which can then be spent in the normal way.
Unfortunately there are potential legal implications surrounding this which might nullify the idea making the avoidance of the social welfare cap null and void. This is a legal matter beyond what I know.
Alternative Currencies ... Smart Contracts ... Complex Markets ... Unit of Account
I cannot really understand how the Olinga currency initiative makes a difference absent associated transactions that produce meaningful value add. If the idea that the Olinga currency serves as a replacement for money currency that we are using at this time ... the dollar, pound, Yen Euro etc. I can see it serving as a replacement simply because the blockchain is more efficient, but the legal hurdles to deploying this would likely be huge. In the end don't the established banks still win?
I think it is the Unit of Account that is the key to my better understanding of how everything has to work, including a Multi Dimension Impact Accounting / True Value Accounting. Some of this is a little bit like the IMF and its basket of currencies and its special drawing rights ... or the old EU currency the ECU (European Currency Unit) that was also a basket of currencies all with separate exchange rates relative to the ECU.
I think the basket of units of account that we need are (about 10):
PEOPLE (life, cost of living, quality of life)
NATURE (land, water, air, climate-carbon-equivalent, bio-diversity, ecosystem services)
PBS - FINANCIAL (money)
PBS - PHYSICAL (basket of units of account)
PBS - INTANGIBLE (basket of units of account)
This is not particularly well articulated ... which is not surprising given the complexities that really and truly do exist
Peter
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