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Date: 2024-06-23 Page is: DBtxt003.php txt00006761

About MDIA
Message to Lana

What is MDIA? A Very Short Answer to a Big Question

Burgess COMMENTARY

Peter Burgess

Lana ... this is a short answer to a big question. I am trying to pull from my old academic training and some very real world experiences to design an accounting system that will work for society and the broader economy in the 21st century as well as the double entry accounting construct that has worked for financial control for so long in the business world.

I argue that the underlying purpose of all economic activity is for people to have a decent and improving quality of life. That is really what economic activity ... work ... is all about. Appropriate reward and incentives need to be a part of the system, but the underlying purpose should not be forgotten.

In accounting, profit may be computed using the transactions and building a profit and loss account. it can also be computed using the change in the balance sheet.

MDIA uses a similar construct. Improvement in 'state' over time is progress ... and a big part of the metrics of 'state' are metrics associated with 'quality of life'. There is still profit, which is a reward for the use of capital, but there are all the other components of society and the economy ... not just the summary components of the triple bottom line (profit, people, planet) but all the big sub-components that go beyond these three.

These are the 8 MDIA sub components: 1)

  1. Profit - Organization - Economic activity
  2. 2) People - Individual - Family - Friends - Community
  3. 3) Product - Supply chain - Use - Post Use Waste Chain
  4. 4) Planet - Resource Depletion - Materials - Energy
  5. 5) Planet - Environmental Degradation - Land - Water - Air
  6. 6) Built Environment - Infrastructure, Buildings, Plant and equipment
  7. 7) Enabling Environment - Governance, Rule of Law, Taxation, Organizations
  8. 8) Knowledge - What we know
The metrics associated with all of these components can be summarized for different decision making purposes
  1. 1) Summary by organization ... for the stock markets, etc.
  2. 2) Summary by place ... for decision makes in a locality ... where profit is earned, people live and work, product is produced and bought and sold
  3. 3) Summary by person ... to help individuals, families and communities to make better decisions
  4. 4) Summary by product ... to help buyers (consumers and intermediaries) to make better buy decisions
In each of these 4 cases the analysis and reporting incorporates metrics about all of the 8 components described above.

I have a lot of work to do to 'finish' this project ... but it is taking shape quite well after a very large number of false starts and missteps. I am very excited about the possibilities that modern Big Data is opening up ... but so far not much of the data being swept into the big data stores is very relevant to solving what I see as the really big issues of our day. I am optimistic that in a fairly short time that this will change ... but that is something else!

Hope this helps

Peter Burgess - TrueValueMetrics
Multi Dimension Impact Accounting

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