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MULTI DIMENSION IMPACT ACCOUNTING
ECONOMIC
GROWTH
A VERY BAD MEASURE OF ECONOMIC
AND SOCIAL PERFORMANCE
File: TVA-p3-00-ECONOMIC-GROWTH-151010.odp Peter Burgess (c) All rights reserved
CONTEXT
This slideset is a Work-in-Progress
and will be updated from time to time.
It is part of a series that aims to
describe the extremely complex
socio-enviro-economic system that
we live in, and how better metrics will
make this system work better.
TRUE VALUE ACCOUNTING
GDP GROWTH
The dominant metric in economic
analysis revolves around the idea
that economic growth is good …
that GDP growth will result in a better
socio-economic outcome.
TRUE VALUE ACCOUNTING
YES … in low income economies,
quality of life improves as GDP
increases. Where people are short of
the basics, more is better.
TRUE VALUE ACCOUNTING
… but this idea is invalid in countries
where inequality grows and most of
the increase in GDP accrues to a
rather small economic (or political)
elite.
TRUE VALUE ACCOUNTING
… and in high income societies,
using GDP growth as a proxy for
improving quality of life in high
income economies has been more
and more unreasonable since the
1970s.
TRUE VALUE ACCOUNTING
In the United States since the 1970s
GDP growth has increased the wealth
of owners at the expense of workers
… see this graphic:
TRUE VALUE ACCOUNTING
SunSun
BOP
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
EOP
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun
Productivity -v- Wage Compensation
TRUE VALUE ACCOUNTING
PRODUCTIVITY
Productivity has improved in an
amazing way over the past century.
Productivity determines what can be
produced with available resources.
As a result of improved productivity
there are enough products to support
a high standard of living.
TRUE VALUE ACCOUNTING
WASTE
An economy that is driven by the idea
of GDP growth is prone to increasing
production while paying no attention
whatsoever to the problem of waste.
More consumption, even associated
with more waste, gives economic
growth … but what impact on the
environment?
TRUE VALUE ACCOUNTING
The modern money system
must have economic growth to
remain viable
TRUE VALUE ACCOUNTING
… but the natural system
cannot support GDP growth
indefinately
TRUE VALUE ACCOUNTING
A major change in thinking
about economic priorities is
essential ...
TRUE VALUE ACCOUNTING
Quality of life should be the top
goal … without increasing the
quantity of product (goods and
services)
TRUE VALUE ACCOUNTING
… while maintaining nature's
ecosystems
TRUE VALUE ACCOUNTING
Investing in a better world
should be the priority … better
lives, better products and better
processes.
TRUE VALUE ACCOUNTING
Better metrics are needed so
that impact on people and
impact on planet (environment)
are measured as rigorously as
profit and money wealth
TRUE VALUE ACCOUNTING
A very large commitment to
technology is going to be
required to achieve a better
world … but it is possible, and a
huge opportunity for investors.
TRUE VALUE ACCOUNTING
Impact investing is going to be
a critical part of the capital
market over the next few years.
TRUE VALUE ACCOUNTING
TRUE VALUE ACCOUNTING
Peter Drucker, a well known
management guru famously said:
“You can't manage
what you don't measure”
An important step is to develop
and deploy a better system of
metrics, True Value Accounting
is such a system
TRUE VALUE ACCOUNTING
REMINDER
This slideset is A WORK-IN-PROGRESS. It will be
upgraded periodically. It is part of a series of more than
100 slidesets. Navigation to these is available here:
FEEDBACK is welcome. Please email to Peter Burgess …
peterbnyc@gmail.com … with a catchy phrase in the
subject line so that it gets attention, and please identify
the specific slideset(s) involved.
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=N1-Slidesets-p3
TRUE VALUE ACCOUNTING
THANK YOU
Some links and contact information:
Email Peter Burgess … peterbnyc@gmail.com
Peter Burgess LinkedIn profile
https://www.linkedin.com/in/peterburgess1
Link to TrueValueMetrics.org website
http://www.truevaluemetrics.org/
Link to navigation to other resources:
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#1
TRUE VALUE ACCOUNTING

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TVA p3 00 ECONOMIC GROWTH 151010

  • 1. MULTI DIMENSION IMPACT ACCOUNTING ECONOMIC GROWTH A VERY BAD MEASURE OF ECONOMIC AND SOCIAL PERFORMANCE File: TVA-p3-00-ECONOMIC-GROWTH-151010.odp Peter Burgess (c) All rights reserved
  • 2. CONTEXT This slideset is a Work-in-Progress and will be updated from time to time. It is part of a series that aims to describe the extremely complex socio-enviro-economic system that we live in, and how better metrics will make this system work better. TRUE VALUE ACCOUNTING
  • 3. GDP GROWTH The dominant metric in economic analysis revolves around the idea that economic growth is good … that GDP growth will result in a better socio-economic outcome. TRUE VALUE ACCOUNTING
  • 4. YES … in low income economies, quality of life improves as GDP increases. Where people are short of the basics, more is better. TRUE VALUE ACCOUNTING
  • 5. … but this idea is invalid in countries where inequality grows and most of the increase in GDP accrues to a rather small economic (or political) elite. TRUE VALUE ACCOUNTING
  • 6. … and in high income societies, using GDP growth as a proxy for improving quality of life in high income economies has been more and more unreasonable since the 1970s. TRUE VALUE ACCOUNTING
  • 7. In the United States since the 1970s GDP growth has increased the wealth of owners at the expense of workers … see this graphic: TRUE VALUE ACCOUNTING
  • 8. SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun Productivity -v- Wage Compensation TRUE VALUE ACCOUNTING
  • 9. PRODUCTIVITY Productivity has improved in an amazing way over the past century. Productivity determines what can be produced with available resources. As a result of improved productivity there are enough products to support a high standard of living. TRUE VALUE ACCOUNTING
  • 10. WASTE An economy that is driven by the idea of GDP growth is prone to increasing production while paying no attention whatsoever to the problem of waste. More consumption, even associated with more waste, gives economic growth … but what impact on the environment? TRUE VALUE ACCOUNTING
  • 11. The modern money system must have economic growth to remain viable TRUE VALUE ACCOUNTING
  • 12. … but the natural system cannot support GDP growth indefinately TRUE VALUE ACCOUNTING
  • 13. A major change in thinking about economic priorities is essential ... TRUE VALUE ACCOUNTING
  • 14. Quality of life should be the top goal … without increasing the quantity of product (goods and services) TRUE VALUE ACCOUNTING
  • 15. … while maintaining nature's ecosystems TRUE VALUE ACCOUNTING
  • 16. Investing in a better world should be the priority … better lives, better products and better processes. TRUE VALUE ACCOUNTING
  • 17. Better metrics are needed so that impact on people and impact on planet (environment) are measured as rigorously as profit and money wealth TRUE VALUE ACCOUNTING
  • 18. A very large commitment to technology is going to be required to achieve a better world … but it is possible, and a huge opportunity for investors. TRUE VALUE ACCOUNTING
  • 19. Impact investing is going to be a critical part of the capital market over the next few years. TRUE VALUE ACCOUNTING
  • 20. TRUE VALUE ACCOUNTING Peter Drucker, a well known management guru famously said: “You can't manage what you don't measure”
  • 21. An important step is to develop and deploy a better system of metrics, True Value Accounting is such a system TRUE VALUE ACCOUNTING
  • 22. REMINDER This slideset is A WORK-IN-PROGRESS. It will be upgraded periodically. It is part of a series of more than 100 slidesets. Navigation to these is available here: FEEDBACK is welcome. Please email to Peter Burgess … peterbnyc@gmail.com … with a catchy phrase in the subject line so that it gets attention, and please identify the specific slideset(s) involved. http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=N1-Slidesets-p3 TRUE VALUE ACCOUNTING
  • 23. THANK YOU Some links and contact information: Email Peter Burgess … peterbnyc@gmail.com Peter Burgess LinkedIn profile https://www.linkedin.com/in/peterburgess1 Link to TrueValueMetrics.org website http://www.truevaluemetrics.org/ Link to navigation to other resources: http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#1 TRUE VALUE ACCOUNTING