Growth is perhaps the most important metric in the modern economy, but it is a very bad measure of economic and social performance for many reasons. More does not mean better. Quality has value as well as quantity. In a shortage environment more does mean better, but that does not hold when there are endemic surpluses. A more does not mean better when there are constraints such as those that are posed by environmental issues. The system is complex and better metrics are needed in order to get the best possible results.

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