Topic: Measuring value
[z3nn] is identification numbers for topics (not yet included in Topics file.
[Other material in square brackets is material that did not occur in the actual discussion, but might have occurred to me while I was transcribing the conversation.]
Started recording part way through. From that point, I have sometimes edited this to give the full exact words spoken (usually indicated by "double quotes", and there are occasional timestamps. Before then, it is more notes.
Present: AB [host], CA, JC, RG, NO, TB
# CA: written a number of things down. [CA then began going through them, and we occasionally would break off for discussion.]
# Sometimes we have to ...
[--- started recording ---]
# CA: [about one use of measuring] By measuring, I can see ***.
# These numbers help me see how I have improved, how far I have come. e.g. towards 2050 zero emissions; what are the measures I have taken. **
# Also we can look back: I have taken these measures [to change things]; am I improving? **
# They help me judge whether I am improving and what is the performance looking like? **
# Also. Example: If a bank manager, what do customers want? if he says "70% want mortgage from us", now that that is wrong because it says he is focusing only on how many mortgages I can sell. Instead he could be saying "how many customers will have a home?" Now he is not motivated only by selling that mortgage. ***
# Because some people cannot afford it. So he might say, "Think again. Now let us look at this other house, smaller houses you can afford. It's not about me trying to sell you that big house and then make up something." [z304]
# CA: That goes back to measurement. Helping us how to look at achievement, not a retribution.
# Not just about governance and achievement, but about stewardship and improvement. [z305] (This is what JC was trying to talk about before: stewardship.)
# That is the goal setting, that performance management, that budget setting, it's basically all the tools we have been looking at to see how far we have come, where we can go, what else we need to do to improve.
# AB: CA seems to saying that measurement helps us see how far we've come and how far we've got to go.
# Before CA continues, does anyone want to respond?
# NO: Compliment RG on what he went through.
# NO: thank publicly AB on summarising the 600 pages of Dasgupta. I found the summaries very helpful.
# [About what we might seek to discuss ***:] "I just wanted to share that, if we're trying to figure out how to SHEPHERD and STEWARD capital flow in a different way, that's going to be a little too much. [AB: I wonder why he said it's too much.] But to MEASURE something. to measure how people can move that capital flow in a different way could be something interesting."
# Lecture 3: Mark Carney talks about the R0. The R1, the replication of the virus - so is there a way there can be a measurement that can be attached to capital expenditures in certain areas that create an impact in the things we care about, the things that are 'good'. [z314]
# CA: You're not just talking about capital flow; you're doing a Benthamite calculus about what "we can state these things are good or bad". So, We're now trying to move capital flow and human values. (It is not an impossible task, it's a hopeful task.) [z315]
And frankly, captial flow is the only thing that actually measures those things at this point. [z316]
# That's what investment bankers do; they move human values. It's strange.
# AB: Why do you say capital is the only thing we can measure. [Actually AB had misunderstood. It's not that capital flow is the only thing we can measure but rather than capital flow is what does the measuring.]
# JC: [00:16:23]
# [AB qn? Is JC saying that (the investment banker was saying that) money is the best, or the only, measure of good? I can see that maybe at least in principle money is able to express any kind of value, regardless of whether we are aware of that value or not, because overall money indicates people's actual (financially-enabled) behaviour and choices and even beliefs underlying those, rather than what people /say/ they do or what theoreticians believe they do. e.g. Share price expresses a lot of different things and contexts because (in theory at least) lots of different shareholders with different beliefs. Further discussion: However:
- (a) is it not the case that massive shareholders like pension funds have a much bigger effect than smaller, and hence share price really just shows the beliefs of analysts and decision-makers in the pension funds etc.?
- (b) "financially-enabled" - there is a huge amount of human living and choosing and believing that is not financially enabled, so should we not recognise this in measuring them?
# [AB: But is the investment banker's view (a) correct, (b) comprehensive, i.e. the whole truth? While there might be some partial truth and even fundamental truth there, do not too many investment bankers actually allow selfishness, pride, greed and unconcern rule their investment decisions? And who says that the investment banker has a good view of what is worth putting investment into? e.g. Why have so few invested in LDNs?]
# [AB: is that really so; are there not other ways to see something is good?]
# JC: [So I was thinking] "Is there something that we could create that would be a "this impacted the ecology and economy in this way; this impacted the biodiversity of this thing in this way" Like a catchment."
# And the only thing I could think of is the R0. "Either the accuracy of the impact of this capital flow created this type of time-stamped reaction or time-stamped activity within a certain environment." We talked about that for a little bit.
# I just want to give my thoughts on what you all are saying.
# JC: [On the validity and value of certain discussions:] If we want to move capital flow and human values [00.17.53] I will love and serve and pray for all of you but I will be of no value, because I think that's an impossible task. [00.17.58]
# [==== Clarification: By "move capital flow", does JC mean "radically change our understanding of capital flow", or does he mean "move money around" or something else?]
# NO: "I don't necessarily agree. I agree with the investment banker in that what he is used to is the historical financial accounting that we do, which is transaction based [z319]*** but with the underlying assumption that when two parties get together and you buy a car for $10,000 at some point there's an agreement that that's the relative value of the car. "
# "But what we're trying to do now - and I think this is where finance has failed to come into the 21st century, is say "There is a value beyond cost" There is a value of what cost has created. "
# Example [of an alternative measure than money, e.g. the day ***]: factories: [00.19.05] "You'll see signs up saying e.g. '2000 days without a lost time injury'. Insurance companies will discount your premium based on the fact that you've had good safety procedures and no occupational injuries etc. Well, time without injury is something I can put a number to." [z320] ***
# "Or we could even say, 'A day - save so many days of the environment' and we agree that a day is worth, let's say, a day is worth $200, we can come to some standards of measurement."
[AB: Very interesting. Not just money, but number-of-days-without-injury is another way of measuring some kind of value. In this case, the biotic value, and also perhaps formative-juridical value in the sense of having procedures. Shame that NO then reverted back to money - but I think he was just fishing around in his mind for how to explain it in response to the investment banker. Can we have standards of measurement without /necessarily/ reverting to money (even though we can do so when we wish). Number-of-days is still quantitative measurement of an economic thing i.e. a resource in that a day is a resource in which to get work done that will indirectly contribute to the finances of the company. But it is not itself a financial resource. Very interesting. ] *** [z321]
# "And I think that's what we've got to try to find and get to if we want to put some value or some sense of worth into what the market is doing." *** [z322]
[AB: But what makes it absolutely imperative that I buy fashion?]
# CA: [similar point made a little later] If society says we must eat fruit and veg - it's cheaper to buy junk food, than the cost of fruit and veg.
# AB: That seems to link with what someone said about how the market works. Somehow bad things seem to be cheap. Why does system make the good expensive? Can the market be made to work the other way round so that good things can be cheaper. Or might it be that when people go to Primark and buy fast fashion, they don't actually need fast fashion, and it's just their choices? So what is it? *** [z327]
[AB: To do with people buying non-necessary things, rather than good e.g. better food. ]
# NO: "I think I mentioned the market needs to change,"
# (a) "because the market is the common control point." [z328] ***
# (b) "And I don't believe we're going to change people's values, because people's values change from day to day and week to week. 1000 or 500 years ago the Catholic Church tried to make sure everybody's values were the same. It didn't work."
# "But the market is where everything is finally adjudicated. And we do have evidence." e.g. In USA, we have taxes on tobacco and alcohol and that does affect the purchases, and the and use of cigarettes has to gone down. So these taxes have worked.
----- rg left.
# JC: Thank you for bringing that up CA. A "reinforcing mechanism with the lower cheaper goods and creating a higher demand for them. Mars candy is built on that model. Low-cost candy reinforces market pattern."
# But would CA be open to the idea of a government supplementing better foods. Instead of a penalisation or tax system, is anyone aware of a government tax structure that makes us go to e.g. Wholefoods (an organic healthy foods store in USA)? e.g. A health road system, where they supplement the roads and infrastructure, where they say "I want to make the nation's health an infrastructure *** [z329] that I invest in; I'll match that dollar for dollar the purchase of Wholefoods." Would you be up for that kind of model? *** [z330]
# CA: In UK we have free food fruit and veg initiative for kids in school. balanced diet. And now during pandemic we have packages.
# CA: If we really want not to put a pressure on the NHS because the drugs are going to cost more, we need to do something to educate people to eat more fruit and veg. You can subsidise the fruit and veg, can help the farmers. All this is going to help. e.g. a supermarkets was giving discounts for fruit and veg for people who are poor. [z331]
--- 5 pm
# NO: in USA we tried that, e.g. food stamp. Billions of dollars provided for the poor to buy food; but they load up their grocery carts with coke, pepsi, frozen pizzas, etc. and junk food. So in these disadvantaged areas: higher obesity and COPID, they don't eat right.
# NO: Reasons partly economic, partly because they don't have the mindset: convenience is more important to them than eating right [z332]
[how far is that true: for what proportion of people?]
[-- JC left]
# NO: is there a limit to what these programes can do to alleviate disadvantage? [z333]
# NO: thought RG ideas were interesting. want to read the RG's paper.
# NO: agree we shouldn't put a value on nature itself. BECAUSE that can be abused quickly. *** [z342] depending on who sets the value.
# also there are places in world that have geographic resources that others don't. e.g. grassland in USA. *** [z343]
# So, value needs to be put on WHAT WE DO. whether individually or from a coproprate perspective. e.g. what is our BEHAVIOUR. [z344]
# this is what Mark Carney was talking about: the financial world has to be more responsible for the outcome of the activity it engenders. [z345]
# grappling with how it gets measured for that purpose. [z346]
# AB: ten minutes to go.
# AB: We've been through a lot.
# AB: As christians we have been producing stuff relevant to, contribute to, economics.
# TB: yes. But the specifics of how that translates. Is there a definitive publication we can point to? See what's been submitted there.
# CA: has more to say; she will send them. AB asked CA to mention one or two.
# CA: asked QUESTIONS of myself and gave answers. [z352]
# CA: 1. One was How do we measure value:
# CA: 2. also looking at some of the surveys that have been done.
# e.g. number of people who have benefited from healthcare services. Called 'Net Promoters Score'. [z353]
# NO: heard of that
# For senior managers. For them to measure whether the decisions they are making are aligned with the organisation's value; for this they use the Quarterly Pulse Survey. e.g. how happy are you at work, or e.g ~Have I access to everything I need to perform" or "I have racognition in my role", etc. these are all examples of what the QPS looks at. Used by senior management.
# CA: 3. Also, Values: we cannot measure them, because some are matters of the heart. But we can measure them via OUTCOMES. e.g. loyalty: number of years people have been in service. [c.f. NO outcomes]
# "Latent construct", a construct difficult to measure, but we can come up with proxies to measure them. e.g. CSR, how do you measure that. e.g. the company is socially conscious, it values the environment, it is not only into profit, has a fair attitude towards competition. We have values for likability, competence, etc. customer loyalty, etc. based on proxies.
# If we can come up with these, we can come up with core virtuous values. then align them to actions. Come up with "Behavioural standards and coach" then we can have increased ethical behaviour.
# NO: add one comment. think that's great. this stuff is actually being used in commercial world.
# NO: BUT what's missing is a universal standard [z354]. the reason why finance works is that we have a dollar etc. that is the universal measurement point. So what we've got to find on the other side of equation, is a universal measurement point. e.g. an hour or day, some increment of time. if we found a standard and put them all on one hour or day. TB: one potato. MO: then that begins to allow comparability between one institution and another. [z355] ***
# NO: I'm trying to work on those new financial values.
# CA: e.g. ROI. NO: financial. CA: yes, but e.g. I am government, and I want to reduce obesity so I can put investment into fruit and veg for kids, and maybe I use subsidy to farmers. so investment to come up with outcome. So I want to benchmark this. to see if people got better or wrose. If worse, my ROI is not working for me. *** [z356]
# TB: and that would have to be wholesale. to see whether things have gone up.
# NO: so what's important about this is that the measurement we use in what's called an index. Unfortunately, we use dollars, which is a number. profits, loss, assets, liabilities. but in medicine we use longitudinal measurements. populations when we want to see improvement, we look longitudinally: we can measure the index at two points and see if IMPROVED. [z357]
# so the values we construct have to use indexes. so we need to look at an index of health. [z358]
# CA: or we can look at investment last and this year, and see how we progressed. NO: e.g. looking at the population index.
# NO: BTW the UK gove does lot better on this. looks at outcome.
# AB: OUTCOMES mentioned several times.
# CA: are we meeting our commitments.
# AB: Ending the meeting. Thank you all.
# I feel there's a gap, a bunch of issues we have not discussed.
# [We did not discuss when not to measure]
# [AB: but why do we want to see that? What's the meaningfulness of doing so?]
# TB: Christian Academic Network.
# AB: To put link round to whole group.
# TB: all comes back to finding a philosophical line that gives a meaning to e.g. metrics.
# NO: Closed in prayer. About love and wisdom. And grace.
Last Updated: 47-18 June 2021 some corrections made, ref given.