A Framework for an all-encompassing Global Systems Accounting — Accounting for Basic Needs

Photo by Kelly Sikkema on Unsplash

As part of ebbf’s “Global Systems Accounting” #ebbfmember Gijs van de Fliert shares insights from one of the 10 tracks: Accounting for basic needs.

“After COP26 Arthur Dahl proposed a drastically new approach to accelerating progress to address the #climatecrisis.
He laid out an evolving framework for an all-encompassing Global Systems Accounting to a group of economists, future-explorers, entrepreneurs, students and passionate environmentalists.
Following the presentation, co-collaborators divided themselves into working groups to consult on the design of measures relevant to construct such a framework. However, before we elaborate on these measures and the initial journey of co-creating them, in my case for the “Basic Needs Accounts” measure, let me introduce the reason for such an initiative.

As we can all observe, our world has become a single economic system, while remaining socially and politically fragmented.

Likewise, its current accounting, which only measures those aspects of our economy that can be accounted for in monetary terms, is sorely defective, and it is driving humanity and the earth of the cliff, so to speak.

By not accounting for all measures in some form or fashion, we make poor business and life decisions because of incomplete and flawed facts.

For example, how can we decide whether a venture will be profitable if we do not account for the entropy of non-renewable energy?
What about water resources, if we do not account for its full replenishment? What about the quality of the air, of waters and land, if we continue to dump, dispose and pollute indiscriminately?
What about the quality and quantity of our food resources, its biodiversity that are the cornerstone of the human, animal, plant and mineral kingdoms’ survival?
How can we continue to produce and consume more than what the finite earth resources are able to provide on an ongoing basis?

Indeed, the planet earth has a fever, its body is full of dangerous toxins, however our quest is more than righting the balance and making the earth and its inhabitants and its eco systems viable again.

No mere set of accounting rules to measure all aspects of our business ventures could right this wrong.
What is needed most of all is a transformation of the heart, one founded on spiritual and moral principles, we all have innately the potential capacity within us.
However, often we hide those virtues behind the face of rationalizing our decisions based on our own need. For the transformation to occur, It requires of us the recognition of the oneness of humanity in all its diversity, that no one should exalt oneself over the other.
That the suffering of one is the suffering of all; that our individual prosperity is dependent on the true prosperity of the whole. In fact, recognition is needed that our humanity is holistically interconnected with the life on this physical planet earth.

So, as said, we broke up into groups to co-create those measures needed to become part of an evolving framework for an all-encompassing Global Systems Accounting, so that our business and life decisions may be fully informed of all impacted aspects. These account measures comprise two groups: (i) Environmental Accounting, and (ii) Social and Economic Accounting. The former group includes carbons, biodiversity, pollution, while the latter includes: basic needs (minimum living standards and relationship to wealth), food, health, work and employment, knowledge and education, and spiritual capital. All these measurements combined should lead to this evolving framework for a new global definition of wealth. So let us look at one working group’s beginning journey on the measurement of Basic Needs.

Basic Needs Accounts — a working group journey

Where does one begin to describe a measure of basic needs, one that might define minimum living standards and the concepts of wealth, acceptable and excessive, all over the planet.

As indicated, the limitation of the current measurement system has been to try and measure poverty and wealth only in monetary terms.

Could wealth or lack wealth be truly captured by a single amount on a bank statement? I think not.
To escape such a limiting trap of financial measures, we need to, as Arthur Dahl explained, redefine poverty and wealth in non-monetary terms, using a measurement of wellbeing that meeting basic needs for all can produce, as well as measures the harmful impacts that can come from too much wealth and overabundance of goods and assets in the hands of the privileged few.

Let us be clear before we continue, this measurement does not seek equal reward and benefit for all. Nor do we condone asceticism or consider some wealth as inherently distasteful or immoral. There is a natural order and rank in human society that is healthy when driven by differing rewards of each human beings’ capacities, temperaments, and talents. It may also be driven by location and circumstances where one lives. However as we see in todays society, the Basic Needs measurement goes deep into negative territory when the gap between wealthy and poor continues to widen exponentially.

The principle enunciated earlier, a positive Basic Needs Account balance, or social capital, would be reflected in every human being having a guaranteed minimum income to meet basic needs. A social safety net without any conditions such as nationality, handicap, or migration status. On the debt side of the account would be statistics on poverty, as well as excessive wealth.

Our vision of prosperity is not based on a GDP per capita or for a country number but must instead be found in each human beings’ purity of motive, rather than self-interest; it must be evidenced by collaboration driving true progress rather than thru competition; it must be seen in the worth of an individual in terms of virtue and service rather than consumption and accumulation of wealth.

There are several aspects of wealth that deserve further elaboration. One is how wealth is acquired. While wealth acquired thru work and service is praiseworthy, inherited wealth has a negative (debt) effect on our Basic Needs Account.

Other aspects of wealth that would need to be considered is what would constitute appropriate housing or other assets for a person, family, or business. And at what point becomes one’s housing opulent? Aspect of our urban reality such as urban sprawl may impact this as well. What can humanity contribute to living more in moderation also reducing the cost to our environmental accounts, i.e., living with the means of the finite resource of planet earth.

What about wealth accumulation within corporate entities, where large amounts are accumulating? Often, there is no care for the sick, ailing, and those who are fired from their employment.
They all become wards of the government and its fragmented social programs.
Without proper taxation, most governments in the world are in debt, while the gobal private sector often wallows in wealth. How is that for disparity?

If you have read this far, you will have noticed many questions, some spiritual principles, identification of measurement aspects with few solutions yet. Wherever this journey takes us, it must be predicated on the need for individual transformation of our hearts for a prosperous society to slowly awaken and mature within an evolving framework for an all-encompassing Global Systems Accounting.

W. Gijs van de Fliert

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