Personal Blog of Joe Brewer

Want the Power of a God? Become an Accountant!

In Complex Systems, Human Behavior, Semantics and Perception, Social Change on March 29, 2012 at 12:01 am

Have you ever wanted the god-like power to create entire worlds?  Wondered what it feels like to destroy a universe with the flick of your hand?  Then become an accountant.  That’s right, you heard me.  The Great Creators (and Destroyers) of reality are the people who define what is worthy of measurement.

Consider this:

Current wisdom says that the amount of global economic activity is the total of Gross Domestic Production (GDP) for all countries in the world.  This number tells us how much value is created each year through productive activity.  And yet none of this activity would be possible if children were not born, raised by devoted parents, and educated by society.  The most essential “productive” activity performed by humans is parenting. And what is the net economic value of parenting?  Zero.  Zilch.  Nada.  It doesn’t exist as far as economists are concerned.

And how do we know this?  Because it doesn’t appear on the accounting books!  Being a mother has no economic value — at least not according to the accounting schemes used by macro economics today.  This sweeping power to make massive value-creation disappear is wielded by accountants every single day.

How Measurement Defines Reality

What we take to be real is largely determined by what we are able to perceive.  If something doesn’t arise in awareness, we behave as though it doesn’t exist.  This little feature of human experience is what makes measurement so important.  Our sensibilities about what is real and knowable are shaped by the existence of interpretive frameworks and the data streams that reinforce their “realness” in our lives.

As an example consider the cost of gasoline.  The visible marker we use to assess total cost is the displayed price per gallon (the current price in Seattle is $3.89).  This tells us how much we’ll have to pay if we want to fill up our tank and take the car for a spin.

What is hidden by this perception is the vast infrastructure that makes gas available to US citizens.  Getting that gas to the pump required:

  • Massive subsidies to oil companies;
  • A global military presence to protect supply lines;
  • International agreements with oil producing countries;
  • Neglect of environmental impacts;
  • Roads and ports funded by taxpayers;
  • …and so on.

So what is the true price of gasoline?  Whatever it is, it’s a LOT more than four bucks!  (I’ve read estimates as high as $24 per gallon.)

We don’t directly experience the hidden costs of oil refinement and distribution.  From this experiential perspective these costs simply don’t exist — a cognitive blindness keeps us from seeing them.  So how can the public engage in meaningful discussions about energy policy?  Clearly, a different kind of measurement is needed to make the true cost of “business as usual” visible to the public at large.

Half Truths and Political Agendas

Measurements can be used to intentionally conceal information, as part of PR campaigns intent on creating a particular public perception of unfolding events.  Numbers can be defined to elevate one class of data while obscuring another.  A powerful example of this is the death toll presented to the public throughout a military campaign.

During the invasion and occupation of Iraq, for example, a measure of “US soldier casualties” was used as the proxy for total deaths arising from the conflict.  The citizenry was constantly reminded of fallen heroes and the debt we are reminded that we owe to them.  This framing of events did much to conceal larger patterns of human suffering and moral culpability by various actors involved in the war effort.  Iraqi soldiers were not included, nor were civilian casualties.  These numbers were intentionally excluded for several obvious reasons, all contributing to the need for media narratives to promote an appetite for war among the populace.

This ability to use numbers as a political tool is well known.  It has been commonplace throughout military and political history.  And yet the role of accounting schemes to shape public perception remains unconsidered in standard commentaries about current events.

The power of accountants remains largely hidden from view.  Just as the Enron scandal demonstrated how cooking the books could create perceived value among financial investors, so too can accounting metrics shape the perception of value for politically motivated agendas.  We saw this with the occupation of Iraq (using measures like the death toll I just described).  And we saw it with the puffing up of “junk bonds” in the build-up to the financial meltdown of 2008 (where metrics were used to imply that derivative stocks were more secure, and thus more valuable, than they actually were).  The ability to establish the perception of value is fundamental to maintaining power and control over society.

Measurement tools can be misleading by design.  And so special care must be taken to deconstruct and analyze the semantics of societal metrics to ensure that they are worthy of the legitimacy granted to them.  Just as frames and metaphors need to be considered for their strategic import in communications and engagement, so too must they be dealt with in the use of metrics that shape public policy and social behavior.

Real-World Complexity and the Wall of Ignorance

Even when there is no overt agenda to obfuscate and confuse, the cognitive blindness to hidden realities inherent in social measures can have a devastating effect.  The Japanese tsunami of March 2011 made visible — in a catastrophic way — the hidden linkages between tensions built up in the ocean floor across centuries and the thermal core of a nuclear power plant standing in a valley that would become a flood zone when disaster struck.  The inability to measure real-world risk and adequately prepare for it caused the deaths of more than 20,000 people and released radioactive debris into the world’s atmosphere and oceans.

A Horizon of Ignorance stood between the stewards of public safety and the complexities of the real world.  This absence of knowledge about systemic risk plagues the world today.  Our evolutionary make-up as humans, which gave us the cognitive machinery that blinds us to our own meaning-making process, places a perceptual layer of semantics between our understanding of the world and its actual make-up.

This problem is pervasive in attempts to characterize the harms associated with climate change.  Perceived threats are filtered through the multiple lenses of belief systems, familiarity (or lack thereof) about climate science, and emotional capacity to ponder its implications.  The true scope of harm is very difficult to assess.  Even the experts struggle to understand the full complexity of planetary climate.  And the public remains incapable of cultivating system-level responses to the broad risks that climate disruption brings to the table.

The absence of measurement tools for societal resilience only serve to exacerbate this situation.  We cannot depend on GDP and gas prices at the pump to tell us how we should collectively respond to global change.  Nor can we merely let status quo actors dictate the terms of public debate about what is worthy of being measured in the first place.

How shall we leverage the power of accounting to make visible those risks that are well known?  And how can we construct appropriate measures for the unknowns that lurk beyond our awareness?  Will cognitive blindness keep us from mounting an effective response?  The jury is still out on this one.  Much remains to be done if we are to both understand the semantic processes that keep us from grappling with real-world complexity and also continue to advance our knowledge of what are truly enormous technical challenges for humanity on the global stage.

I just hope that more people will familiarize themselves with the power of measurement as a key feedback of public perception.  We can’t address problems we are unable to see.  And we can’t see through the political agendas of existing measurement systems until we take seriously the implications of cognitive science for shaping what we take to be reality.

So there you have it.  Accountants hold the power to create and destroy worlds.  As more of us step into the role of measuring social value, we must wield this power with great care.

The future of our species may well depend on how skillfully we employ it.

  1. I really like that you’re calling attention to what in economics is called ‘externalities’ – the idea that there are many transactions where not all costs/benefits are clear directly in the transactions but are born by external parties who have no say in the transaction. In one example: the costs born by tax payers/soldiers/the environment are externalities in every gas purchase. While I strongly agree that encouraging more people to measure these externalities and show people the hidden costs in transactions, it’s a mistake to conflate this with accounting. Accounting rules are determined by politics, not accountants or reality. At times this seems to conflate ‘cooked books’ with the concept of externalities, make the issues even confusing. I agree with the general premise here: make it clear what the externalities are – I couldn’t agree more! I think what you want, however, is for there to be more general economists willing to do basic research tracking down and quantifying externalities.

    • Hey Peter,

      Totally, and there’s a lot that visual designers can do to create infographics that make these externalities vivid and easy to understand.

  2. Hey Joe, I love this piece for so many reasons! I am excited to work with you to create new measures of value.

    I agree with Peter re conflation of externalities and accounting, and I feel the opportunity here is to define new metrics of impact and accountability. You get results based on what you measure. We need some new collective metrics of cultural intelligence as we assess the impact of the new economy.

  3. [...] what we take to be real in many respects becomes so as a self-fulfilling prophesy.  We each have the power to be accountants — defining “the real” by choosing what to measure and imbuing it with [...]

  4. Very exciting to have discovered this site from your essay that appeared on Common Dreams 12/20/12; so glad to make your acquaintance!

    Your Venn diagrams illustrate the way our fixation on numerical digits can conceal the true proportionality, in context, of what’s being measured and attended to in isolation from its context. Another move to make, substituting this whole-picture imagery for our traditional linguistic/linear thinking, is to point out that FINITUDE can be appreciated in this way. As long we conceptualize “economic growth” as a march along the number line that extends to infinity, we remain unaware that there really are “limits to growth”–limits to the amount of “material resources” we humans can plunder, limits to the size of a sustainable human population on a finite planet. The implications of these two different ways of framing the social reality we perceive should be appreciated as significant within cognitive science as a discipline.

    I also have a comment on the use of the term “externalities” within economic discourse. The referent of these supposed “externalities” is in fact the real, physical world–the biosphere that supports our lives, the complex climate system of the planet Earth, the intricate interweaving of relationships among different species of living organisms. These are “external” only to a kind of abstract, conceptual game played with numbers that, rather astonishingly, has become the conscious focus of a large percentage of mankind to the exclusion of the concrete reality they actually depend on for survival. One would think it would be relatively easy to “pop the bubble” that constitutes this strange belief system, but at present it is held in place by ongoing social resonance within many human minds. As we become more aware of our “social ontology,” we should at the same time become enabled to wake ourselves up from some of our more deleterious shared illusions. At least one might hope so! Keep up the good work.

    • Hi Ronnie,

      I’m so glad you enjoyed this article. Your comments are spot on and completely aligned with the underlying conceptualization processes at work that conceal these very important truths. Thus the need for both knowledge of human psychology and design skills for visually communicating key truths that all-too-often remain hidden in our cognitive blind spots.

      Very best,

      Joe

  5. [...] we take to be real in many respects becomes so as a self-fulfilling prophesy.  We each have the power to be accountants — defining “the real” by choosing what to measure and imbuing it with significance.  In [...]

  6. [...] what we take to be real in many respects becomes so as a self-fulfilling prophesy.  We each have the power to be accountants — defining “the real” by choosing what to measure and imbuing it with significance.  In this [...]

  7. [...] we take to be real in many respects becomes so as a self-fulfilling prophesy.  We each have the power to be accountants — defining “the real” by choosing what to measure and imbuing it with significance.  In [...]

  8. [...] what we take to be real in many respects becomes so as a self-fulfilling prophesy.  We each have the power to be accountants — defining “the real” by choosing what to measure and imbuing it with significance.  In this [...]

  9. [...] we take to be real in many respects becomes so as a self-fulfilling prophesy.  We each have the power to be accountants — defining “the real” by choosing what to measure and imbuing it with significance.  In [...]

  10. [...] social systems there is an additional layer of interpretation that makes it difficult to know if what we measure is real or not.  This is the main reason why complexity research has not been done as much for social systems [...]

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