Better Metrics of Businesses for Policymakers

t2 Marketing, accessed 5/23/2018

It goes without saying that which metrics that are used and the normative values that are taught are key aspects to determining what actually happens in a social group. One of the major points of my growing thesis is that private sector companies who provide services for a profit in the economy have too narrow a focus to be adequate at making decisions in the society without over-arching rules, regulations, and oversight. The metrics that are used to determine a company's individual health and well-being are not adequate or useful for determining the real health and condition of the economy. While I agree that these rules and regulations need to be made in conjunction with the business interests, they also need to be made independently of the financial profit making logic that governs businesses. To this end, the metrics that are used by businesses and policymakers need to be related to different things in order to generate more desirable effects within the social group.

Business and private companies use metrics of profitably and size in terms of revenue and/or employees, with normative values that larger profits are better regardless of the costs that are incurred by others and the environment. That's how we get counts, such as the number of "unicorn" businesses (a company valued at over $1 billion), or the number of millionaires and billionaires per capita as one potential indicator of the economy's health. While these numbers may reflect on how well the economy is going for those individuals and companies, they do not reflect any of the actual value that businesses may or may not be adding to the economy, nor do they show real conditions that are being experienced in the society at large. From the policymaking perspective, such metrics are inadequate measures of an economy's health and well-being.

For policymakers, it is better to look at how well companies do the services they're aiming to provide, and what kind of impacts they have on society and the environment. Better metrics for policymakers help understand the quality and value of having that company or industry in the midst of the larger social entity and ecosystem. For example, a coal power plant may supply the coal mining industry with demand for their goods and electricity for the rest of the economy. However, when one considers the environmental impacts of mining and burning coal to produce electricity, the real value of the whole system of systems that compose the industry becomes significantly less valuable. That value to the society decreases even further if one also considers the physical and social harm that the industry creates for people working and living near coal operations. Thus, we can have a highly profitable and significant industry, such as the whole set of operations behind the fossil fuel industries, but little real net value being added to the actual economy, society, and environment. When we have a conflict between businesses' or businesspeoples' profiteering motive and society's survival and well-being motive, I believe it is wiser to side with society's survival and well-being motive, even if it comes at the expense of the businesses' and businesspeoples' profits. If an industry, person, or group of people have a demonstrable powerful negative effect on the well-being of all other members of human society and the environment, it is better to change, replace, or work to eliminate the need and desire for those industries and people. This is one place the government can step in as an independent agent in the social game-space, either to do something simple, such as make a certain practice set illegal or obligatory, or do something more complex, such as work to financially and practically undermine the demonstrably destructive industry and/or people (such as through publicly funded research into alternative products and practices, or by imposing punitive taxes or promoting tax breaks). In any case, it is the government's prerogative in these cases to maintain the odds of survival, well-being, and advancement for the social group as a whole beyond the concerns of one person, company, or industry of companies.

Now, these may be rooted in a set of normative values that is quite clearly different from those who would call for more laissez-faire behavior from government. The main point of my core thesis is that the normative values that underlie a more proactive approach by government in the economy to preserve and advance the society and environment actually lead to more desirable outcomes in the society and the environment than the alternatives. It's a process that's akin to identifying the right prescription for your eye-glasses; some are more effective at helping you see and work better than others. The values that underpin laissez-faire ideologies are less effective at achieving greater social well-being in practice than those that are more in favor of government being proactive. I have already gone into the evidence behind this conclusion, and see no point in explicitly repeating myself here in this post. There is still room for some debate on which policies and practices from government work best. However, all of those issues can be resolved by using evidence and the honest application of the scientific method, and it doesn't change the fact that government is a necessary set of institutions that need to be granted authority in order to work. Evidence has shown in the US and elsewhere that if there isn't that independent power for the government, the power simply shifts to the people with the most independent wealth at the expense of the rest of human society. There is no escaping the power dynamics within a human society among individuals and groups. There is only understanding which dynamics are most healthy for the whole of the human group, and then following through on those healthier dynamics in practice.

So what metrics should policymakers use to determine a company's value? I believe that these metrics and standards can be developed through carefully examining and understanding accurately the net effects a compan(ies)' products have on individuals in the society and on the environment. We can use Product Information Management (PIM) and North American Industry Code System (NAICS) to sort through each end-consumer product by industry to determine the social and environmental impacts of each product and system of products. Rules can then be developed for quality and impact that get enforced by consumers. The advantage of creating such a transparent system is that consumers no longer have to worry about having no recourse if their products aren't up to a certain quality standard. Businesses (at least, the businesses that are worth having in the society) also benefit from having recourse against sub-standard products and anti-social business practices. After all, the only companies who benefit from little or no regulation are the ones who are willing to harm the society and the environment for their profits. I do not see a good reason for preserving the livelihood and well-being of those who would destroy the human society and the environment for their personal gain, or the means for those individuals to carry out those anti-social activities. While this may be a normative value judgement on my part, I think it is borne out by the aforementioned evidence and history that the values that I happen to possess are healthy and healthier for society at large than alternative value systems and moral beliefs. The individual is not served when they harm others or the environment, and are certainly not helped when they do harm at the scale of the whole society.