P.36

New Business and Industrial Model after Capitalism and Communism

How are the metrics used by investors, consumers, communities?

For example, when you buy a product from a company you look at the price of the product and a set of metrics about the behavior of the company such as keeping capital in the local community for jobs, charity toward the community, green issues in the region, fair treatment of their employees, the quality of the product, treatment of customers etc.

These measures might be in a simplified one to ten system, where ten is the highest rating and 1 is lowest, or maybe zero. As a consumer you look at price and then the 7 or 12 other metrics. Perhaps a formula will be there that sums up a total metric score. You will then choose which company to buy your product from by making your own sort of interpolation of the data. (If low price is very important for you because of a limited budget then you will consider that more; if that is not an issue then you will not; people will make their own decisions on what works best for them. But in the long run with this system of buying you will find that this system will tend toward emphasis on the new metrics.)

A consumer’s league would investigate companies and provide these ratings on these issues to everyone. You would go to its site, and there would actually be many consumer leagues providing this information in their various formats.

This would happen for investing in companies also, you would invest only in the companies that fit your profile of a good company; profit is a consideration but so are these other issues. So you once again might have the stock price and all the conventional data, and then beside that metrics on all these other issues.

An investment league would be set up to provide information on this, in fact, many investment leagues with individualized metric strategies for different kinds of investors.

A community league would be concerned with exporting revenue out of community, community service, environmental impact, fair taxation, diversity programs and so on. Consumers and investors would go to a community league site and get intimate local information of firm.

With these three basic leagues you would force business to interact with society, that is the point of the league system to reconnect society into a whole again, and to counterbalance the singular power of business and economics.

What then is an industrial league?

It brings together firms in a particular industry and helps them develop metrics on their activities, another way to say this is that the industrial league sets standards for companies. Why would this work? Why couldn’t firms join and lie and cheat as they do now? Because a league is formed by moral individuals who set high standards for business activity. Then they only allow businesses to join who follow these standards, otherwise they are removed from the rolls.

It is that simple. And to create this system, yes, you need a great change in the values and behaviors of a society. But it has to begin somewhere with that handful of ethical citizens who create the leagues and create the companies that use these metrics.

The sports analogy applies here because in a sports league there have many rules that franchises must follow, much more is required than a simple profit motive. If you refuse to comply, you lose your franchise.

When the majority of business is done in this way, then the government can focus less on regulation because the leagues and firms are doing their own self supervision and the consumer and community and investor leagues are doing the same. At this point government can focus more on national issues of fiscal policy, long term industrial plan....But in the meantime, government regulation is necessary though it is a flawed way of supervising, but we are not at all near the ideal role for a state.

Other sorts of leagues are possible, for example for disabled people, minority groups, women, for employees of corporations, and even leagues that watch government in regards to spending and efficiency.

What type of measures would you use?

As I said, a simple one-to-ten system is good for a start with a formula that gives a sort of overall average.

More complicated metrics can come later.

We can even use equations that mix a monetary value with other measures, this would increase or lower the price of a product or security or asset. These would have more specialized uses where people will find that one number is better than money plus a list of other metrics or a summary, average metric. This is the area where there can be a lot of creative development.

And then this leads to new kinds of financial instruments also.

How does this affect prices?

A good metric rating will generally raise the price of a good or a stock or the value of the whole company because it is now considered to meet high standards, it has a premium value, this is natural. This already happens with firms that are considered a cut above. In the diverse economy, more systematic measures would cause this to happen.

This rise in price will cause other firms to copy the metrics of its competitor, that is, to raise their standards in order to stay in business. What will happen is that the prices will then lower overall, as everyone is producing according to the same standard.

Then a company will have to raise its standards again and/or develop more efficient means to produce its product and lower its item price.

The best strategy, on the whole, is to both raise standards and lower prices via efficiency, both at the same time, and thus dominate a market. And these two processes will benefit all of society.

Will these new metrics make business easier?

Not necessarily, if a company is doing poorly, it may be due to low metric standards or it could just have to do with poor conventional business management — low efficiency, bad financial strategies, poor management, inept marketing, ineffective distribution and so on. The laws of business still operate. We only have another layer of metric behaviors added on.

How does the stock exchange work?

The metric banks and metric securities exchange is new version of Wall Street, the NASDAQ, the NY Stock Exchange, and investment banking.

We might call it “M-ban-ex” or “MBX”, short for metric banking and exchange. At a certain point good people will form MBXs to sell metric stocks and bonds to investors, and to set up investment banking to firms that accept metric accounting.

These will start out small but will steadily grow. Citizens will set them up and then add capacity as the demand grows.

The MBX will NOT be an old style stock market that steals from poorer investors and those who don’t have access. These securities will be bought at the exchange; there are no stock brokers in the old sense. Further, there will not be old-style speculation. Thus, no day trading or secret or privileged stock issues and so on.

Our “initial public offerings” will genuinely be initial public offerings with access by all. “Pumping and dumping” will be a thing of the past.

And one will not allow these stocks or bonds to be listed on conventional “monetary” exchanges. People will de-list companies if they allow this.

The MBX is the core institution of a broader set of ideas on economics. Connected to the MBX will be leagues, consumer services and more. There will be many MBXs in many nations; this is in keeping with views on diversity and creativity and range strategies of allowing many approaches at once.

Securities will be created according to the metric list of goals and targets; these are the “standards”. Equations of various types will be used to value the stock; these equations will mix money and other metric performance measures. There will be different schools of thought expressed in these equations, some more radical than others; we can evaluate stocks with differing methods simultaneously. People will take into account degree of metric acceptance and the many different kinds of companies in an economy.

One type of equation will set have a monetary price that sets beside a set of stats or many stats reduced to one metric as said above.

Another type of equation will mix the monetary value and the other stat targets into a singular kind of money metric. This might be for specialized uses for valuing a stock or company assets for example.

These two methods will give two kinds of evaluation. One method is more conservative, the other more radical.

Further, it may decided that there can be differing grading systems for conventional corporations vs. new entrepreneurs — an easier metric system for bringing over mainline business to metric thinking as the first step in a long term strategy, and a more “pure” version for the new firms. Each has their place, conventional corporations can be approached with the first method; new entrepreneurs can begin immediately with the more advanced equation. Both equations can be used at once, differing sectors of the economy will be at different levels, all can be managed by the MBX.

We can create even more advanced equations if need be — equations that operate under certain conditions and change when conditions change, we can have numbers with spin about some feature of the company, acceleration or deceleration in regards to its metric history, positive and negative features, color displays, standard graphs and circular displays and so on. We can measure relationships between opposite factors in a company, we can measure the tension created; we can measure wholes vs. parts and so on. And a good source for these metric types will already exist in science, physics and mathematics.

Metric measurement has no end and is a fundamentally creative process that ultimately evolves with an economy.

Also, consider that metric measurement of securities can lead to new kinds of stocks, bonds and derivative. These can be explored so that the proper kinds are developed and the harmful instruments are avoided.

A company will want to sell metric stock through a new exchange. With help they will set up a metric accounting system. People will send to them materials, they will communicate over the internet and the MBX will send professional reps to their site.

They will learn to measure many new things and report them to leagues and the public. They will establish metric accounting systems. They will be certified and conform to MBX standards.

People will list their stock on the MBX with is metric stats. Investors can then buy them or not. We will have several levels of standards — one star, two, three etc. or more sophisticated formats if we decide. (The method is unimportant in this discussion, a general measure theory would allow us to develop many differing strategies for measure.)

At the highest level, a company will use all the metrics and will have higher quality performance. These companies will get most of the MBX’s attention and support. Companies wanting only to meet the first or lower standard level will get less attention. People may be able to do most investigation remotely by examining financials, plans, products-services, community reports, taxes, certificates and etc. They will use local people to aid in these reports. Here is where community, government and employee leagues are of great value.

But while the lowest level standard is not that attractive, we also have to keep in mind that most firms will only be able to transform to this level, however when millions do this, well, then you have a massive economic shift in a nation. So both levels are needed, the higher and smaller, the lower and larger; both move an economy in the metric direction.

How will the revenues work for all this? The applicant firm pays for work done. It also will pay to be listed on the exchange, and for its products to be listed on the consumer league product-service evaluation site, which uses its own metrics too. Further, ethical advertising will be offered to these firms on the consumer site and elsewhere if it is deemed appropriate and not opportunist.

What about equity and ownership?

About equity, the imbalance today is conventional corporate ownership, thus cooperatives and democratic shareholding, and more employee power are the goals. We might call this “diverse-equity” or “democratic equity”...that is “d-equity”. “Dequity” is in a spectrum of degree and form and particularities, people would promote it because the diverse economy is based on diverse ownership and today the stress is too much on the corporate. And while the individual form is prevalent in many national economies it cannot be useful for large scale production and service, though we appreciate the creativity and diversity and individuality represented by private forms. And I think that creativity and individuality can be represented in dequity forms too by respecting Genio (creativity) and talent, giving credit to innovators, and grasping that in a market economy invention is key to success.

What about growth of the MBX?

The MBX and all its related forms will grow differently from standard capitalist businesses. Conventional companies grow by profit, by a money driver, by greed. This movement will grow because good people inspire with their ethics and principles, because people trust us, because they think they are ethical, and they think these unique people are one of them, from the “people”.

Further, such a movement would welcome CEOs and the wealthy to join its economic movement; we know there are some who have moral compasses and do not like the behavior of conventional capitalism, and are willing to completely change their lifestyles and values.

The MBX serves the interests of more than a “proletariat” but also the poor, middle class and small business. We might call this collection of strata the “sub-tariat” meaning the classes below the rich.

And I do think that metric companies can make profit and meet other operating goals which are beneficial to investors and customers. Firms can be successful and grow, and at the same time use new metrics. We know this will happen and we are counting on this to happen; someday the metric economy will become a large sector of industry.

A new movement can offer a new and just economy. It can try to help the poor, small business, farmers, professionals, the middle class and all classes. These people will not cheat or manipulate. In a way they will be introducing a “social efficiency” and “social profit” because they will be maximizing the total social good and reducing suffering and damage to sectors of society. The accumulation of these metrics means a nation is “profitable” in another sense. Metric wealth will accumulate. MBX services will be cheap to free. These institutions will make up in volume, in a mass movement that includes the top and gets down to the poorest levels on the streets.

Cage Innoye

Axxiad News