A draft version for public comment of the forthcoming r3.0 Value Cycles Blueprint has been released on July 3rd, 2020, and is open for comments until July 31, 2020. This Medium article summarises the goals and and chapter structure of the Blueprint.
The full Draft For Public Comment can be downloaded here. A structured feedback document is available here. Responses can be sent to
hello@r3–0.org.
Now we are asked to do something that has never been done before: create a system of value that is equitable, sustainable and inclusive. This will require awakening the heart within each of us of what it means to be human — a deep-seated yearning for interconnectedness in the present and intergenerational responsibility for the future.
James Quilligan, 2020[1]
I have tried to open a new dialogue by showing that the creation of value is collective… If I have been critical, it’s because such criticism is badly needed; it is, moreover, a necessary preliminary to the creation of a new economics: an economics of hope. After all, if we cannot dream of a better future and try to make it happen, there is no real reason why we should care about value. And this perhaps is the greatest lesson of all.
Mariana Mazzucato, 2017[2]
A business model designed to maximize financial capital will not necessarily create the greatest value. From a value perspective, if a business model transforms capitals with a greater value (work capacity) than money into money, the transformation is inefficient. The result is more money but less value. In practical terms, this means the business model is producing less capacity to do work in the future. This paradox is at the root of neoclassical economics. Rather than capitalize resources, it leads to an overall decapitalisation. More money but less capacity to bring about positive change. A paradox that eventually leads to a value crisis.
Peter Tunjic, 2018[3]
Humanity is currently confronting a value crisis: in order to prop up a perpetual increase of financial value, we are degenerating the very social and ecological resources that undergird the intrinsic value of living. Therefore, we must create a new system of value — one predicated on continually regenerating the social and ecological resources that are vital to the wellbeing of all living beings, in the spirit of interconnectedness.
This Value Cycles Blueprint makes a case for this radical reconceptualization of our system of value as System Value, which would displace the current regime of social and ecological value extraction to support financial value concentration, with an approach that dynamically balances the creation of value across all systems — ecological, social, and economic. And to make this System Value creation durably flourishing, we must shift from the linear and even circular notions of value creation, and instead embrace cyclical and spiral value creation structures, which mimic how natural living systems function.
Value
The Blueprint kicks off by distilling down the most fundamental definition of value:
“claims embracing the fitness, the desirability of a (possible) fact”.
In other words, a fact is a claim about what is; value is a claim about what ought to be. So, in order to actualize value in the real world, we must align what is with what ought to be, as visualized in the following quotient, which seeks equalization:
Is / Ought >>> Is = Ought
This configuration aligns with the Sustainability Quotient, which can be visualized thus:
Sustainability = Actual Impacts / Normative Impacts
The Blueprint asserts that, while definitions of value may differ at the individual level, at the collective level, sustainability is a universal baseline of value — the minimum bar of what’s fit, desirable, and possible.
In Chapter 2, the Blueprint traces an evolutionary trajectory from Shareholder Value to Shared Value to Valueism. It then pauses to consider the confounding question of Valuation to set the foundation for identifying the shortcomings of Impact Valuation — namely, that it considers impacts across diverse capital resources (natural, social, human, etc.) to be interchangeable, and it fails to account for the carrying capacity thresholds of these vital capitals resources.
To address these shortcomings, the Blueprint proposes the next developmental evolution to System Value, which inherently accounts for Intrinsic Value. This Chapter ends by asserting the need to shift to conceive of Economies as Ecosystems, which would enable the actualization of System Value in a Regenerative and Distributive Economy.
Cycles
Building off the notion of value as a knowledge claim, the Blueprint illustrates the fundamental nature of cycles by appealing to the example of the knowledge life cycle, whereby knowledge is continually produced, assessed, enacted, re-assessed, and either validated for continuation in the cycle, or rejected from the cycle as unfit and/or undesirable.
Against this backdrop, the Blueprint traces the evolution of directionality in conceptions of value creation, from Value Chains to the Circular Economy, critiquing shortcomings of each of these doctrines. For example, a robust body of evidence demonstrates that Circularity does not inherently reconcile with Sustainability, and the Circular Economy stands in need of humanization (to complement its focus on biological and technological metabolism) through the Circular Humansphere.
The Circularity / Sustainability disjunction points to the need for Thermodynamic Accounting that reconciles recycling efforts with the fundamental laws of entropy and the conservation of energy. Applying a geophysical lens to the question of regeneration, the Blueprint then examines Bioregional Circulation as the appropriate scale of intervention. Finally, Chapter 3 ends by positing the Cyclical Economy as the next evolutionary development, predicated on the notion fractal proportionality whereby cyclical value flows are nested between linear and circular flows on the one hand, and spiral flows and the other, and represent the appropriate scope of focus for applying to the macro question of an economy.
Value Cycles
Chapter Four pulls together the strands on Value from Chapter 2 and on Value in Chapter 3, culminating with a synthesis of the notion of System Value with the notion of Value Cycles to arrive at System Value Cycles as the pathway to a Regenerative & Distributive Economy, and ultimately to Thriveability.
The Chapter then applies the concepts advanced in the Value Cycles Blueprint to the preceding Blueprints in the r3.0 Work Ecosystem, to see how they interweave. Of particular note, the development process of the Value Cycles Blueprint prompted r3.0 to reassess the Strategy Continuum introduced in the first Blueprint (on Reporting), resulting in its redesign and reintroduction as the Maturity Matrix. In addition to covering the alignments with all previous Blueprints, this Chapter also assesses the overlap with other elements of the r3.0 Work Ecosystem, including the Rightholders concept, as well as r3.0’s commitment to Thresholds & Allocations and it advocacy for True Costing, Benefiting, Pricing, Compensating, and Taxing.
The Blueprint ends with a set of Recommendations customized to the key constituencies who form the primary audience of this Blueprint. r3.0 invites these constituencies to implement these Recommendations as a key step toward spurring the emergence of a truly Regenerative & Distributive Economy built on System Value Cycles.
The full Draft For Public Comment can be downloaded here. A structured feedback document is available here. Responses can be sent to
hello@r3–0.org.
Notes:
[1] James Quilligan, Economic Democracy Advocates Newsletter, June 2020. https://mailchi.mp/bf75766b093f/eda-newsletter-november-7844356?e=354efb4ffc; emphasis added.
[2] Mariana Mazzucato, The Value of Everything: Making and Taking in the Global Economy, PublicAffairs, 2017, emphasis added
[3] Peter Tunjic, “Capital & Capitalisation,” OnDirectorship, 24 August 2018. http://ondirectorship.com/ondirectorship/6g3hjaczsstaj96egyb6sr6rxzy8cs; emphasis added
