Saturday, February 04, 2012

Humanity is digging its own hole.

Humanity (through government, public and private sectors) is making wrong developmental choices on behalf of living beings by only using financial value-add as a measure to compare between alterative ends. Such choices theoretically ought to get made based on the maximum longer term financial and non-financial value-add to the maximum number of living beings(through long term impact on living beings, their surroundings and their relationships).

Unfortunately these decisions get made more on the basis of short term tangible impact of the choice on the (sometimes sub-group of) local people, their relationships and their surroundings.

The foolish criteria of "cost of financial capital", which is used to guide investment decision making is hopelessly inadequate due to its miserable short termism and subvertibility. This measure focused only hides the selfishness in the intangible (non-financial at decision time, but strategic and financially relevant in the long term) impacts of investment decisions on living beings.

The capitalism of Adam Smith, which posits that self-interest constitutes a method of social organisation, around the current means of investment for production and the subsequent distribution of the needs of humanity is a bit flawed. Till all humans correctly understand their enlightened self-interest, Adam Smith's capitalism is vulnerable to subservsion by empire-building ignorant humans and groups of humans, who do not understand how their ignorance causes their own misery and that of the rest of humanity.

Potential solution

Trusting unenlightened humans or groups of human (without adequate education and training and sensitivity) with making choices for the best interests of humanity is dangerous. Putting too much trust in systems and procedures to guard against the risk is not the solution. Unless financial cost of capital is supplemented by adequate social and environmental cost benefit criteria at all levels of decision making, humanity is systematically digging its own hole by making seemingly good choices, which if reflected adequately may be poor choices.



There is a need to raise the purity of intentions, skill of implementing

intentions and knowledge of how actions compare in purity and skill at all

points of time.

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