ECONOMIC PERFORMANCE 1970s to PRESENT has been very good for owners but much less good for those who work for a living. It is not at all clear yet that those in leadership positions and those with power understand that this trajectory is completely unsustainable and is creating a number of existential threats that are growing with time. True Value Accounting is being designed so that the system of metrics will be able to get to grips with everything that needs to be done to make the world a better place

1. ECONOMIC PERFORMANCE
1970s TO PRESENT
File: ECONOMIC-PERFORMANCE-1970s-TO-PRESENT-160805.odp Peter Burgess (c) All rights reserved
TRUE VALUE ACCOUNTING

2. CONTEXT
This slideset is a Work-in-Progress
and will be updated from time to time.
It is part of a series that aims to
enable better metrics for the complex
socio-enviro-economic system that
we all live in. Metrics are powerful,
but they must be the right metrics.
TRUE VALUE ACCOUNTING

3. Since the 1970s, the economy has
been good for owners, but not so
good for workers.
TRUE VALUE ACCOUNTING

4. The following graphic shows
something about the perception
of value in the modern economy:
TRUE VALUE ACCOUNTING

5. TRUE VALUE ACCOUNTING

6. There was a time when tangible
assets were important … the light
gray segment … land, buildings,
machinery and equipment, etc.
TRUE VALUE ACCOUNTING

7. But stock prices … the bright red
segment … have become less and
less correlated with the tangible
assets of companies.
TRUE VALUE ACCOUNTING

8. And intangibles … the light brown
segment … have increased
reflecting more and more M&A
and the purchase of such things
as intellectual property.
TRUE VALUE ACCOUNTING

9. TRUE VALUE ACCOUNTING

10. It was back in the mid-1980s that I
started to observe that the
biggest cost in modern business
was profit … and since then this
characteristic of the economy has
become even more of an issue.
TRUE VALUE ACCOUNTING

11. Greater productivity reduced the
cost of making things … but
maximizing profits increased the
cost of buying things!
TRUE VALUE ACCOUNTING

12. Owners of assets have done very
well over the last 40 years.
TRUE VALUE ACCOUNTING

13. This has not been matched by
much quality of life improvement
for those that work to pay their
bills.
TRUE VALUE ACCOUNTING

14. Productivity has increased but
wages have not
TRUE VALUE ACCOUNTING

15. TRUE VALUE ACCOUNTING

16. Productivity has increased but
wages have not
TRUE VALUE ACCOUNTING

17. TRUE VALUE ACCOUNTING
Peter Drucker, a well known
management guru famously said:
“You can't manage
what you don't
measure”

18. We measure profits
We measure stock market prices
We measure GDP growth
TRUE VALUE ACCOUNTING

19. Profits, stock market prices and
GDP growth are in the 24 hour
news cycle every day of the year.
TRUE VALUE ACCOUNTING

20. … not so much quality of life, and
depletion of natural resources
and degradation of the ecosystem
and the environment.
TRUE VALUE ACCOUNTING

21. CEOs and investors understand
NPV … net present value … of the
flow of future profits
TRUE VALUE ACCOUNTING

22. … but they do not use the same
rigor in valuing future risks,
especially existential risks like
climate change and social
disruption that will arise from
structural unemployment.
TRUE VALUE ACCOUNTING

23. Conventional accounting has
been very effective in helping to
manage for business profit
performance, but less so in
accounting for externalities.
TRUE VALUE ACCOUNTING

24. True Value Accounting is based
on the concepts of conventional
accounting, applying them to ALL
the issues that are important …
multi dimension … multi
perspective … about everything
TRUE VALUE ACCOUNTING

25. … to get things better, then we
had better start to measure the
right things … and in the right
way.
TRUE VALUE ACCOUNTING

26. REMINDER
This slideset is A WORK-IN-PROGRESS. It will be
upgraded periodically. It is part of a series of more than
100 slidesets. Navigation to these is available here:
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=n1-SlideNav-for-TVA
More about the True Value Metrics initiative is at:
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=n1-MainNav
FEEDBACK is welcome. Please email to Peter Burgess …
peterbnyc@gmail.com … with a catchy phrase in the
subject line so that it gets attention, and please identify
the specific slideset(s) or webpage involved.
TRUE VALUE ACCOUNTING

27. THANK YOU
Some links and contact information:
Email Peter Burgess … peterbnyc@gmail.com
Peter Burgess LinkedIn profile
https://www.linkedin.com/in/peterburgess1
Link to TrueValueMetrics.org website
http://www.truevaluemetrics.org/
Link to navigation to other resources:
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#1
TRUE VALUE ACCOUNTING