Imbalance Sheets

You’re a flu-ridden zombie vampire worth $47 billion whose only BFF is a serial killer: are you rich? Now–you’re a healthy, fully-functioning human with plenty of friends and a working brain: are you rich? The former, one might say, has led a life that’s a little…imbalanced. So let’s try that again. Your household has a balance sheet. Your business has a balance sheet. Hell, even your Farmville account has a balance sheet. So here’s a question: why doesn’t your country? For that matter, why doesn’t the world? Especially one that measures the wealth that matters? The “GDP” that’s reported quarterly for countries (and summed up to the world’s) is a measure of national income, not wealth. Without a balance sheet for your household or business, you wouldn’t know if you were truly wealthy—and worse, you might simply mortgage your assets willy-nilly, leaving you effectively bankrupt. Just so, without national balance sheets, societies don’t know if they are wealthy—especially in the terms that matter to humans. So an imbalance sheet is a balance sheet for countries, and for the world, that keeps track of the many kinds of capital assets real prosperity is composed of, whether human, social, or natural. It lets us see whether an economy’s growing imbalanced, as real assets are turned into liabilities: tilted too heavily towards, for example, financial paper, at the expense of trust, skills, and creativity. It allows a society to measure rates of investment and depreciation in the stuff that matters–which is the heart of an economics fit for the future. Sound like the 25the century? Think again: renegades across the globe world are already rethinking the idea of wealth, and how to balance and measure it.

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