Introducing “Triple Entry Bookkeeping” – an accounting methodology that incorporates the non-financial #impact of commercial transactions. It is a way to factor in #externalities, positive or negative, within market prices and asset valuations.
It sets out rules for #ProgrammableMoney that can account for impact (+ & -) and adjusts purchasing power accordingly, for both buyers and sellers i.e. creates market based incentives for doing good.
It offers an arithmetic framework that could support proposals by @YanisVaroufakis for the #Kosmos (a synthetic digital currency modelled on the #Bancor by John Maynard Keynes, originally proposed as a unit of account to track international flows of assets and liabilities).
Read the full paper at www.sumptuousaccounting.org
Money, finance and capital markets are social constructs that have ostensibly evolved for societal purpose. Yet paradoxically finance and enterprises that intentionally target social returns need to be prefixed with the word ‘social’ (sometimes ‘impact’, sometimes ‘social impact’) to make it clear that they have an explicit social purpose. Measuring social impact, and by extension environmental impact, is an attempt at quantifying the societal relevance of all this activity – and shining a light on what might be otherwise described by economists as positive or negative externalities. But measuring social impact directly is arguably one of the most difficult ways of universally assessing social usefulness. This is because not everything that is important can be easily measured, and not everything that can be measured can be easily compared with other important things because they often often get measured in different ways.