Should this be gain/lose/reinvest? Is there a verb:satisfice or a generalized verb:invest or verb:reinvest? What is relation to patterns backcast/benchmark/valuate, risk as regret or verb:backcast? To use/rent/return and cost/risk/benefit/breakthrough?
...costs and benefits to the individuals making the transaction do not exhaust all costs and benefits. Private costs and benefits do not fully reflect social costs and benefits. Externalities are pervasive, and become more so as we move from a relatively empty to a relatively full world. [Also] arguing from the part to the whole commits the fallacy of composition. Micro rationality often leads to macro irrationality, as evidenced by the paradox of thrift, the tragedy of the commons, the prisoner's dilemma, the tyranny of small decisions and the arms race. Macro-level comparison of costs and benefits is necessary. ...this point is accepted by standard economists... Instead of one account, GNP, we should keep three accounts, one for each basic magnitude. Page 113, Beyond Growth by Herman Daly, who recommends:
1. A benefit account (called gain in living ontology to emphasize feedback loops and the receipt of the gain by someone potentially in a zero-sum game unless its proven to be a global gain) which would seek to measure the value of the services yielded by all accumulations (not just those rented during the accounting period, but also those used in production that is enjoyable and self-fulfilling.
2. A cost account (called loss in living ontology to distinguish it from the stochastic regret or expected loss) which would seek to measure the value of depletion, pollution and disutility of those kinds of labor that are irksome (and of "waiting") in Alfred Marshall's sense). With separate accounts for costs and benefits we could occasionally ask if the extra benefits of accumulation were worth the cost.
3. A capital account distinguished from the above two operating accounts, an inventory of the accumulation of stocks and funds and their ownership distribution. Included in the capital account would be not only produced stocks and funds, but also natural capital such as mines, wells, and ecosystem infrastructure. Such basic infrastructural capital is often indistinguishable from natural capital once built, as it is actually built to simulate natural phenomena, e.g. a well is a copy of a spring.
Daly further argues that "ideally, accumulation should continue up to the point where the marginal benefits of services rendered by the extra stocks and funds is equal to the marginal cost of the throughput required to maintain the extra stocks and funds. Once the optimal accumulation was reached further growth would cease, at least until such time as the underlying conditions of taste and technology changed."
Seeking a sufficient or satisfactory level of accumulation - or a balance - Daly calls satisficing and argues that each of the three basic magnitudes requires a different objective and behaviour mode:
- The accumulation of stocks and funds would be satisficed to achieve satisfying gain.
- service would be maximized given the accumulated capital (doing the most with the least)
- throughput would be minimized, given the sufficient accumulation.
Goals 1 and 3 are in direct conflict with increasing GNP (see GDP hero). Optimizing and satisficing are also in conflict with GNP growth.