Do You Extract Value, Create It, or Release Its Potential? — Part 2 — Levels of Reality Included

If you prefer higher vibrancy, energy-enhancing experiences to lower vibrancy, energy-depleting experiences, then our survey research in 93 countries and field research in 9 countries suggests that you also prefer agreements that include the possibility, development, and outcomes levels of reality.

In a previous blogpost, historians showed us that there are two types of political and economic institutions, to which we added a third, based on our field research with positive deviants.  Political and economic institutions tend to be based on value extracting, value creating, or value potential-releasing agreements, three different theories of value.

Now I suggest how the value you experience connects with these theories of value.

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Value-extracting agreements.  The focus is on extracting value from another party in the moment of the exchange.  These agreements and institutions see how much resource there is and try to appropriate as much of it as possible.  To determine the value of a specific resource, as it is exchanged at a specific moment in time, economists like Alfred Marshall created an extraordinary tool, the supply-demand curves, which allow you to estimate the value (the price) at which two parties are willing to exchange a given quantity of the resource.  This insight on price now lies at the foundation of market-based economic theories of value exchange, according to Nobel laureate in economics Paul Samuelson.  To find the value in the moment of exchange, the supply-demand curve looks at the exchange right now right here.  This formulation embraces the outcomes-noun level of reality, what is available now here.  This limits the analysis, not allowing for realities that change over time and space or over possibilities.

Value-creating agreements.  The focus is on creating value by leveraging the dynamics of value amongst multiple parties with multiple, interrelated resources.  These agreements and institutions look over space and time at the net effect of the resource’s inflows and outflows, which are connected to the ebbs and flows of other resources.  By seeing these dynamics, they are able to look over time to leverage the creation of value in resources, and thus be able to assess the net value for each party of any given resource at a specific moment.  Tools like Jay Forrester‘s system dynamics mapping of resource dynamics assesses each resource, its inflows and outflows, the connections amongst the resources, and the overall dynamics influencing them.  To this tool, my colleagues and I added tools for qualitative and quantitative strategic analysis of the dynamics.  This formulation embraces both the development-verb and outcomes-noun levels of perceived reality.  This dynamic structure limits the analysis, not allowing for seeing the potential in new possibilities.

Value-possibility-catalyzing agreements.  The focus is on the latent value potential that is available, that can be seen.  These agreements and institutions look at the potential available in the people and resources around them.  What is possible?  What can we say yes to?  They are able to see the potential, as well as the pathways for developing that potential over time, and the outcomes that will result along that pathway.  This focus embraces the possibility, development, and outcomes levels of perceived reality.  To work with the dozens of groups we have identified who work with these value-possibility-catalyzing agreements, we developed the Agreements Evidence Mapping tool, which maps the agreements that explicitly work with each of the three levels of perceived reality (possibility, development, outcomes).

Coming back to where we started, in this post, if people seem to prefer higher vibrancy experiences to lower vibrancy experiences, they also seem to prefer agreements that embrace more of the perceived levels of reality than less.  Connecting this with the historical observation about political institutions that support value extraction, value creation, or value possibility catalysis, it seems that people would prefer value-possibility-catalyzing agreements to value-extraction agreements, as they go hand in hand.  Yet, we still live mostly in value-extraction systems.  Why?  What do you see?

9 thoughts on “Do You Extract Value, Create It, or Release Its Potential? — Part 2 — Levels of Reality Included

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