About us
Rethinking Capital’s mission is to rethink the rules that govern the economy and to begin the adaptation of modern capitalism to create a prosperous, just and equitable society .
To achieve this, some fundamental questions need to be asked and answered:
- Is modern capitalism creating the future we want for ourselves and future generations?
- Is it creating the environmental and social outcomes we need for a more just and equitable society?
- Is it aligning private interests with the evolving expectations of the public?
- Do we understand what is driving value in our economy?
- Do we know how to identify and account for this value?
- Do our decision makers have the transparency and accountability needed to drive future growth in a sustainable way?
- How can we address the levels of debt and economic stagnation we are suffering?
It has never been more timely to find new solutions to the challenges we are facing.
As we write this, the world is only just beginning to emerge from a global pandemic, the impact of which has had devastating effects for individuals, countries, governments and society as a whole. Revenue losses in companies large and small are unprecedented, leaving many corporate directors asking the question of whether their organizations remain a going concern. Along with the continuing threat of climate change and the eruption of social tensions driven by long-felt inequities, we are facing crises in all parts of the sub-systems of our global system – the natural environment, the social and political and the global economy.
Our work is informed by the following three assumptions:
- Capitalism’s Third Wave – the narrative: The industrial era with its factory-based system of production has been supplanted by a new intangible economy. The new intangible -based engines-of-growth is global, instantaneous and vastly different from the mechanical industrial-type production of the 20th century. This is the third time in capitalism’s history that a similar shift has occurred.
- Tackling the Root Cause - upside down incentives: Accounting practice defies accounting standards and has created upside down incentives throughout the system. Normative accounting flips the incentives. It also creates a consistent methodology with which to dismantle and re-assemble all of the incentives over time.
- Fatal Flaws in Economic Theory: Largely but not exclusively because of these changes in the economy, flaws in economic theory and practice have now been exposed. These flaws in theory flow through to inform the theory and practice of accounting, financial reporting, and business decision making.
Building on the established principles of normative logic, Rethinking Capital has developed a new governing orthodoxy, linking economic thought, accounting practice and governance frameworks in order to restore public trust in capitalism.
Our solutions are simple and intuitive:
- We take a capital centric rather than a market centric approach to economic analysis that more accurately recognises the existing commercial reality.
- We employ existing GAAP, update double-entry bookkeeping and are informed by existing International Accounting Standards to create a true view of shareholder equity and realisable profit in balance sheets and income and cashflow statements that incorporates all intangible assets.
- By applying normative accounting to create these normative statements, the interests of all stakeholders become incorporated into decision-making. Moving from decisions being made in the belief that profit in the short term is the only true measure of value and everything else is a trade-off – to one where decisions can be made in the best interests of both shareholders and all stakeholders.
