Below is a collection of technical terms used by the Universal Commons Project. This glossary is a work in progress and we welcome feedback or suggestions.

 

Asset Class (AC)

 

An Asset Class is one aspect of either Social or Natural Capital which can be identified, classified, measured and traded on the UCX. An AC must have clearly defined Entities with at least one clearly defined Property and Indicator. The Measurement Framework will give a score in Units to each Entity that represents the condition or quality of the Property/Properties.

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Examples might include literacy (a form of Social Capital) and clean air (a form of Natural Capital). Each AC is placed on the Universal Commons Exchange (UCX) as an asset and is available to be leased by enterprises that use the AC, and improvements in the AC can be traded. ACs will be defined and added to the UC via the Universal Commons Measurement Challenge.

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Capital

Capital is an asset that can generate wealth. Capital has no intrinsic value but rather has instrumental value. The value of capital is determined by agreement, such as within the context of a market. We classify Capital into three classes: Financial, Social and Natural.

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Entity

Each Asset Class is composed of a number of Entities, each of which represents a single measurand (i.e. something that can be measured). For example, an Entity within the AC for literacy might be a single person, and an Entity within the AC for clean air might be a cubic metre of air. The nature of the Entity will depend on the nature of the AC and will be defined by the Measurement Challenge.

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Financial Capital (F Capital or FC)

 

Financial Capital is monetary as well as tangible and intangible assets. Examples include goods, buildings, manufacturing equipment and intellectual property.

 

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Financial Investors

Financial Investors represent the vast bulk of owners of Financial Capital. Typically, they invest exclusively for financial return. They do not invest Financial Capital for the S&N Capital they consume and they do not receive any Financial Capital returns from the S&N Capital they create. As such, they typically have little incentive to invest in the use or improvement of S&N Capital.

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Instrument

 

An Instrument is a specific measurement tool along with specifications for use and validation criteria as specified by the Measurement Committee.

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Instrumental Value

Instrumental value is ascribed to a thing according to its perceived “utility” to others, typically persons. Instrumental value is therefore a function of relative importance or desirability to others. Something might be deemed important or desirable due to a range of factors, including practical usefulness, rarity, beauty, symbolic significance, allure, etc. As such, instrumental value can vary in line with the ratio of supply and demand. Money is a paradigmatic example of a thing with instrumental value.

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Intrinsic Value

Intrinsic value is ascribed to a thing that has irreducible value in and of itself, so the value of the thing is unrelated to its usefulness. For example, human beings are typically held to possess the intrinsic value of “persons.” As Immanuel Kant put it, they belong to the “kingdom of ends” and may never be used merely as means to some other end. Intrinsic value has no price and the Universal Commons is not seeking to place a price on things of intrinsic value.

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Measurement

The Universal Commons does not presuppose a precise definition of, or conditions for, measurement prior to the completion of the Measurement Challenge. However, measurement is broadly understood as a system that quantifies the condition, importance or value of something according to a set of standards or metrics.

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Measurement Framework

A methodological framework employing one or more measurement methods that allows for the accurate and reliable classification of S&N Capital into Asset Classes, along with validation of the measurement tools used to assess the condition of the Entities within each AC. The Measurement Framework will be extrapolated from the Universal Commons Measurement Challenge, and will eventually be used to register new ACs on the UCX.

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Natural Capital (N Capital NC)

Natural Capital represents natural environmental assets, including all ecological services, and those on land, sea and in space. It includes all potential sources of material goods needed to sustain humanity and advance material civilisation. Examples include clean air, clean drinking water and biodiversity.

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Property

A Property is the feature (quality and/or quantity) of an Entity that is deemed to have value and that is measured by at least one Indicator. An example of a Property is the toxicity of air or the ability of one person to read and write.

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Scale

Each Indicator that is measured will be given a count on an interval Scale determined by the Measurement Challenge. For example, the Scale for the AC of Literacy might be 1 - 10, with 1 representing illiteracy and 10 representing full functional literacy. Different ACs may have different Scales, some might be linear and others might be logarithmic, etc., as required.

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Social Capital (S Capital or SC)

Social Capital represents social and relationship assets within populations and communities that enable humanity to flourish. Examples include trust, health and an absence of crime.

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Social Investors

A small proportion of owners of Financial Capital invests for social return or for a mix of social and financial return. They invest Financial Capital with a view to preserving or enhancing Social and Natural Capital.

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Unit

A Unit represents the condition of an Entity within an AC. It is determined using a formula provided by the Measurement Framework that combines and standardises one or more Indicators of Properties within that AC. For example, an individual with very poor reading ability might be measured as having 1 Unit of Literacy, whereas an individual who is fully functionally literate might be measured as having 10 Units of Literacy.

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Universal Commons Exchange (UCX)

The Universal Commons Exchange is a specialised market designed to facilitate trade in the improvements in Social and Natural Capital that are part of the Universal Commons.

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Universal Commons Measurement Challenge (UCMC)

 

The Universal Commons Measurement Challenge is a challenge prize run by Nesta offering a substantial cash prize to the individual or team that can produce generate particular Asset Classes. It will have a set of clearly specified criteria and will be open for submission by anyone who believes they can meet the criteria. The Measurement Challenge Jury will decide on which entry or entries qualify for the prize money.

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