Why Do Governments, Organisations, and Even Healthcare Value People and Communities as Worthless?

As we try and create a positive social impact through people and communities, why are we continuously fighting and undermined by the decisions by our governments and organisations that don’t value people?

Modern Accounting Standards Values People as Worthless

The key to understanding why people and communities seem like they are always fighting for survival today is that the tools and structures of financial accounting such as IFRS and GAAP, struggle to capture human value in any meaningful way. This creates perverse incentives and narrow decision making, especially in large, cost-driven organisations, or in our public services that seem intent on keeping people out, rather than supporting them.

People As Costs Not Assets

Sadly in modern accounting techniques people are seen purely as financial costs. Because organisations don’t own you, you cannot be considered valuable even if you are a highly skilled expert working there for 20 years. (The system is so perverse only owned slaves count as accounting ‘asset’)

Without a value in economic terms, you are only represented on the balance sheet by the costs that you create. So the value you represent to a government or organisation is purely whether the cost of you is less than the value of the thing you do.  To an economist, you have no other value.

Communities Are Being Priced Out of Our Cities

Similarly, the benefits of communities are equally ignored in accounting practices. Communities are increasingly being financially squeezed out of shared spaces, particularly in cities, as their benefits are only really represented by the income generated when they rent or own a space. Meaning that the only way that an accountant can increase the value of a community more is by charging them ever more for the space they occupy. A report by locality identified the sale of over 4,000 public spaces between 2012 and 2018, often due to financial pressures on councils.

People As Costs To Be Minimised by Management.

The idea is that people are seen as a cost to be minimised. This thinking feeds its way into almost every management decision. Everything becomes about minimising the cost of people vs the thing they produce. Whenever there is a cost to be minimised or a profit to be maximised the easiest and most likely thing is that people will be cut in management systems.

The Race to The Bottom.

The devaluing of people becomes a race to the bottom. If people are seen as purely a cost at every stage it creates an environment where every organisation is trying to devalue the cost of their people as close to zero as possible. Taking to the extreme the ultimate employee costs nothing. Even if you WANT to provide training benefits and invest in people, in our economic system you will end up risking being undercut & replaced by someone who can do it cheaper.

The Evolutionary Trap of Devaluing People.

Lowering the cost of people becomes an evolutionary trap. Because our organisation gets funding based on the extent they are able to devalue the cost of their people. The ones that don’t minimise staff costs are put under pressure by accountants working for the financial system to cut costs at every stage. Meaning that if you don’t cut the costs of people other organisations will get the investment. Similarly, public services such as the NHS are under constant pressure to cut costs or have power taken out of their hands.

Closing The Trap

The reason it is an evolutionary dead end is in that reality the OECD reports on Human Capital: Suggest that investment in skills and education is a major driver of economic growth, yet is not reflected in corporate balance sheets. According to a report by Yale “Investing in people often leads to increased employee motivation, greater job satisfaction, and improved productivity, all of which can lead to more innovative ideas that can help the business to grow”. So if you invest in building up your people you are more likely to innovate and leave the cost-cutting organisations behind.

“Without innovation, public services costs tend to rise faster than the rest of the economy. Without innovation, the inevitable pressure to contain costs can only be met by forcing already stretched staff to work harder.” 

Mulgan G. & Albury D. (2003) Innovation in the public sector. Strategy Unit, London 2008.

The Community Evolutionary Trap.

Communities are victim to a very similar evolutionary trap. Those that operate are forced to pay higher rates to use space. This usually results in ever higher costs for tickets or donations to run these events or risk being priced out of the space. Inevitably this mean the richest people in the richest areas are more likely to have access to community spaces. 

Increased Inequality as a Result of Community Costs

Research (NIH) such as the fact has pointed to the trend that as costs for using shared spaces increase, they disproportionately exclude lower-income groups. For example, community centres in affluent parts of a city might continue to receive funding and maintain low fees because they serve a population with greater discretionary income, while those in less affluent areas may struggle to cover costs. Low-income people reported traveling over three times as far to reach non-fee settings relative to comparable settings which require a fee. (Utah State University) 

The Costs Of Communities Make the System Ever More Expensive.

The Hierarchy of Social Intervention describes how the disintegration of community means that public services have to resort to expensive and untargeted top down interventions. This is as officials lack of knowledge about the people they are supposed to help. Not only is this inefficient, meaning that decisions are made when they can be least expensive, but it becomes ever more costly and unsustainable for public services to replace missing communities.

Community Investment Are Also A Powerful Driver of Growth

Research by Robert Putnam in Bowling Alone demonstrates that robust social capital, formed by active community engagement and trust, can boost local economic performance. Communities with strong social ties are more innovative, resilient, and better at attracting investments, which in turn can raise property values and stimulate economic growth.

Whereas SOPACT Report evaluations (using Social Return on Investment) often reveal that every dollar invested in community programs can yield multiple dollars in economic and social benefits. far exceeding what traditional financial returns would suggest. Organisations like the New Economics Foundation have documented these multipliers extensively. If you would like to learn about establishing your own community group please read this guide)

If you would like to learn how to create and manage your own community projects please read my complete guide here.

Closing The Community Evolutionary Trap.

The evolutionary trap of the raising of costs for community services, both increases inequalities at the same time reduces the economic benefit to those communities. So economic community exclusion leads to the financial decline of an area in the long one as well as increased inequality. So over time communities as a whole would develop with pockets of wealthy community and large areas of isolated deprivation pulling down the overall economic prosperity of the city. Whereas other cities that kept their low cost access to community spaces will likely outperform the unequal cities.

Examples

Example 1: United States – Detroit, Michigan

• What happened: Post-World War II, Detroit saw a boom followed by rapid decline. Suburbanisation, racial segregation, and disinvestment in public services like libraries, community centres, and parks hit the inner city hard.
• Trap mechanism: As services were cut and costs shifted to users, many communities lost access to quality spaces, education, and opportunity. This led to out-migration, increased inequality, and long-term economic decline.
• Result: While some wealthy suburbs thrived, the city overall suffered from reduced tax base, high crime, and hollowed-out public infrastructure. The entire metropolitan area stagnated economically for decades.

Example 2. UK – London

• What happened: London has seen a steady erosion of affordable community space, youth centres closed, libraries shut down, and rising rents for community halls.
• Trap mechanism: These closures disproportionately affected lower-income communities, reducing their capacity to self-organise, connect, and build resilience. Wealthier areas often retained access through private means.
• Result: While London’s financial sector remains strong, socio-economic polarisation has grown. Entire boroughs have gentrified while others experience entrenched deprivation. Studies show this inequality undermines overall well being and productivity.

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Example 3. Brazil – Rio de Janeiro

• What happened: Poor Favela communities were historically excluded from infrastructure and affordable public services. Attempts to revitalise often focused on short-term “clean-up” rather than sustained investment.
• Trap mechanism: Instead of integrating marginalised communities, investment was directed towards elite infrastructure (Olympics, World Cup), while community access remained limited.
• Result: Inequality widened, social unrest increased, and the economic benefits of big projects were short-lived. Today, many formerly vibrant working-class areas are struggling, and the whole city faces increased instability.

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Example 4. Germany – Leipzig vs. Berlin (comparative)

• Leipzig: In the 1990s, Leipzig invested heavily in maintaining affordable community services and supporting integration.
• Berlin: Simultaneously, Berlin went through austerity measures and privatisation of social housing and community spaces.
• Result: Leipzig experienced a cultural and economic renaissance, often dubbed a “phoenix city.” Berlin, meanwhile, has faced increasing housing crises and inequality, despite being larger and more affluent.

The Community Social Disinvestment Trap

Access to low-cost community infrastructure (parks, halls, libraries, youth centres, etc.) plays a crucial role in social cohesion, opportunity generation, and long-term resilience.

When this access is removed or monetised, poorer communities are excluded, inequality grows, and even the economic ‘winners’ lose out over time due to rising social instability and stagnating innovation.

Cities that invest in inclusive, accessible community services tend to be more adaptive, cohesive, and economically productive in the long run.

Other Reasons For Undervaluing People and Communities.

Whereas the accounting standards and their influence on management are at the core of disinvestment in our communities. There are other factors in decision-making that exasperate the problems:

1. Cognitive Bias and Short-termism

Our organisations and public services are plagued by biases toward short termism. Research in behavioural economics highlights cognitive biases like “present bias,” where immediate benefits overshadow long-term gains. Organisations and governments are influenced by quick wins, such as short-term profits or electoral cycle, which makes investing in communities and people less attractive, as these investments often bear fruit only in the long term.

2. Power Dynamics and Hierarchical Structures

Social psychology demonstrates that hierarchies within organisations and governments often create distance between decision makers and those affected by their decisions. A phenomenon called “psychological distancing” occurs, leading decision-makers to undervalue or disregard the emotional and social impacts on communities, focusing instead on abstract metrics such as productivity, profit margins, or votes.

3. Misalignment of Incentives

Organisational theory points out that reward systems within institutions usually prioritise metrics that do not align with genuine community well being. Often we fail to capture in numbers what really matters to people. Performance indicators in governments (such as GDP growth or employment statistics) and corporations (quarterly earnings, shareholder value) rarely reflect true societal health and community cohesion.

4. The Illusion of Control and Predictability

Complexity science and systems theory shows that organisations and governments prefer predictable and controllable outcomes. The Spiral Control and Power describes the psychology of decision makers become locked into a self reinforcing loop. Communities, however, are complex adaptive systems characterised by unpredictable interactions, emergent outcomes and wicked problems. This unpredictability creates discomfort for organisations, pushing them to prioritise simpler, more measurable outcomes even if these fail to reflect genuine community needs.

5. Lack of Direct Feedback Loops

Effective valuation of people and communities requires responsive feedback loops. Organisations rarely truly capture the outcomes of their work. Bureaucratic structures in governments and large organisations typically delay or distort feedback from communities. Leading to failure demand and struggling organisations and public services. Consequently, policy making and organisational decisions become disconnected from real-world impacts, weakening the genuine valuation of community perspectives. This failure ultimately leads to public services such as the NHS to produce ever more new plans as they go through cycles of stress and failure.

The Consequences of Underinvestment in People:

All of this devaluing does have significant consequences for society. Mental health referrals for children and young people have surged, with a 50% increase between 2020/21 and 2022/23. (Health Foundation). Whilst in the UK 2.8million people are now too sick to work, estimated to cost £70billion per year by 2030,  whilst the NHS fails to invest in responding and addressing the unmet needs. (Read about how our NHS can transform our society here)

Is it any wonder that we have a mental health crisis running riot across our society;  when from a young age people are now told essentially they are worth nothing? They have no value and in fact they are a cost to be minimised. This stupid way of accounting is stopping us from investing in the things that matter.

Underinvestment Leading to Low Growth

The UK has been plagued by a lack of growth in it’s economy in recent years. One of the main explanations is due to a lack of investment in the future. A parliamentary report claimed that the UKs low economic growth was tied to a lack of investment.:  

“in both the public and private sectors. Investment provides the building blocks, such as in infrastructure, technology and skills – for future productivity and economic growth. Researchers note that this is a long-term issue, with total UK investment as a proportion of GDP lower than in other G7 countries in almost every year over the past 30 years, according to International Monetary Fund data.” UK Parliament

Survival of the Fittest Or  Survival For Those That Set The Rules?

The economic rules are no accident. They are written by and for the benefit the richest in our society. As Organisations such as Oxfam argue. The concept of Survival of the fittest is in fact a self serving concept of Social Darwinism that is spread by those in power and wealth that they are there simply because they are better than anyone else. Everyone who is poor must have done something to deserve it. Although evidence suggests in reality luck is the biggest factor: With luck accounted for 55% of people’s success (Forbes)

Investing in People For a Better Future.

If we want better and more resilient and healthy communities and organisations. We need one that invests in growing people’s skills and capabilities. Telling people that they matter and invests in protecting & developing their skills. We have to value people gaining knowledge experience and skills. 

Communities Build Resilience

Community resilience is usually associated with social relationships and the activation of local resources that enable communities to cope with, counteract and anticipate unhealthy stressors (Local Govenrment Association) People are far stronger when they work together. We have to enable people to build stronger relationships, build collaboration and communicate to adapt to an ever changing world. Relationships and community is extremely valuable. Yet it is being eroded out by a commercial system that wants us to live in isolated rabbit hutches dependent on others.

Value Creation is The New Focus

Interestingly, fields as far a part as manufacturing  (Value Stream Mapping)  and project management have changed to now define their goal not as producing things, but as producing VALUE for their customers. (PMI) Why? Because what point is producing products that people don’t value?

It’s Time To Stop The Disinvestment in People and Communities.

It’s time we changed our outdated and inhumane accounting system to reflect the quality of staff and people in society. It is the only way that we can invest in creating a truly flourishing society.

Our people and communities are suffering. The only way to make a change is to make a positive social impact by investing in people and communities. The way that accountants and managers view the world means that people are worthless.

We need to stop disinvestment in our community and people. Communities are is essential for our health happiness and wellbeing. Not a premium subscription add-on for the most wealthy.

We must put value in our humanity so that we invest time and effort in creating a better future for us all. What our your thoughts on how we can better value humanity?

If you would like to get funding and investment into your community projects please read my complete guide here.

Conclusion

If we want to make a positive social impact and change our people and societies for better. We need to urgently reject the outdated financial models that treat people and communities as disposable costs rather than valuable assets. It creates a self harming system that devalues the best of human qualities. Our accounting systems and organisational incentives must evolve to reflect what truly matters: human capability, innovation, resilience, and the immense social value created by thriving communities. Investing in people is not just morally essential, it is economically advantageous. When we value human capital and nurture community bonds, we unlock sustained innovation, happier healthier sustainable societies, and robust economic growth.