Using RCF to assess UK resources

The Real Capital Framework, RCF, fits very naturally with the logic of Modern Monetary Theory (MMT).
MMT says the binding constraint on public spending is real resources, not money.

RCF does something MMT has often lacked operationally:

It provides a systematic way to measure the condition and availability of real resources before the budget is written.

We are proposing is essentially a Real Capital Pre-Budget Assessment (RCPA).

The foundations of Doughnut economics provide a useful starting point.They require us to identify the social floor of provision of care, (corresponds to the capacity of social capital) as well as the environmental ceiling, of the pressure the economy can bring on natural capital. (Corresponds to the negative performance of built capital owned by social capital)

Below is a structured methodology for testing the approach for the UK, but the principles apply to any country.

The way to test the approach is to go through the method step by step, and pause at each step to see what is learned and if the information from the step informs the purpose of the exerise.

A Real Capital Pre-Budget Assessment Method

For Application in an MMT Policy Framework

1. Purpose of the Exercise

Working Hypothesis:Before a national budget is constructed, the government should understand the state of real capital assets that enable the economy to deliver essential services while staying within ecological limits.

In an MMT framework:

$\text{Fiscal space} = \text{Available real resources}$

The Real Capital Framework says that it is not resources (which are flows) that are at the heart of the capabilities of an economy, but the real capital(stock), which is

That which is used in the production of goods and services, but not used up

Therefore , the central policy question becomes:

What real capital assets are available, what is their status in terms of capability to fulfil needs, and what is under pressure. Which capital assets are putting negative pressure on other assets?

The assessment aims to identify:

shortages in social provisioning capacity
excessive pressure on natural capital
underdeveloped infrastructure assets
strategic vulnerabilities in key systems

The output is a set of priority investigation areas for the national budget.

2. Conceptual Framework: Real Capital

The analysis treats the economy as a system of interacting capital stocks.

Core categories with examples:

Natural Capital	Infrastructure / Produced Capital	Social Provision Capital	Human Capital
ecosystems soils water systems minerals climate stability	energy systems transport housing industrial capacity water and waste systems	Organisations health systems food systems education care systems housing provision	People Skills Capacity Health

Industries draw on natural capital and infrastructure to deliver social services. The heart of the process is to map industries against human capital and natural capital in a matrix of four main parts.

The diagram above shows the four parts of the matrix. The left column (A) represents the social capital. Here, you can choose the industries – from the SIC classification – under scrutiny.

Column B represents the social performance of these industries. In the example below we use contribution to GDP and contribution to employment.

Column C represents the two types of natural capital, biological and lithosphere. Biological capital includes the main planetary cycles of the planetary boundaries – the water, carbon and nutrient cycles. The lithosphere is a source of real capital, metals and minerals.

The last column represents the providing for essential human needs, we suggest using the ones from Doughnut Economics.

3. Step 1 – Identify Core Social Provision Systems

Begin by defining a small number of essential provisioning needs. This is for section D

Examples for the UK:

Food system
Housing
Energy
Mobility
Health and care
Water and sanitation

These correspond to the social foundation of the Doughnut.

4. Step 2 – Industry Mapping

For each system, identify the industries that enable it, using national industry classifications (i.e., UK SIC). This is section A

Example – Food system:

Agriculture
Fertiliser production
Food manufacturing
Transport and logistics
Retail distribution
Water and waste treatment

This produces a provision map.

5. Step 3 – Social Provision Matrix

Construct the matrix along the lines of the example above. You can use excel or google sheets or construct a MIRO diagram for collaboration.

Industries × Social Needs

Use a scoring system blank – 3 where 3 means that the industry is the primary provider for the need. Blank means it has no provision.

Diagram shows where add industry importance (D) and industry use of natural capital (C).

For each social need, mark the cells in section D as above.

Then assess each of the industry’s ability to provide. For the numbered cells, colour code them according to capital maturity. Maturity is the extent to which the industry has the capability and capacity to provide for needs. (This is opposed to its current performance, which might be below its capacity.)

Colour coding:

Green – mature capacity
Orange – constrained capacity
Red – inadequate or fragile capacity

Example indicators might include:

domestic production capacity
workforce availability
infrastructure constraints
affordability or accessibility

This identifies gaps in service provision capability.

6. Step 4 – Natural Capital Pressure Matrix

We now move to section C

Industries × Natural Capital

Natural biological capital may include:

biodiversity / ecosystems
water systems
soils

Lithosphere capital may include:

minerals and materials
fossil fuels

First, identify the extent to which the industry uses the natural capital.

Blank = not at all, 3= to a large extent, the industry is totally reliant on the natural capital. 2 = is moderately reliant and 1 is somewhat. A score of 1 suggests other alternatives exist.

Next, score the industry according to the pressure it puts on the natural capital by colour coding the cell.

Colour coding:

Green – within sustainable limits
Orange – approaching limits
Red – exceeding sustainable thresholds

This identifies ecological stress points.

7. Step 5 – Identify Capital Immaturity Zones

Overlay the two matrices.

Four cases emerge:

Social Provision	Natural Capital	Interpretation
Green	Green	Mature system
Green	Red	Production with ecological damage
Red	Green	Underdeveloped capacity
Red	Red	Structural crisis

The final category becomes priority sectors for investigation.

The industry performance – contribution to GDP or employment might also inform the nature of the crisis. For example, if an industry has a high impact on biodiversity, but a low GDP contribution is could signal there is little money to make large changes.

8. Step 6 – Deep Dive for Red Areas

For sectors identified as critical, conduct a deeper assessment.

This includes:

identifying the real capital assets involved
analysing constraints on capacity
assessing ecological impacts
identifying missing infrastructure
evaluating workforce and skill availability

Example:

Food system deep dive might examine:

farmland condition
fertiliser supply
nutrient recycling infrastructure
regional food processing capacity
logistics networks

9. Step 7 – Build an Asset Register

For each critical sector, create an asset register aligned with ISO-style asset management principles.

Assets may include:

Infrastructure assets
Natural capital assets
Production facilities
Critical supply systems

For each asset record:

condition
performance
ecological impact
strategic importance
lifecycle status

Note that governments may not own or even operate assets. However, if they are responsible for the running of the economy, and these assets are used, then good management (ISO 55001) demands that they know the factors above.

10. Step 8 – Gap Analysis

Compare the current asset base with the required asset base needed to deliver mature provisioning within ecological limits.

Examples of gaps might include the investment needs as outlined below.

The gaps can be presented in capacity terms, or in functions or in monetary terms, the investment needed to close the gap.

Natural Biological capital	Natural mineral capital	Built Capital	Social capital	Human capital
soil fertility	Aluminum recycling	renewable energy capacity	Technical training colleges	Skilled construction workers
		housing construction capacity

11. Step 9 – Lifecycle and Transformation Planning

Using asset management principles, identify:

investments required to restore or expand assets
upgrades needed to reduce ecological pressure
timelines for transformation

This allows estimation of:

investment scale
labour requirements
material requirements

12. Step 10 Capital Gap assessment against budget proposal

Budget	Natural	Built	Social	Human
-Expenditure			+ Firms	+ Benefits +Wages
+ Revenue			-taxes	-taxes
Effects of spending	On environment Metals, fossil reserves, mineral reserves	On built infrastructure like roads, water infrastructure, power generation	On solidity Profits Bankruptcy	on health prosperity economic stress

The table above shows the monetary flows to the types of capital that are in the economic system, namely from Government to ministries to firms, and then to private individuals. These financial entities pay taxes to match the initial expenditure. This economic activity, added to the activity of the private sector has physical effects on the combined real capital of society. This is represented in the bottom line of the table.

The diagram above shows the planned expenditures for the various categories of the UK budget.

Given the estimates of the investment needed for each critical area, it should be possible to estimate the impact of the planned spending on the capital categories involved in the critical areas identified.

ISSUE: XXXXX

Budget item	Natural capital	Mineral capital	Built capital	Social capital	human capital
1	-2	+1	-3	+1	+2
2	1	0	-1	0	-1
3	-3	+1	+3	0	0
….. 26
Sum	-4	+2	-1	+1	-1

According to table above, the budget will have an overall negative effect on the issue.

Step 11 – Input to Budget Formulation

The results feed directly into fiscal policy.

For each priority sector identify:

Real resource requirements
Labour and skills needs
Infrastructure investment
Research and innovation needs

Under MMT principles:

If these real resources exist or can be mobilised,
the government has fiscal space to fund the transition.

Budget allocations can therefore be guided by:

closing capital maturity gaps
reducing ecological pressure
strengthening national resilience

13. Outputs of the Process

The pre-budget assessment produces:

A national capital maturity dashboard
A list of priority sectors
A portfolio of critical assets
A quantified investment programme
A roadmap for structural transition

14. Why This Approach Is Useful for MMT

MMT economists often emphasise that:

Money is not the constraint – resources are.

This methodology makes that principle operational by:

mapping real resources directly
identifying where capacity exists
identifying where resources are scarce
highlighting ecological constraints

In other words:

It translates MMT theory into planning practice.

15. Benefits of the Approach

The method:

connects fiscal policy to real economic capacity
integrates ecological limits into planning
reveals hidden structural vulnerabilities
guides investment toward system transformation
supports strategic long-term planning

It also shifts the pre-budget debate from:

“How much money should we spend?”

to:

“What real capital must we build or restore?”

16. How the Exercise Could Be Conducted

For the UK group workshop:

Select two systems (e.g., food and housing)
Construct the two matrices
Identify red areas
Map the relevant assets
Conduct a quick gap analysis
Discuss fiscal implications

Within a few hours the group would see how real capital analysis informs budgeting.

We need a new discipline

1. Purpose

Human Provisioning Systems (HPS) is a proposed scientific and professional discipline dedicated to understanding, designing, and governing how human societies meet fundamental human needs within biophysical and social limits.

From Anger to Advocacy manual. Putting Science in context.

Turn Anger into Action with Science.

Struggling to make policymakers listen? This free manual gives activists and scientists a powerful 11-step toolkit—the Real Capital Framework—to transform frustration into credible, compelling advocacy.

Developed from real-world campaigns in Sweden, this guide shows you how to:

Translate scientific data into clear, targeted demands.
Identify and measure threatened natural, built, social, and human capital.
Hold authorities accountable using their own policies and commitments.
Create one-page briefs and pamphlets that speak the language of decision-makers.

Whether you’re protecting old-growth forests, fighting pollution, or advocating for community health—this framework helps you build a watertight, science-backed case that can’t be ignored.

Download now and start advocating with impact.

Concept Note: From Analysis to Action

Bridging the Gap: The Real Capital Framework as a Tool for Academic Advocacy and Activism

Beyond Growth and Degrowth: The Compelling Vision of Capital Maturity

For decades, our economic discourse has been trapped in a false choice between two unsatisfying futures. On one side stands the familiar model of endless economic growth. This path that relentlessly consumes natural resources and risks environmental devastation. On the other is the alternative of degrowth, a concept often perceived as a narrative of reduction, scarcity, and diminished quality of life. This document introduces a third, more inspiring path forward: the pursuit of Real Capital Maturity. This vision reframes our ultimate economic goal not as perpetual expansion, but as the achievement of a stable, high-quality, and regenerative state where the fundamental needs of everyone are met with sufficiency and efficiency.

Economists dominate policy making for now, but there might be a way around them

One thing that gets my goat is the way economic thinking – with its stupid ideas about the way people work (maximizers) and the way companies work (increasing marginal costs) and the way nations work (banks lend other people’s money) – pervades policy making. Most politicians seem to have swallowed economics 101. I made it my personal crusade to find ways to get around this disingenuous bunch. I might have found something. Read on.

I understand the appeal. It all comes down to money anyway, why not just manage a nation based on money – as long as it looks like all is under control why worry? But as I point out in my Real Capital Blog, things you want to keep functioning – health, forests, railways, water cycles, metal access – get downgraded to a point where they might collapse.

The alternative is complicated. Say you are a scientist that sees that a city has got 3 years left of groundwater. Your report will probably end up nowhere. The machinery, to get from warning through the engineering, through the companies pumping, through the city administration, through the planning, through the political leadership is so complicated and you would need specialist knowledge in every layer to be taken seriously. Just finding out who is actually responsible for what is months of work. And as a scientist you won’t have a workable alternative.

Or, it USED to be that way. You can now get AI to do all the heavy lifting. I tried it with the Real Capital Framework. Get this: there is nothing new with Real Capital, in all its components, the ideas have been around a while (read accessible to AI). The only trick to getting AI to do the work is to point it in the right direction.

This is where AI prompts come in. If you just get the prompts right, in the right order AI will sail through the spaghetti of causes, responsibilities, effects, etc to produce clear, policy decision basis reporting synthesising dozens of professional domains.

This is what economics should be, and AI can prise the role from the sweaty grasp of economists.

Soon, AI will do system dynamics Ravel simulations for you so you can show your work.

I am testing AI prompts just now, and the results are encouraging.

Subscribe to my Patreon to keep up to date.

The Challenge

This is a letting my heart out moment and I can’t promise it is going to be coherent. But I see some very important things that have happened recently as stakes in the new ground of economic thinking and in politics. There is a challenge laid down to find something new, built out of the old

How to use the Real Capital framework on national budgets

Most national budgets tell us how much money governments plan to spend and collect. But they rarely say anything about whether the nation’s forests are thriving, its infrastructure is decaying, or whether citizens are healthy and capable of sustaining the next generation’s wellbeing.

In other words, the budget tracks the money — but not the real foundations of value that the money is meant to mobilize.

That missing link is what the Real Capital Framework was created to address.

The Real Capital Framework for local advocacy-a how to guide

The Real Capital Framework (RCF) helps scientists and policy advisors create compelling decision basis reports for policy makers. Using the RCF you will present the science in a way that policy makers will find actionable.

However, there are a lot of groups out there who want to get their message across – citizen advocates, nature protection associations, local community developers etc. So this post is for you. It is early days, though. What follows is the RCF adaptation for testing.

Economists see humans as homo economicus? Still?

I really recommend listening to this Youtube with Richard Murphy, Emeritus Professor of Accounting Practice and John Christensen, co-founder of the Tax Justice Network.

The subject was the idea of homo economicus – the supposed rational economic actor at the heart of mainstream economics – and its critics.

John traces the origins of the concept back to the late nineteenth century, when economics shifted from being a branch of moral philosophy into the mathematically-driven neoclassical framework most of us were taught at university.

One of the key figures was Francis Ysidro Edgeworth, a mathematician and economist at Oxford. Edgeworth drew on Jeremy Bentham’s utilitarian philosophy – the idea that human beings are rational calculators of pleasure and pain – Edgeworth sought to create a perfectly tidy model of human behaviour. We were, he argued, calculating machines engaged in constant cost-benefit analysis, each of us pursuing our own utility.

Modern models of the economy, like – the DSGE models used by the Bank of England and the UK Office for Budget Responsibility – still rest on the fiction of a single rational agent – or homo economicus – who knows everything and always restores balance.

And these models continue to shape policy. They produce neat forecasts that always return to equilibrium, because the assumptions guarantee that outcome. They are sadly blind to the lived reality of power, inequality, exploitation and environmental breakdown.

Investors in peace, one of my projects, something else. We don’t see homo economicus, we see homo pax. Our true nature is peace and as long as we don’t realise and get to enjoy and appreciate that, we will continue to be homo errorum leading to homo insatisfactus (man of error, unsatisfied man).

This is where Investing in peace and political economy overlap: as long as economics and business continue to model their art on misguided views of what it is to be human, they will continue to guide policy in the wrong direction.

If you are working with economic policy we urge you to look closer at yourself: what is it you really want, what is driving you? Can it be that is something you share with the rest of the people on the planet?