The Value of Everything

United Nations Environment Programme (2015)

Discussions regarding the global financial system often happen without a complete and robust understanding of the total value, impact and relevance of all stocks and flows. Indeed, even the “Value of Everything” is not known, insofar as that being measured as the total present day market value of all global capital assets, let alone the relevance of ongoing flows of commerce as they impact the system. The purpose of this paper is to begin the process of clarifying global asset value especially as may be affected by the sustainability (or lack thereof) of financial systems, and not just that which is represented by institutional assets under management. Often such attempts to assess the value of financial markets only look at total managed assets by financial institutions, or through attempts to assess somewhat isolated international money flows via say Community Development Financial Institutions alone, among what is in effect a series of partial analysis on this question that exist in the literature. This paper, therefore, will answer this question of what is the actual total value of all global asset classes individually and in aggregate, towards helping inform money flows as they relate to this overall global stock, and how do they or can they influence total value, as well as how should these stocks and flows shift to enable the financial system to become truly sustainable and how to measure for that. Attempts have been made to assess the value of global assets but they are always insufficient for purpose, either missing categories such as the value of state-owned enterprises, the value of people’s homes, the true nature of cash in the market and more. Such partial analysis has revealed useful aspects of this single total value figure, which we will make good use of, but our picture will be holistic and complete, or will certainly attempt to be so. The first place to start then is in establishing categories of assets needed to be understood in order to fully assess a static, present day Value of Everything. We start with a look at publicly traded companies, fixed income as an asset class, as well as property owned by individuals or in managed portfolios. These are the three largest categories of assets by value. State-owned enterprises need to be added to this picture as does the total value of infrastructure portfolios (both through direct investment and project finance). Private equity and venture capital are rising in relevance and they too will be assessed as will the value of so-called real assets encompassing forests, commodities and more, and finally the value of issued dollars in the market both in cash and in the nominal value of instruments not directly tied to assets. This analysis will represent a first single static Value of Everything, in effect the total value of global assets.

Monograph