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Farewell, Wall Street

David Korten heralds agenda for a new economic model

By Paul Smyth · June 10th, 2009 · News

David Korten decided early on to devote his life to a noble cause — addressing world poverty — and spent years in Africa, Central America and Asia setting up schools to bring American business ideas to developing countries. That might be reason enough to hear his perspective on contemporary economic events and meaningful alternatives this weekend at Imago’s Earth Spirit Rising conference at Xavier University.

Even more interesting is Korten’s realization that the very economic teachings he was promulgating overseas were themselves part of the problem, persistently failing to provide people with the kinds of lives and societies they wanted in both developed and developing countries alike.

“In 1992, my wife and I realized that poverty and environmental destruction in Asia were the result of economic models centered in the U.S.,” says the former Harvard Business School adviser. “We concluded our primary responsibility was to return to the United States and educate people based on what we had learned abroad.”

Since then, Korten has devoted his expertise to developing alternative views of ourselves and the larger world. Central to his work is the idea that, for better or worse, we’re wedded to our cultural stories: what we say and think about ourselves, our actions and our place in the world.

He believes we need new cultural stories that are true, fair and based on real wealth for many. A locally responsible Main Street, not Wall Street, should finance local and regional activity in a true market-based economy.

In his 2009 book, Agenda for a New Economy: From Phantom Wealth to Real Wealth, Korten advocates shifting economic priorities from making money for a few wealthy people to creating better lives for all.

“Wall Street is very effective at doing exactly what it is designed to do,” he says. “To get a different outcome, we need a different design and a different understanding of wealth and the sources of human happiness and well-being.

“We have an ideology that says profit is everything, that we do best when we follow individual greed and that there should be no barriers to the movement of corporate money or goods. This creates a morally bankrupt money system accountable only to itself and detached from reality.”

This ideology carries a steep price: It motivates and rewards behaviors that destroy community life and the environment while creating power and income inequalities that have enormous social and health consequences.

Instead, Korten focuses on building a morally centered, values-oriented alternative market that’s accountable to the community.

Local retail just the beginning

For a city like Cincinnati, this alternative begins with supporting and raising awareness of the value of local shops in Over-the-Rhine, Northside, Mount Adams, Clifton, Covington and other communities.



“Neighborhood centers with locally-owned shops, coffeehouses and restaurants are a good start,” Korten says. “But local retail is just the beginning. A city like Cincinnati needs to do more. The next step is to develop local banks and financial institutions that are integral parts of the community.”

From there, cities should encourage local business growth through organizing networks like the Business Alliance for Local Living Economies (www.livingeconomies.org) and the American Independent Business Alliance (www.amiba.net). These networks foster relationships among local independent businesses and give them a coherent, politically effective voice.

With a foundation of local businesses and banks, Korten encourages places like Cincinnati to redevelop nearby farms to foster local food independence, reclaim green space and create more walkable and bicyclefriendly communities. These are some of the first steps to building a market economy that yields what he calls “real wealth” — wealth that makes people healthier and rewards the best, not the worst, of human nature.

To produce real wealth, Korten says, we need to change what we measure and manage.

“We have to fundamentally reconstruct the economy from bottom to top,” he says. “Indicators like gross domestic product need to be replaced with indicators of individual and community health.”

Korten aims to cut off “swashbuckling privateers” engaged in get-rich-quick speculation that creates economic instability, misallocates resources and produces little value in return.

“Our hope lies not with the Wall-Street phantom wealth machine,” he says, “but rather with the real-world economy of Main Street.”

‘Act as if we have time’

If American society continues in our current direction, Korten predicts, we’re headed for deeper economic crisis, total environmental collapse and, likely, total social collapse.

“Our environmental destruction might be so severe that there’s no turning back,” he says. “But to conclude it’s too late is a self-fulfilling prophecy. We have to act as if we have time and put everything into it. We have to devote our energy to actions that bring us into balance.

“We’re fortunate the financial collapse came first. That can be fixed. Environmental collapse is forever in human terms.”

While Korten calls President Obama a “deeply refreshing” change, he sees Obama’s responses to the Wall Street meltdown as essentially identical to those of President Bush.

“This reflects the enormous political power, access and influence Wall Street institutions carry,” Korten says. “It also documents we do not have a strong, well-focused political movement with a vision of a very different economy and, in particular, a very different financial system.”

The fact that Obama’s staff invited Korten’s associate, John Cavanaugh of the Institute for Policy Studies, to meet with the President and members of Congress at a recent fiscal responsibility summit is a step in the right direction, but a small one.

“Compared to the people the Obama Administration brought in from Wall Street, we don’t have much influence right now,” he says. “John was one of maybe 100 people at the White House meeting.

“Most progressive groups are committed to the idea of supporting Obama, but we don’t have an overall vision. We’ve been conditioned to believe we have only two economic models: the existing capitalist model or centralized government control like socialism. Too few voices are articulating a vision of a real market economy.”


DAVID KORTEN is one of four keynote speakers at EARTH SPIRIT RISING, a weekend-long conference about ecology, spirituality and living economies presented by Imago at Xavier University Cintas Center June 12-14. Get details at www.earthspiritrising.org.


 
 
 
 

 

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