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Environment

It's Time to Build a New Economic Model

By David Korten, YES! Magazine. Posted September 19, 2007.


If there is to be a human future, we must bring ourselves into balanced relationship with one another and the Earth. This requires building economies with heart.
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If we are to slow and ultimately reverse the social and environmental disintegration we see around us, we must change the rules to curb the pervasive abuse of corporate power that contributes so much to those harms.

Taming corporate power will slow the damage. It will not be sufficient, however, to heal our relationships with one another and the Earth and bring our troubled world into social and environmental balance. Corporations are but instruments of a deeper social pathology revealed in a familiar story our society tells about the nature of prosperity.

Empire Prosperity Story

The prevailing prosperity narrative has many variations, but these are among its essential elements:

  • Economic growth fills our lives with material abundance, lifts the poor from their misery, and creates the wealth needed to protect the environment.

  • Money is the measure of wealth and the proper arbiter of every choice and relationship.

  • Prosperity depends on freeing wealthy investors from taxes and regulations that limit their incentive and capacity to invest in creating the new jobs that enrich us all.

  • Unregulated markets allocate resources to their most productive and highest value use.

  • The wealthy deserve their riches because we all get richer as the benefits of the investments of those on top trickle down to those on the bottom.

  • Poverty is caused by welfare programs that strip the poor of motivation to become productive members of society willing to work hard at the jobs the market offers.

This money-serving prosperity story is repeated endlessly by corporate media and taught in economics, business, and public policy courses in our colleges and universities almost as sacred writ. I call it the Empire prosperity story.

Illustration by Don Baker for YES! Magazine
Few notice the implications of its legitimation of the power and privilege of for-profit corporations and an economic system designed to maximize returns to money, that is, to make rich people richer. Furthermore, it praises extreme individualism that, in other circumstances would be condemned as sociopathic; values life only as a commodity; and diverts our attention from the basic reality that destroying life to make money is an act of collective insanity. In addition to destroying real wealth, it threatens our very survival as a species.

Earth Community Prosperity Story

Consider these elements of a contrasting life-serving prosperity story that looks to life, rather than money, as the true measure of wealth.

  • Healthy children, families, communities, and ecological systems are the true measure of real wealth.

  • Mutual caring and support are the primary currency of healthy families and communities, and community is the key to economic security.

  • Real wealth is created by investing in the human capital of productive people, the social capital of caring relationships, and the natural capital of healthy ecosystems.

  • The end of poverty and the healing of the environment will come from reallocating material resources from rich to poor and from life-destructive to life-nurturing uses.

  • Markets have a vital role, but democratically accountable governments must secure community interests by assuring that everyone plays by basic rules that internalize costs, maintain equity, and favor human-scale local businesses that honor community values and serve community needs.

  • Economies must serve and be accountable to people, not the reverse.

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See more stories tagged with: economy

David Korten is a former economist with USAID, author of "When Corporations Rule the World," and an associate of the International Forum on Globalization.

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Nice article - and the practical solution.
Posted by: thoughtcriminal on Sep 19, 2007 11:50 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Is growth without end possible? Well - yes. Just look at plants. Every year the grass grows, and has been ever since plants colonized the land some billion plus years ago.

What does the grass rely on? Biochemical nutrient cycles, and sunlight, and water. Every year, the grass dies back. In the tropics, it's not so seasonal, though there is a dry and a wet season, often. The planet breathes, you know.

In the end, it's all about energy and information. Information, like a farmer's knowledge of soils and seeds, or a computer technician's knowledge of circuitry and communication protocols. Energy, like that from solar panels, wind turbines and batteries, as well as that derived from burning cow dung and wood chips.

We are moving toward the era of the truly independent operator, as predicted by Edison some eighty years ago. There will be no centralized control of energy or of information, as exists today. People will have their individual power packs, as well as communication devices, and that'll be that. There will be globalized information networks and technology production centers, which will result in localized energy and food production.

Noone will be building computers and solar panels and turbines in their back yards, so the business structures will persist in a more useful and independent form - one not controlled by financial conglomerates. Employees will be the majority shareholders in the corporations they work for.

That's where we are heading.

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» RE: Nice article - and the practical solution. Posted by: Constitutionalist75
An idea whose time has come
Posted by: Constitutionalist75 on Sep 19, 2007 1:03 PM   
Current rating: 5    [1 = poor; 5 = excellent]
But there is a need to be much more specific. How exactly can we the people bring this social transformation into real existence?

1. Pool resources to acquire a parcel of land upon which to build a self-reliant community of friends and family that maintain their own buildings, grow their own food, sew their own clothing and keep each other as healthy and content as reasonably possible.

2. Eliminate the need for money by creating a system of labor credits, each hour of work equal to one labor credit, thus preventing the emergence of any wealthy class of egotistical parasites.

3. Attract, promote and teach the skills necessary to maintain the community, like a doctor, carpenters, cooks, experienced clothing workers, and anyone with a skill or talent the community can use for everyone's benefit.

4. Practice 100% recycling of all their trash and waste, composting kitchen scraps and processing their sewage into fertilizer, and otherwise being very careful never to use materials that are difficult to recycle, but always look for bio-degradable substances.

5. Help to persuade other people who may also be disenchanted with commercial society to also acquire land, or convert their existing properties and establish their own communities according to similar cooperative principles.

For example, if an economic collapse bankrupts a clothing mill, the workers could legally acquire it and nearby land to live and grow vegetable gardens and walk to the factory to produce clothing, not to sell, but for each other and to trade with neighboring villages for what they produce on the principle of: farm and manufacture for family and community and to hell with the "Market". They could call themselves 'Bodork Cooperative Textiles', or whatever name they choose to reflect the fact that they own it together.

Any industrial or high tech complex, to the extent of its safe utility to the people living in nearby cooperative villages could be maintained and its products traded with those and other such villages in exchange for whatever they produce, in other words, a barter system. In fact, an entire regional area could prosper much as it did recently, but in a far simpler, healthier and cooperative way for the benefit of the people living in that area. They would not be rich, but they would never be jobless, homeless or starving.

Then, a regional network of such villages could freely trade with other regions, like the Northeast with the Southeast and the Southwest with the Northwest, or whatever names such areas may choose for themselves after the collapse of dollar commercialism. Some years ago, Joel Garreau wrote a book: "The Nine Nations of North America" describing our natural economic and social regions as they really exist, without national or state lines. If the villages could agree, they might establish their own "North American Union", not ruled by predatory corporations, but by the people themselves, and become a genuine continental free-trade network of eco-tech cooperative villages that carefully surround themselves with miles of healthy wilderness, and thus live in blance with Nature and at peace with each other.

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Right diagnosis, wrong new model.
Posted by: AsteroidMiner on Sep 19, 2007 3:48 PM   
Current rating: 4    [1 = poor; 5 = excellent]
Here is a list of topics to cover:

Yes, the present course leads to our extinction, as I have said
many times before on Alternet/environment

I think you are hooked on the buzzword "community". Making
everything local only creates local tyrants, not real change.

Raise the personal exemption to $200,000 and index it to
inflation.

We need to have a new Constitutional Convention starting over
with the Declaration of Independence and using the internet to
allow every citizen to vote on every issue.

Who is balancing the power of multinational corporations?

Corporations are Quasi-Governments, NOT persons.

Problems we have with democracy that are built into our
"Humanity":

1. Low IQs: People who can't understand that leader=liar, etc.

2. Standard Deviation in IQ is too large. We need citizens who
are more similar in IQ.

3. Instincts:
a. leader-following
b. religion

http://www.celdf.org/DemocracySchool/
RecommendedReadingList/tabid/228/Default.aspx


Get off of this one planet, as I have said before on
Alternet/environment

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» RE: ight diagnosis, wrong new model. Posted by: Constitutionalist75
» RE: ight diagnosis, wrong new model. Posted by: Equality2941
Yes yes yes
Posted by: comp sci grad on Sep 19, 2007 6:21 PM   
Current rating: 5    [1 = poor; 5 = excellent]
This is exactly right. How can so-called Christians continue to support the debasement and devaluation of everything except money?

Greed isn't just a personality quirk - it's a disease that our society is set up to differentially reward. It' s a virus that perpetuates itself when it gains control of the reins of power as it has today.

The greedy CEOs , boards and their apologists- the think tanks, business schools, free market freaks, flat-earthers and corporo-fascist libertarians will destroy this earth and everything in it because they're genetically wired to accumulate, acquire and consume and they're genetically wired to seek to abase, disenfranchise, swindle, steal and have power over and from others.


In this they're a lot like al-queda and the Islamo-fascists, except they want power for themselves and their "system".

Really, the war between fundamentalist Islam and modernity is a war between the rapacious corporations who never one day in their lives thought of doing anything but enslaving people in other nations and the equally sick militant Islamists whose lust for power and control over everyone and everything knows no bounds either.

Of course it's the ordinary people in the planes and in the towers and in Baghdad and Beruit who pay the price when the greed-power junkies start going for each other throats.

It's time to make greed all but illegal- a debilitating career move that ends the quest for power of those who are so convicted.

The 90% of the population that isn't afflicted with these diseases has paid throughout the centuries. We just want to live and see other people live their lives in peace.

What people like us need to do is what we're least inclined to do- identify the greedheads and break and ruin them through laws and tough enforcement.

Put the tax rate for the greasy-haired, coke-snorting dirtbags of Wall Street class back to what it was in the 1950s - 90%.

Tax evaders get treated like what they are- incurable sociopaths who need to be identified and tracked like we track sexual predators.

People convicted of greed would be denied positions of power in society.

It's time for the 90% to get angry, rise up and put their fist in the face of the dirtbag "elite".

They can scream and moan and cry foul and do whatever else they want- we the majority are not asking them what they're philosophical position on criminalizing greed is- we're taking the reins of power permanently so they don't kill us all.

It's the earth and our continued existence or their "freedoms" and "economic liberty". They're a sick suicide cult and we're going to stop them before they stop us all.

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» RE: Yes yes yes Posted by: Constitutionalist75
Community not a decision-making organism
Posted by: Equality2941 on Sep 19, 2007 6:32 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
You know, all the things you say should be done ARE being done:

"Healthy children, families, communities, and ecological systems are the true measure of real wealth."

We have all these things, and in them we are quite wealthy.

"Mutual caring and support are the primary currency of healthy families and communities, and community is the key to economic security."

There exists an abundance of mutual caring and support. Is this not so in your community/family?


"Real wealth is created by investing in the human capital of productive people, the social capital of caring relationships, and the natural capital of healthy ecosystems."

Yes it is, and it is exactly what is being done. Are you in the USA?

"The end of poverty and the healing of the environment will come from reallocating material resources from rich to poor and from life-destructive to life-nurturing uses."

Do we not have capital aready moving by the truckload from rich to poor? Is social spending not 55% of the US Fed budget?

"Markets have a vital role, but democratically accountable governments must secure community interests by assuring that everyone plays by basic rules that internalize costs, maintain equity, and favor human-scale local businesses that honor community values and serve community needs."

Our democratically accountable government already assures (the best it can) that we all play by basic rules. And these rules all combine to maintain equity.

But what is a "human-scale" business? Is it one that is run by a single person? What if she wants a partner and 3 employees to do copy and editing? How about 300? Is a company with 300 employees a "human-scale" company?

"Economies must serve and be accountable to people, not the reverse."

What are "community values?" Name, as an example, one of the values of your community. Are there any human scale businesses that run at cross purposes to this value that you named? Would you shoot the owners, or just revoke their charter?

Finally, under your system, would I have to ask your permission or the permission of some panel to open my shop where-in I repair antique clocks? Would I have to have a license? Would I have to have a degree from a school of horology?

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» RE: Community not a decision-making organism Posted by: Constitutionalist75
» RE: Community not a decision-making organism Posted by: Constitutionalist75
New Economics
Posted by: AsteroidMiner on Sep 20, 2007 3:47 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Reference: "Times of Triumph, Times of Doubt; science and the
battle for public trust" by Elof Axel Carlson, 2006, Cold Springs
Harbor Laboratory

There are 2 categories of ethical theory that are believed in the
US. They are Rights-based theories and Outcome-based theories.
Rights-based theories are in the Declaration of Independence.
Outcome-based theories are utilitarian, the greatest good for the
greatest number. These 2 theories are not carried out. There is a
third theory that is actually acted upon. It is the greatest good for
the biggest bribers, alias campaign contributors alias the richest
1% alias the biggest corporations.

The first 2 theories could be carried out if it weren't for the 80%
who abdicate their right to think for themselves and make moral
judgments for themselves to a group of charlatans who are called
clergy. How else could George W. Bush get elected? Religion
is not a group of ethical theories since religion has nothing to do
with ethics regardless of the false claims of the charlatans called
clergy. For the money given to the rich clergy, the poor receive
nothing except the right to avoid thinking.

Reference:
http://www.geosociety.org/meetings/2003/
prPennStateKump.htm

http://www.astrobio.net/news/modules.php?op
=modload&name=News&file=article&sid=672

http://www.astrobio.net/news/modules.php?op
=modload&name=News&file=article&sid=1535

http://www.sciam.com/article.cfm?articleID=00037A5D-
A938-150E-A93883414B7F0000&sc=I100322

All 3 of the above groups of ethical theories keep us heading
straight for extinction. There is no ethical way out of the
dilemma. It seems that the only moral thing for Homo Sapiens to
do is to go extinct. The way out of this dilemma is to broaden the
scope of your ethical theory to think in terms of the right or the
most benefit for the species rather than the individual. Doing so
is immediately in violation of all 3 ethical systems.

This might seem to have nothing to do with economics, except
that the extinction of Homo Sapiens puts an end to economics.

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» RE: New Economics Posted by: Constitutionalist75
» RE: New Economics Posted by: Equality2941
» RE: New Economics Posted by: Constitutionalist75
» RE: New Economics Posted by: djnoll
» RE: god Posted by: AsteroidMiner
» RE: The demise of man Posted by: AsteroidMiner
No Easy Solution
Posted by: Jeff Hoffman on Sep 20, 2007 1:56 PM   
Current rating: 5    [1 = poor; 5 = excellent]
What's needed to fix the identified problem is a major mental, emotional, and spiritual evolution of the human species, from being a species comprised of self-centered people to one comprised of people who know -- not just intellectually, but who actually FEEL deep in their bones, hearts, minds, cells, etc. -- that we are all part of the same thing, we're all one, "we" being every form of life including air, land, and water. Until that happens, we can preach, propagandize, organize, and do whatever else we want, but no significant progress will be made. A deep spiritual feeling of oneness is essential for a real transformation; mere intellectual knowledge will not suffice, because if people don't really feel this way deep down, they won't make any significant changes.

Please do not take this as an excuse to do nothing. Always fight for what you believe in, because that's the only way you'll have any chance of seeing it come to fruition. But my point is that until enough people feel like we're one with nature, there will not be significant progress on changing our economy from one that's based on destroying the Earth and exploiting people to one that's based on living in harmony with nature and everyone else.

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rfields
Posted by: rfields on Sep 20, 2007 4:46 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
I am gratful for all who are roused by this issue... if only there were more of you. For more to think about consider www.democraticcritique.us.

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The New Marx?
Posted by: Urgelt on Sep 20, 2007 8:53 PM   
Current rating: 5    [1 = poor; 5 = excellent]
Look, I agree with the article's assessment of unregulated capitalism. Left to its own devices, it trends toward monopoly power, horrific wealth inequities, grinding poverty, and all the rest.

However, it's not all that simple to tamper with economic design. The last major attempt to do it resulted in Communism, which turned out to be just as corrupt, if not more so - and imposed misery and destruction upon an awful lot of people.

It's a risky game, playing god with economics.

Aside from its excesses - which are serious - capitalism has not done all that badly. It *has* generated wealth and prosperity on a scale never before seen in human history, and not just prosperity for the rich.

It's perfectly accurate to characterize massive economic aid programs for underdeveloped countries as failing in their purpose, and producing the effects noted in the article. However, it can be argued that this is the product of misunderstanding the way economies grow in developing nations, not an inherent failing in the idea of capitalism. Microlending, education, and small-scale investment yield much better results. Those things fit under the umbrella of capitalism, too.

Alan Greenspan, famously or infamously, depending on your political orientation, arrived late in life to the realization that people are not rational economic units. I'm certain that irrationality will carry over into any system you could possibly design.

I think capitalism is worth preserving. But I'd be happy to see some of the ground rules changed - starting with removing corporate influence in government. That's the main source of our problems - if they call the shots in government, there's no meaningful regulation. We might also consider requiring any corporation which reaches a given size or dominant market share to split, to assure that competition, not monopoly, is the thrust of capitalism. Limit or eliminate multinationals; split them into smaller companies that must compete with each other. Tax the rich progressively. Close loopholes and end offshoring profits. Far as I'm concerned, anyone who earns a billion dollars in a year can afford to give most of it up in taxes.

We might be able to create non-profits around community needs; it's a matter of designing such institutions and trying them out. It's probably a great idea, but I would never mistake that idea for a replacement for capitalism.

I'll vote for controls to limit or eliminate capitalism's excesses and to redistribute wealth, but I won't vote to eliminate capitalism itself or replace it with some vague, untried theory. Neither should anyone else.

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Please address Human Fear with the model
Posted by: halg on Sep 20, 2007 11:06 PM   
Current rating: 5    [1 = poor; 5 = excellent]
I am in favor of everything the author is speaking of. But I see one issue that still needs to be addressed in this, and that is the human nature of "fight or flight," which ultimately leads to war, physical and mental health problems, and other forms of strife.

Human fear causes most of the problems in the world. Why are some people extremely greedy? Because they are extremely fearful. They fear that if they do not hoard money now, they might suffer when blight comes. They fear that they may become impotent in power in their old age. They fear, perhaps, that their children may have to "go without" if they do not have a reserve of wealth that can be traded for whatever they need. Their answer to fear is to hoard money.

The same can be said of tyrants and other bullies. They consolidate their power so they do not have to worry that power will be used against they, themselves. They create structures of fear to ensure that others will cave in to their plans for ever more power. Bullies are the most frightened people in the world. Their answer is to "hoard" power, that is, "might makes right," flex their muscle, so they can scare off would-be opponents, and maybe be prepared to engage in battle if needed.

People and institutions who have amassed wealth and/or power believe, probably correctly, that they do not need to fear competition for valuable resources. They can buy it or bully it as they require. But if their community vigilantly guaranteed (to the extent humanly and technologically possible for that community) the promise of caring for their basic human needs, they would not need these defenses. Without this promise, members of society cannot depend on anyone else to look after them or assure their safety or their ability to survive. This is understandable and it is true of every one of us, rich or poor, powerful or not. Therefore, we must be compassionate to each other and to ourselves.

In any economic system, fear can be a strong motivator. And that is why a thorough and continuous alarm and warning system needs to be an integral part of any economic plan. If we can spot fear, or fear coming, we could act now to eradicate the sources of that fear. The warnings and alarms -- which would be an ever growing collection of causes-and-effects, gathered through experience and diligent study -- would allow us to identify when fear is likely to strike. Based on experience we will know what steps to take now before that fear is realized. By stemming the fear, we can prevent much of the damage caused by people being confronted by fear -- particularly in our current system that lacks real community supports for people in need or distress. But this is more than simply providing social safety nets; this is an entirely new approach of viewing the meaning of "community." This means taking care of people so that the conditions which ultimately cause fear are eliminated or minimized. Then the natural inclination for "fight or flight" may be eliminated as well, along with the attendant horrors that fear brings to individuals and society, like mental illness and war.

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» RE: Please address Human Fear Posted by: AsteroidMiner
Regardless of economic model
Posted by: AsteroidMiner on Sep 25, 2007 2:42 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
I notice that not a single poster above thought of getting off of
earth. There is a new frontier and we HAVE to go there. It is
Space, the high and infinite frontier. We can expand almost
forever, or at least for millions of years, if we colonize our whole
galaxy. There is no moral dilemma and no environmental
dilemma in expanding into space. The Space Elevator used to be
science fiction, but now there is a serious attempt to build it.
Take a look at the space elevator at www.liftport.com. Also take
a look at the "Cosmological Forecast" at
jetpress.org/volume12/CosmologicalForecast.htm.
According to the Cosmological Forecast, for every century we
delay the onset of Galactic colonization, there will be 5 times 10
exponent 46 fewer human lifetimes between now and the time the
galaxy dies. That is 5 followed by 46 "0"s. Our population
explosion may be allowed to continue as long as it happens in
space, not on earth. The solar system as a whole can support 10
times as many people as earth alone. [If we build a Dyson
Sphere, the multiple is much larger.] Once we have filled the
solar system, we can move on to the Centauri Cluster. We should
even take enough people off of the earth to reduce the population
of earth. Note that evolution will occur. Space is a harsh place
where stupidity will be rewarded with instant death.

Check out http://lifeboat.com. Some of us are working on
surviving in space while the rest of you undergo your ecological
disaster. We can repopulate earth much later.

We have to colonize space for another reason. In only 33,000
years, Proxima Centauri, a red dwarf star, will enter our Oort
Cloud, causing a period of "Heavy Bombardment." Earth will be
struck by giant impactors like the one that killed the dinosaurs
unless we humans are out there preventing it. We are the only
possible defenders Mother Earth can hope for. We have to do it.

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