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Replacing Our Failed Economy Is Long Overdue and We Have the Power to Change It

An excerpt from David Korten's Agenda for a New Economy, on what it's going to take to repair our society.

The following is an excerpt from the introduction of the 2nd edition of David Korten's Agenda for a New Economy (Berrett-Koehler, 2010).

I wrote the first edition of Agenda for a New Economy in late 2008 when Wall Street was in the throes of collapse. The phantom wealth machine had been exposed and its devastating effects on the real economy were apparent everywhere.

The book was published just as a new president and new Congress were taking power, and I had hopes they would begin to rein in the Wall Street financial institutions that were causing such pain and set us on the path to a much more sensible economy. I included a chapter with the speech I wanted our youthful, idealistic, articulate new president to give -- one that would recognize the transformation needed in our money system, our economic institutions and the rules that determine their behavior.

I knew the speech was a fantasy. Mostly it was designed to help readers see as clearly as possible the ideas that must redirect our policy making. But in my heart I guess I still hoped that perhaps the new president would in fact put forward some of the ideas in a speech of his own and we would begin the journey to an economy that treats people fairly and is in line with the limits of the planet.

In the 18 months since the first edition came out, we have seen with increasing clarity the extent of Wall Street's hold on Washington. I have abandoned my brief flirtation with the fantasy that Obama might be the exception and that contrary to what I have believed and taught for more than 20 years change might come from the top.

If change comes, the leadership will come from below through citizen action that originates from outside of the institutions that are failing us on so many fronts. Change from below can succeed only when a large number of people have a shared understanding of the roots of the problem and share a vision of the path to its resolution.

As a society, we cannot create a future that we cannot see in our collective mind. One of the most important tasks of the moment is to define a vision of the life-serving New Economy it is ours to create and to build popular commitment to its realization. The first Agenda for a New Economy was a start.

I have since had conversations with a great many intelligent and thoughtful colleagues who have further deepened my own understanding of the issues and options. I've written this second edition to sharpen the framing of the problem and take the vision to the next level as one input to an essential national conversation.

A National Conversation

The Wall Street meltdown in 2008 and the failure of the subsequent bailout effort has in some way touched the life of nearly everyone and is currently at the center of public awareness and concern. People want to understand what went wrong and how it can be set right. It is a propitious opportunity to engage a long-overdue national conversation around some basic yet rarely asked questions.

Most public discussion of the financial crisis has focused on finger-pointing. Who engaged in criminal activity? Who was responsible for falsifying securities ratings? Who was responsible for rolling back essential regulations? Which regulators were asleep at the switch and why? Are Wall Street Bankers over paid?

A few observers -- including Dean Baker ( Plunder and Blunder), Kevin Phillips ( Bad Money), Gary Weiss ( Born to Steal: When the Mafia Hit Wall Street and Wall Street Versus America), Charles Morris ( The Trillion Dollar Meltdown), and William Black ( The Best Way to Rob a Bank Is to Own One) -- provided extensive documentation of the corruption of Wall Street's most powerful institutions even before the September 2008 financial crash that brought down the global economy. Since the crash there has been an outpouring of such books and articles, including Martin Lowy, Debt Spiral: How Credit Failed Capitalism, RP Bottle, T he Trouble with Markets: Saving Capitalism from Itself, Janine R. Wedel, Shadow Elite, and Barry Lynn, Cornered: The New Monopoly Capitalism and the Economics of Destruction. The corruption of Wall Street is beyond dispute and it is now difficult to find anyone not on the Wall Street payroll who publicly denies the need for stronger rules and closer oversight.

Most calls for strengthening regulations and oversight are aimed at keeping reckless bankers and financiers from repeating the crash. While that seems quite a good idea, more fundamental questions are rarely raised.

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