Written
by David Korten and published at Radical Ecological Democracy
We’re running out of time. There’s spreading awareness of the
institutional failure that is driving humans toward self-extinction, and
related calls for a deep transformation of our economy. This is happening in
every quarter, from college campuses to the Vatican to the U.S. presidential
debates. Everywhere we hear calls for an economy that serves the well-being of people and Earth. Pope
Francis has spoken of the social and environmental failures of an economy
devoted to the idolatry
of money. Workers
and their unions are joining in with the wrenching observation that,
“There are no good jobs on a dead planet.”
There is a related rising awareness of the need for a serious update to
the economics that serves as our guide to structuring and managing the economy
and preparing young people for their roles as future leaders. With few
exceptions, economics, as it’s taught in universities, relies on the same badly
flawed theories and ethical principles that bear major responsibility for the
unfolding crisis and hamper our efforts to take corrective action.
That economics values life only for its market price; uses GDP growth as
the defining measure of economic performance; assures students that maximizing
personal financial return benefits society; recommends policies that prioritize
corporate profits over human and planetary well-being; and ignores the natural
limits of a finite planet.
Here are eight guiding principles for a reformed economic theory to
guide our path to a new economy for the 21st century:
Principle #1: Indicators. Evaluate the
economy’s performance by indicators of the well-being of people and planet; not
the growth of GDP.
Growing GDP serves well if our goal is only to increase the financial
assets of the rich so they
can claim an ever-growing share of the remaining real wealth of a
dying Earth. If our priority is to meet the essential needs for food, water,
shelter, and other basics for all the world’s people, then we must measure for
those results. Kate Raworth’s Doughnut Economics provides a
useful beginning frame. https://www.youtube.com/watch?v=Mkg2XMTWV4g
Principle #2: Beneficial Use. Use resources
only to support life’s capacity to regenerate.
We should seek to eliminate war, financial speculation, advertising
promoting consumption of harmful or unnecessary products, and industrial
agriculture that pollutes the soil, air, and water and produces food of
questionable nutritional value. We can eliminate most automobile use by
designing infrastructure to support people living within walking or bicycling
distance of where they work, shop, and play. We can eliminate most global
movement of people and goods by keeping production and consumption local, using
recycled materials, and substituting electronic communication for global
business travel.
The labor and resources thus freed up can be redirected to raising and
educating our children, caring for the elderly, restoring the health and vitality
of Earth’s regenerative systems, rebuilding the social infrastructure
of community, and rebuilding physical infrastructure in ways that reduce
dependence on fossil fuels and simultaneously strengthen
our beneficial connections with one another and nature.
Principle #3: Use Rights. Put use rights
and responsibilities in the hands of those who provide the labor on which the
well-being of the community depends, not in the hands of those who exploit life’s
labor to grow personal financial assets.
Life depends on the labor of nature and people. Too often, the current
economic system rewards those claiming ownership rather than those performing
useful labor. Instead we should follow the model set by traditional societies,
in which people earn their share in the surplus of the commons through their
labor in service of it. Much of the current economy’s dysfunction can be
overcome by eliminating the division of society between owners and workers—a
problem corrected through worker
ownership combined with an ethical frame that recognizes our
responsibilities to and for one another and Earth.
Principle #4: Money. Create society’s
money supply through transparent public processes that advance the common good;
not through secret processes that grow the unearned profits of for-profit banks
and financiers.
In a modern society, those who control the creation and allocation of
money control the lives of everyone. It defies reason to assume that society
benefits from giving this control to global for-profit banks dedicated to
maximizing profits for the already richest among us. The system of money
creation and allocation must be public, transparent, and accountable to the
people. It must reside in democratic governments and be administered by public
banks supplemented by individual community-owned, cooperative banks whose
lending supports local home and business ownership.
Principle #5: Education. Organize and
manage education to support lifetime learning in service to life-seeking
communities; not preparing for standardized tests on the way to obedient
service to profit-maximizing corporations.
Most university economics courses currently promote societal
psychopathology as a human ideal and give legitimacy to institutions that serve
only to make money, without regard for the common good. We must prepare youth
for future leadership that builds on a moral foundation that recognizes our
individual and collective responsibility for one another and Earth.
No one knows how to get where we now must go, and education cannot
provide us with answers we as a species do not have. Education can, however,
prepare us to be lifelong learners, skilled in asking the right questions and
in working together to find and share our best answers.
Principle 6: Technology. Create and
apply technology only in ways that serve and augment the processes of natural
regeneration.
Technology must be life’s servant. Deciding what technologies to apply
based solely on what will produce the greatest short-term financial return is
madness. Humans have the right and the means to assure that technology is used
only to serve life. For example, prohibit technologies that harm people and
environment, and promote technologies that restore the regenerative capacity of
Earth systems, advance global understanding, social justice, cooperation, and
learning.
Principle #7: Community. Make living
communities that strive for self-reliance while sharing technology and
resources to that end, the defining units of societal organization.
We can sustain ourselves in perpetuity only if we meet our needs through
constant cyclical flows of resources. That was the standard way of living for
most people until less than 100 years ago. We can do it again. Urban and rural
dwellers can rediscover their interdependence as cities source food, timber,
fiber, pulp, and recreational opportunities from nearby rural areas and rural
areas regenerate their soils with bio-wastes from nearby urban areas, and enjoy
the benefits of urban culture. Suburbs can convert to urban or rural habitats.
It will be necessary to break up monopolistic transnational corporations
and restructure them as worker or community cooperatives accountable to the
communities they exist to serve.
Principle #8: Population. Seek a stable
and mutually beneficial human population size and distribution to achieve
optimal balance between humans, Earth’s other species, and the generative
systems of a finite living Earth.
The health of any natural ecosystem depends on its ability to balance
the populations of its varied species. For humans, this end is served by free
access to reproductive health care options and removing barriers to women in
education and the workplace. Only starting from this point can we both maintain
a free society and manage our population size.
The basic frame of 21st century economics contrasts sharply with that of
the 20th century economics it must now displace. The new frame is far more
complex and nuanced. Yet most people can readily grasp it because it is logical,
consistent with foundational ethical principles, reflects the reality that most
people are kind, honest, find pleasure in helping others, and recognizes that
we all depend on the health of our Mother Earth.
David Korten,
independent scholar and engaged citizen, holds M.B.A. and Ph.D. degrees from
the Stanford Business School and was a professor at the Harvard Business
School. He is co-founder of YES! Magazine, president of the Living Economies Forum,
and author of When Corporations Rule the World. Follow him on davidkorten.org, Twitter @dkorten, and Facebook.
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