A Bold Proposal for a New Economy

The free market guru Milton Friedman understood what so many
progressives do not: that crises create opportunities for radical
change. Naomi Klein called this the "Shock Doctrine." One
of Friedman's opportunities was the brutal 1973 coup in Chile, which
opened the door for the market-opening fundamentalism that Ronald
Reagan and Maggie Thatcher then pushed around the world in the 1980s.

Today, the global and U.S. financial meltdowns offer such an opportunity for progressives. A progressive shock doctrine.

In this crisis, the victims are the millions of workers who have
lost their jobs (600,000 in the United States in January alone) and the
millions of families who are losing their homes. The villains are the
executives whose reckless behavior got us into this crisis and continue
to pocket massive bonuses and redecorate their offices while the
economy burns.

Obama has embraced bold rhetoric, lambasting executives for their
"culture of narrow self-interest and short-term gain at the expense of
everything else." Even business professors, such as Harvard's Rakesh
Khurana and Andy Zelleke, are trashing
the prevailing corporate milieu wherein "little has been meaningfully
valued by either executives or shareholders beyond the short-term
accumulation of wealth."

Yet neither Obama nor most progressives are seizing the moment with
bold proposals to meet the growing anger across America. A notable
exception is David Korten, who has just released a 196-page Agenda for a New Economy, building on a series of articles in YES! Magazine.

Korten is nothing if not bold. His answer to the financial crisis:
close down the Wall Street casino. Replace it with a revitalized Main
Street by resetting economic priorities to support local economies and
dignified work that best serve us all. Instead of "phantom wealth" that
doesn't create anything of value, let's prioritize the real economy.

Korten also understands that we must use the economic meltdown to
solve the other giant global crisis: climate chaos. His transformative
agenda of vibrant local economies can deliver us a carbon-free economy
within a few decades.

How do we do it? According to Korten, we have to redefine how
success is measured. He has sharp ideas on how to get the market price
of goods to reflect their full costs of production, including their
adverse impact on workers, the environment, and communities.

In his real-wealth economy, government and citizen groups work to
reallocate resources from the military to health care, from cars to
public transportation, from mining to recycling, and from suburban
sprawl to compact communities.

We close down the Wall Street casino through smart regulation, a
transactions tax on the purchase and sale of financial instruments, and
a fair tax system. We create a set of rules and incentives that favor
human-scale businesses owned by local stakeholders. Korten is full of
ideas on democratizing ownership and reclaiming corporate charters from
footloose global firms. And, he is smart enough to know that these
solutions work best if they are coordinated across countries.

The book is compelling, urgent, and easy to read. It will be a great
tool to help harness the anxiety and anger gripping our nation. And it
will link together the disparate parts of our country to work for
progressive economic change, including grassroots groups like Jobs with
Justice, which is has working with my own Institute for Policy Studies
to create a new comic book on the meltdown. It will also draw in an organization Korten co-founded, the vibrant Business Alliance for Local Living Economies, which is spreading innovation among local business leaders, and YES! magazine, which has posted an excerpt from Korten's book The Speech President Obama Should Deliver.

From low-wage workers, to local entrepreneurs, from independent
thinking elected officials to the global networks that brought you the
Battle in Seattle a decade ago, there's a new questioning of the Wall
Street-based economy. All who are ready for a new approach would do
well to spend a few hours with David Korten's big ideas as they link
their work with one another.