Feb 13, 2009
The current economic debate centers on how best to revive our existing
economic system through some combination of a Wall Street bailout and a
job-creating economic stimulus package.
That amounts to trying to revive an economic system that has failed in
every dimension: financial, social, and environmental. Rather than prop
up a failed system, we should use the current financial crisis as the
opportunity to create a system that works. Trying to solve the crisis
with the same tools that caused it is the definition of insanity.
As individuals, we humans appear to be an intelligent species.
Collectively, however, our behavior ranges from supremely wise to
suicidal. Our current collective economic insanity is the product of an
illusion-a belief, cultivated by the prevailing economic orthodoxy,
that money is wealth and that making money is the equivalent of
creating wealth.
Money is merely an
accounting chit with no intrinsic value-it is useless until we exchange
it for something of real value. Wall Street's specialty is creating
money for rich people without the exertion of producing anything of
corresponding real value. They increase their claims against real
wealth without increasing the supply of goods, making it harder for the
rest of us to meet our needs.
Real wealth
is, first of all, the tangible things that support life-food, shelter,
clothing. Of course, the most valuable forms of real wealth are those
that are beyond price: love; a healthy, happy child; a job that
provides a sense of self-worth and contribution; membership in a
strong, caring community; a healthy vibrant natural environment; peace.
Our Wall-Street-driven economic system makes fantastic amounts of money
and actively destroys all these many forms of real wealth.
We
have been in thrall to a pervasive cultural story, continuously
reinforced by academics, government officials, and corporate media,
which led us to believe our economy was functioning splendidly even
when it was quite literally killing us. You have heard this story many
times:
"Economic growth, as measured by Gross
Domestic Product, creates the wealth needed to provide material
abundance for all, increase human happiness, end poverty, and heal the
environment. The faster we consume, the faster the economy grows and
the wealthier we become as the rising tide lifts all boats."
The logical conclusion from this story is that the faster we convert useful resources to toxic garbage,
the richer we are. The only true beneficiaries of this obviously stupid
idea are a few very rich people who reap financial gains from every
economic transaction-whether the transaction cures a disease or
clearcuts a rainforest. It is a system that deifies money and dilutes
wealth.
In contrast, the Main Street economy
is comprised of local businesses and working people who produce real
goods and services to meet the real wealth needs of their communities.
It has been battered and tattered by the predatory intrusions of Wall
Street corporations, but it is the logical foundation on which to build
a new, real wealth economy of green jobs and green manufacturing, responsible community-oriented businesses, and sound environmental practices.
Let Wall Street corporations and their phantom wealth machine slip into
the abyss of their own making. Devote our public resources to building
and strengthening Main Street businesses and financial institutions
devoted to creating real wealth in service to their local communities.
This article was written for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas and practical actions. Licensed under a Creative Commons Attribution-Share Alike 3.0 License.
David Korten
Dr. David Korten is the author of "Agenda for a New Economy," "Change the Story, Change the Future: A Living Economy for a Living Earth," and the international bestseller "When Corporations Rule the World." He is board chair of YES! Magazine, co-chair of the New Economy Working Group, a founding board member of the Business Alliance for Local Living Economies,--now called Common Future--president of the Living Economies Forum, and a member of the Club of Rome. He holds MBA and Ph.D. degrees from the Stanford University Graduate School of Business and served on the faculty of the Harvard Business School.
The current economic debate centers on how best to revive our existing
economic system through some combination of a Wall Street bailout and a
job-creating economic stimulus package.
That amounts to trying to revive an economic system that has failed in
every dimension: financial, social, and environmental. Rather than prop
up a failed system, we should use the current financial crisis as the
opportunity to create a system that works. Trying to solve the crisis
with the same tools that caused it is the definition of insanity.
As individuals, we humans appear to be an intelligent species.
Collectively, however, our behavior ranges from supremely wise to
suicidal. Our current collective economic insanity is the product of an
illusion-a belief, cultivated by the prevailing economic orthodoxy,
that money is wealth and that making money is the equivalent of
creating wealth.
Money is merely an
accounting chit with no intrinsic value-it is useless until we exchange
it for something of real value. Wall Street's specialty is creating
money for rich people without the exertion of producing anything of
corresponding real value. They increase their claims against real
wealth without increasing the supply of goods, making it harder for the
rest of us to meet our needs.
Real wealth
is, first of all, the tangible things that support life-food, shelter,
clothing. Of course, the most valuable forms of real wealth are those
that are beyond price: love; a healthy, happy child; a job that
provides a sense of self-worth and contribution; membership in a
strong, caring community; a healthy vibrant natural environment; peace.
Our Wall-Street-driven economic system makes fantastic amounts of money
and actively destroys all these many forms of real wealth.
We
have been in thrall to a pervasive cultural story, continuously
reinforced by academics, government officials, and corporate media,
which led us to believe our economy was functioning splendidly even
when it was quite literally killing us. You have heard this story many
times:
"Economic growth, as measured by Gross
Domestic Product, creates the wealth needed to provide material
abundance for all, increase human happiness, end poverty, and heal the
environment. The faster we consume, the faster the economy grows and
the wealthier we become as the rising tide lifts all boats."
The logical conclusion from this story is that the faster we convert useful resources to toxic garbage,
the richer we are. The only true beneficiaries of this obviously stupid
idea are a few very rich people who reap financial gains from every
economic transaction-whether the transaction cures a disease or
clearcuts a rainforest. It is a system that deifies money and dilutes
wealth.
In contrast, the Main Street economy
is comprised of local businesses and working people who produce real
goods and services to meet the real wealth needs of their communities.
It has been battered and tattered by the predatory intrusions of Wall
Street corporations, but it is the logical foundation on which to build
a new, real wealth economy of green jobs and green manufacturing, responsible community-oriented businesses, and sound environmental practices.
Let Wall Street corporations and their phantom wealth machine slip into
the abyss of their own making. Devote our public resources to building
and strengthening Main Street businesses and financial institutions
devoted to creating real wealth in service to their local communities.
David Korten
Dr. David Korten is the author of "Agenda for a New Economy," "Change the Story, Change the Future: A Living Economy for a Living Earth," and the international bestseller "When Corporations Rule the World." He is board chair of YES! Magazine, co-chair of the New Economy Working Group, a founding board member of the Business Alliance for Local Living Economies,--now called Common Future--president of the Living Economies Forum, and a member of the Club of Rome. He holds MBA and Ph.D. degrees from the Stanford University Graduate School of Business and served on the faculty of the Harvard Business School.
The current economic debate centers on how best to revive our existing
economic system through some combination of a Wall Street bailout and a
job-creating economic stimulus package.
That amounts to trying to revive an economic system that has failed in
every dimension: financial, social, and environmental. Rather than prop
up a failed system, we should use the current financial crisis as the
opportunity to create a system that works. Trying to solve the crisis
with the same tools that caused it is the definition of insanity.
As individuals, we humans appear to be an intelligent species.
Collectively, however, our behavior ranges from supremely wise to
suicidal. Our current collective economic insanity is the product of an
illusion-a belief, cultivated by the prevailing economic orthodoxy,
that money is wealth and that making money is the equivalent of
creating wealth.
Money is merely an
accounting chit with no intrinsic value-it is useless until we exchange
it for something of real value. Wall Street's specialty is creating
money for rich people without the exertion of producing anything of
corresponding real value. They increase their claims against real
wealth without increasing the supply of goods, making it harder for the
rest of us to meet our needs.
Real wealth
is, first of all, the tangible things that support life-food, shelter,
clothing. Of course, the most valuable forms of real wealth are those
that are beyond price: love; a healthy, happy child; a job that
provides a sense of self-worth and contribution; membership in a
strong, caring community; a healthy vibrant natural environment; peace.
Our Wall-Street-driven economic system makes fantastic amounts of money
and actively destroys all these many forms of real wealth.
We
have been in thrall to a pervasive cultural story, continuously
reinforced by academics, government officials, and corporate media,
which led us to believe our economy was functioning splendidly even
when it was quite literally killing us. You have heard this story many
times:
"Economic growth, as measured by Gross
Domestic Product, creates the wealth needed to provide material
abundance for all, increase human happiness, end poverty, and heal the
environment. The faster we consume, the faster the economy grows and
the wealthier we become as the rising tide lifts all boats."
The logical conclusion from this story is that the faster we convert useful resources to toxic garbage,
the richer we are. The only true beneficiaries of this obviously stupid
idea are a few very rich people who reap financial gains from every
economic transaction-whether the transaction cures a disease or
clearcuts a rainforest. It is a system that deifies money and dilutes
wealth.
In contrast, the Main Street economy
is comprised of local businesses and working people who produce real
goods and services to meet the real wealth needs of their communities.
It has been battered and tattered by the predatory intrusions of Wall
Street corporations, but it is the logical foundation on which to build
a new, real wealth economy of green jobs and green manufacturing, responsible community-oriented businesses, and sound environmental practices.
Let Wall Street corporations and their phantom wealth machine slip into
the abyss of their own making. Devote our public resources to building
and strengthening Main Street businesses and financial institutions
devoted to creating real wealth in service to their local communities.
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