July 25, 2016
07.19.2011 - 09:44PM
By Elaine Cohen
David Korten and other distinguished economists believe they have the solution to our failed financial system. It's visionary. It's radical, it's utopian. The more important question is: who will lead the revolution?
A new report published this week entitled, "How to Liberate America from Wall Street Rule," by the New Economy Working Group and authored by David Korten, a distinguished economist, proposes a revolutionary agenda for ending "Wall Street’s disastrous hold on the economy" and creating a "community-based, publicly accountable money and banking system responsive to the needs and opportunities of the United States in the 21st century".
As the basis for proposing radical economic restructure, this report tears apart the American economy and the way it is run, pointing to the vast inequalities in distribution of wealth, the growing problems of unemployment and food insecurity, continued fossil fuel dependency and the perpetuation of a system which has evidently failed all its stakeholders, except for those with the power to control where the money goes.
Money, in fact, has become a system of power, maintains Korten, which, concentrated in the hands of an elite ruling class, serves only to enable them to wield more power. "Money should not rule our lives" asserts Korten, and goes on to describe how it does. "Money has become a substitute for caring relationships", says Korten, while describing the extreme dependence on money as our ticket to everything in life with the exception of those things of real value such as caring relationships which we can only reminisce about, nostalgically. Liza Minelli's chant "Money makes the world go around" was clearly not just an empty line in a Broadway musical song. Korten says it's real, and it's wrong. Moreover, he proposes a way to change it.
The Global Financial Crisis and the U.S. Government and corporations' response to it could not have been a greater gift to the arguments Korten has been presenting for some time in his impressive bibliography and frequent writings. The GFC made it clear to all that inflating numbers on a computer in grossly misrepresentative financial dealings was not the way to build a productive economy. Even now, the U.S. budget deficit is misleading. Korten says: "We are awash with money. It's just that most of the money is in the wrong places!"
The recipe for change in Korten's new report is made up of six parts which essentially aspire to : limit the size of financial institutions so that no individual institution can gain unreasonable power and represent a risk for the national economy; transfer ownership to communities from private shareholders so that all have an opportunity to benefit from wealth creation; mandate full transparency as a manifestation of true democracy; route funds to creating green infrastructures to protect our planet and regulate financial services more stringently so that the economy is driven by real growth (rather than phantom growth, characterized by the increase in size of numbers on paper with no substance in creation of tangible value and a productive economy). This would lead to four new core characteristics of our financial system:
It is hard not to align with David Korten's vision. The repercussions of a failed economy are felt by all and the equitable distribution of wealth has to be a worthy goal to which only an elite few may object. The more important question, therefore, is what will it take to create this revolution? The Global Financial Crisis did not result in game-changing economic or social outcomes and has largely been swept under the carpet as a minor diversion in the flow of the U.S. economy, doing little to reduce the overriding power of Wall Street. The Arab Spring, arguably, the most significant grassroots regional uprising against economic and social depression in modern history is still in progress and who knows what kind of social and economic reforms it will usher. What major catalyst will have the force to shake the entire economic structure of the most powerful economy in the world and transform it into one which is sustainable, accountable and transparent?
Not surprisingly, Korten is clear that change will not come from within. Revolution will "depend on effective broad-based citizen action from outside the establishment". David told me: "Any deep social change begins with a conversation. This is an epic moment. If we have a future as a species, we have to have this conversation. The key thing that has to be in place is a vision of what a new economic order might look like. Right now, the conversation on Wall Street is limited to things that work for Wall Street".
Perhaps, as in the Middle East, the U.S. Economic Revolution will be the Next Big Facebook Campaign - a modern-day social media French Revolution. Perhaps it will happen through more traditional channels. Whatever the route to revolution, the vision is to bring economies back to local levels, supported by global cooperation rather than global competition and improved stewardship and distribution of resources, creating what Korten and colleagues call "self-reliant bio-regional economies".
Although this transformation sounds too huge to happen overnight, in the face of deeply-rooted opposing political interest, the fact is that the world is changing rapidly and social movements are growing in ways that we may not have predicted. David Korten is hopeful that the liberation of the American economy may just be one of those movements. And if the conversation spreads far and wide, perhaps he may prove to be right.
About Elaine Cohen
Elaine Cohen is a Sustainability Consultant and Reporter at Beyond Business and blogger on sustainability reporting and author of CSR for HR: A necessary business partnership to advance responsible business practices.
This commentary is written by a valued member of the CSRwire contributing writers' community and expresses this author's views alone.
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