By David Korten
As part of the New Economy 2.0 series
Like many Americans, I grew up believing conservative values were about local control and personal responsibility for family, community, nature. It seemed curious to me the political alliance that drove a rollback of Roosevelt-era policies that created the American middle class called itself conservative and dismissed its liberal opponents as un-American. Eventually, however, I discovered the term conservative harkens back to a day when conservatives were monarchists who considered democracy a threat to social order and the seas were ruled by buccaneers and privateers.
Buccaneer is a colorful name for pirates of old who pursued personal fortune with rules of their own making and were in their time an iconic expression of “free market” capitalism. Privateers were pirates to whom a king granted legal immunity and safe harbor in return for a share of the booty. Their charge was to extract physical wealth from foreign lands and peoples by whatever means—including the execution of rulers and slaughter and enslavement of Native inhabitants.
Hernán Cortés claimed the Mexican empire of Montezuma for Spain. Hernando de Soto made his initial mark trading slaves in Central America and later allied with Francisco Pizarro to take control of the Inca empire based in Peru.
Some privateers operated powerful naval forces. In 1671, Sir Henry Morgan (yes, appreciative British kings granted favored privateers titles of nobility in recognition of their service) launched an assault on Panama City with 36 ships and nearly two thousand brigands, defeating a large Spanish force and looting the city as it burned to the ground.
Eventually, the ruling monarchs turned from swashbuckling adventurers and chartered pirates to chartered corporations as their favored instruments of colonial expansion, administration and pillage. The sale of public shares enabled a single firm to amass virtually unlimited financial capital and assured the continuity of the enterprise beyond the death of its founders. Limited liability absolved the owners of personal liability for the firm’s losses or misdeeds.
Corporations chartered by the British Crown established several of the earliest colonial settlements in what later became the United States and populated them with bonded laborers – many involuntarily transported from England – to work their properties. The importation of slaves from Africa followed.
The East India Company (chartered in 1600) was the primary instrument of Britain’s colonization of India, a country the company ruled until 1784, much as if it were a private estate. In the early 1800s, the East India Company established a thriving business exporting tea from China, paying for its purchases with illegal opium.
The Dutch East India Company (chartered in 1602) established its sovereignty over what is now Indonesia and reduced the local people to poverty by displacing them from their lands to grow spices for sale in Europe.
It is no exaggeration to characterize these forebears of contemporary publicly traded limited liability corporations as, in effect, legally sanctioned and protected crime syndicates with private armies and navies backed by a mandate from their home governments to extort tribute, expropriate land and other wealth, monopolize markets, trade slaves, deal drugs and profit from financial scams.
Wall Street hedge fund managers, day traders, currency traders and other unlicensed phantom-wealth speculators are the independent unlicensed buccaneers of our day. Wall Street banks are the commissioned privateers who ply a similar trade with state backing. The economy is their ocean. Publicly traded corporations serve as their favored vessels of plunder, financial leverage is their favored weapon and the state is their servant-guardian.
As with the buccaneers and privateers of days past, Wall Street’s major players find it more profitable to expropriate the wealth of others than to find honest jobs producing goods and services beneficial to their communities. They walk away with their fees, commissions and bonus packages and leave it to others to pick up the costs of federal bailouts, gyrating economic cycles, collapsing environmental systems, broken families, shattered communities and the export of jobs along with the manufacturing, technology and research capacities that go with them.
They seek self-enrichment by plundering wealth they had no part in creating, enjoy substantial legal immunity and acknowledge no duty or accountability other than to themselves. Whether we call it conservative or liberal, theft is theft. Only tyrannies guarantee the liberty of the few to plunder the wealth of the many.
About David Korten
David Korten (livingeconomiesforum.org) is the author of Agenda for a New Economy, The Great Turning: From Empire to Earth Community and the international best seller When Corporations Rule the World. He is board chair of YES! Magazine, co-chair of the New Economy Working Group and a founding member of Business Alliance for Local Living Economies (BALLE).
About New Economy 2.0
Visionary economist David Korten introduces a national conversation series, New Economy 2.0, on CSRwire Talkback based on his acclaimed book, Agenda for a New Economy, 2nd edition. For the next several weeks, Korten will summarize the main points and key lessons of each chapter of his book, leading from a dissection of what went wrong in the “phantom wealth Wall Street economy” to the presentation of a vision of a world of real wealth Main Street economies that support strong middle class societies, honor real market principles and work in partnership with Earth’s biosphere.
New Economy 2.0 envisions an economy in which life is the defining value and power that resides in people and communities. It contrasts with the popular New Economy 1.0 fantasy of a magical high-tech economy liberated from environmental reality and devoted to the growth of phantom wealth financial assets.
This exciting, new series is co-published by CSRwire and YES! Magazine.
The arguments presented here are developed in greater detail in Agenda for a New Economy available from the YES! Magazine Web store.
Readers: Is Wall Street redeemable? Should it – or can it – be made honest? Share your thoughts on Talkback?