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Saturday, February 28, 2009

Beyond Bailouts: REAL Economic Solutions - David Korten

David Korten has just come out with a book ("Beyond Bailouts: Agenda for a New Economy") describing the different approach he says we need to take to address our current economic crisis.

WCG reader and columnist Patricia Dines recommends David's book -

Dear Vesta,
I'm so delighted that David Korten has just come out with a book ("Beyond Bailouts: Agenda for a New Economy") describing the different approach he says we need to take to address our current economic crisis. I've long appreciated the quality of Korten's thinking/ideas so I look forward to reading it. While I'm a big fan of Obama, I think he's accepted standard economic thinking too much, at a time when we need to seriously change that direction. Hopefully the Prez will also keep his word to listen to us, AND we'll speak up for positive proposals. That's why I'm so thrilled that Korten has written out his perspective AND some ideas we might propose.

I've included his essay below. But this is the short version that Korten articulates (which I see also) - that we can't prop the current economic system up, no matter how many gazillions we take from future generations - that the economic breakdown is the predictable result of real problems with our economic approach - and thus the only way to come out of this in decent shape is to make key shifts in our economic system.

But the good news could be that we use this opportunity to finally align our system with true wealth, making it easier for people to earn a fair living while taking care of the planet and building community - things that are too often challenging to do under the current system.

I hope you find this of interest.

Patricia Dines

Dear Reader, [of Yes! magazine]

You may be catching some of the media excitement around Dave Korten's just-published book, Agenda for a New Economy. With Wall Street crashing and the government flailing, his message to replace Wall Street with a financial system that works for Main Street is catching fire.

Now here's a secret about this book. Dave wrote it in a mere three weeks! The genesis was his article for YES!, Beyond Bailouts: Agenda for a New Economy. When Dave's publisher read it, he asked Dave to turn it into a book, and they targeted the launch for January 23, when Dave was set to deliver a keynote address at Trinity Church in the heart of Wall Street. So Dave literally wrote night and day, the words pouring out from a lifetime of thought. Dave said "I feel like I have lived my whole life to write this book."

I was with Dave in New York and accompanied him to his interview with Amy Goodman for Democracy Now! After Amy finished her interview with Dave, she discovered I had been friends with Barack Obama's mother so she called the camera crews back to interview me about our friendship. I think you'll enjoy both these interviews.

Fran Korten
YES! Magazine

Yes! Magazine - Path to a New Economy

Don't Fix Wall Street, Replace It
by David Korten

Why not an economy of real wealth?

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 wrote this article for the Spring 2009 issue of YES! Magazine, Food for Everyone . David's latest book is Agenda for a New Economy: From Phantom Wealth to Real Wealth (published by Berrett-Koehler, Feb 2009). Read an extract . David is also the author
of the international bestseller When Corporations Rule the World and The Great Turning: From Empire to Earth Community . He is co-founder and board chair of YES! Magazine , and a board member of the Business Alliance for Local Living Economies .

See more details at:

Winter 2009: Sustainable Happiness
Beyond the Bailout: Agenda for a New Economy
by David Korten

(This article inspired David Korten's new book)

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