In this thinkpiece for The Next System Project, David Korten sets out his 'natural case for sharing'. No-one has a right to own or control, for his or her exclusive private benefit, a share of assets essential to living far beyond any conceivable personal need, if this results in depriving others of a means to life, he argues. Redistribution to achieve a semblance of economic democracy is not only just, it is an imperative of a viable human future.
As an MBA student, I learned a basic rule of effective organizational problem solving that has shaped much of my professional life. Our professors constantly admonished us to “look at the big picture.” Treat the visible problem—a defective product or an underperforming employee—as the symptom of a deeper system failure. Look upstream to find and correct the system conditions responsible for the system failure. Otherwise the problem will simply reoccur.
It is perhaps the most important lesson I learned in more than twenty-six years of formal education. We humans must apply that lesson now to the greatest challenges we have faced since our earliest ancestors walked the plains of Africa.
The current system failure is thousands of years in the making and touches on every aspect of society. There is no magic-bullet solution. Nor will marginal adjustments to the current self-destructive system suffice. We must reinvent our culture and our institutions from the bottom up.
The observations I share in this report are the product of my life experience, much of it living and working in Africa, Asia, and Latin America, as I elaborate in the brief personal history at the end of the report. What follows is my effort to distil within the outline prescribed by the Next System Project the most important lessons of this experience.
The goal is a new economic system that supports three essential and inseparable outcomes:
- Ecosystem Health and Balance: It must value life above all else and support individuals and communities in growing the generative capacity of Earth’s biosphere, while meeting human needs within the limits of that capacity.
- Shared Prosperity: It must support the sharing of resources to meet the essential needs of all people by securing their right of access to a means of living.
- Living Democracy: It must give each person an active voice in the decisions that affect his or her life, and support the just and nonviolent resolution of conflict through processes that are both inclusive and transparent.
I call the next system economy a “living” economy, because its underlying design principles come from our understanding of healthy living systems.
By contrast, the system now in place:
- Counts Ecosystem Destruction for Financial Gain as Wealth Creation: It values life only for its market value. And counts as wealth creation the depletion of Earth’s capacity to support life in order to grow the financial assets of those who already have financial assets far beyond any need. This assures both the systematic depletion of Earth’s capacity to support life and increasing control of what remains of that capacity by a tiny oligarchy.
- Drives a Growing Global Class Division between the Profligate and the Desperate: It encourages and celebrates ever more excessive and wasteful consumption by the few while reducing the many to increasing desperation and exclusion from access to the essential means of living—including clean air to breath, water to drink, fertile soils to grow food, and a place to live.
- Limits Meaningful Participation in Rule Making to the Winners in a Rigged Game: A corporate dominated, money-driven political system puts the power to make the rules in the hands of those who profit from environmental destruction and economic exclusion, thus creating a positive feedback loop reinforcing political choices that assure ultimate system collapse.
I call this system a “suicide” economy because it is systematically destroys the foundations of its own—and our—existence. Also known as capitalism, it is dedicated to what Pope Francis calls the idolatry or worship of money.
The terminally destructive outcomes of the suicide economy are not acts of nature. They are the result of human choices. We can make different choices, but to do so we must understand where we went wrong and why.
The challenge at hand goes far beyond making some adjustments to our economic policies and institutions. We must take the step to a new human civilization defined by a mature relationship to one another and Earth’s community of life.
"The current system failure is thousands of years in the making and touches on every aspect of society. There is no magic-bullet solution."
The failure of the suicide economy is inherent in its system structure. The system itself is quite complex, but the primary design flaws are simple and so easily understood that the most perplexing mystery is why we got it so wrong.
I’ll begin with two foundational system design errors responsible for the dysfunctions of the suicide economy system. Then I’ll outline the foundational frame of the living economy system.
Two System Design Errors
The first fatal error of the suicide economy system design is the choice of money rather than life as the defining cultural value. The second is the choice of global corporations rather than living communities as the institutional locus of organization and power. Everything else follows from these two deeply flawed choices.
Money as Defining Cultural Value
The first design error traces to a mythic illusion. This insight came to me during a ten-day retreat in November 1992 in Baguio, a mountain resort in The Philippines, with leaders of six major Asian nongovernmental organizations. We had all worked together over a number of years and shared a belief that the “Asian development miracle,” much touted by the World Bank and free market economists, was more illusion than reality.
Beneath the surface appearance of dynamic competitive economies in South Korea, Taiwan, Hong Kong, and Singapore, was a deeper reality of impoverishment and spreading disruption of the region’s social and ecological foundations. We noted that economic development was monetizing relationships once based on a sense of mutual caring and obligation between people and between people and the land.
One evening as we gathered after dinner to continue our discussion, an image came to mind of development as a pool of money spreading out across the Asian countryside consuming life wherever it touched. It was as if money itself had become an evil motive force, absorbing intelligent and highly defined living beings and communities to grow its own featureless bulk—money consuming life to grow money.
What exactly is money that it might act with a seemingly willful drive to consume life? Money is just a number created by humans. It is of no substance or intrinsic worth. Indeed, it has no meaning outside the human mind.
It made no sense that these numbers might possess some independent animating power. Yet the consequences of money’s growing reach were too real and evident to deny.
I puzzled on this for weeks, until I realized that the only possible source of the willful drive in this evil scenario is our own human will. The only motive force is the misdirected life energy of living people.
It took me rather longer to realize that this misdirection is the consequence of an illusion that money is wealth, and the measure of our individual and societal worth. Focused on money, rather than on the life we really want, we humans yield the power and will of our life energy—and even our right to control our own means of living—to corporate institutions that seek financial gain by any means. These institutions handsomely reward those who serve them in the higher ranks of management—at great cost to the rest of us.
"It took me rather longer to realize that this misdirection is the consequence of an illusion that money is wealth, and the measure of our individual and societal worth."
From there, the pieces quickly fell into place. What we call economic development is a process of monetizing relationships to alienate people from the bonds of caring for one another, and the living lands and waters that were previously the source of their means of living. Thus alienated, they become dependent on money to obtain essentials like food, water, shelter, energy, and other basics they once provided for themselves in cooperative, nonmonetary engagement with one another and nature. They became dependent, instead, on the global corporations that now control the jobs, and on credit, on which they now depend for their access to money.
Eventually, I realized the same process is still ongoing in the most “advanced” nations, including my own—the United States. Our dependence on money replaces our direct relationships with one another and nature. We lose sight of the distinction between money and the things of real value that money will buy.
We embrace corporations as our source of money. We forget that nature is our source of life. From here, we easily buy into the fallacies of an economics that counts the destruction of life to make money as wealth creation, and a politics that equates corporate rule with democracy.
"Once we recognize that it is our life energy at play, we can begin to identify the opportunities available to us to redirect that energy from serving money, and the suicide economy, to serving life and the living Earth economy."
Consumed by our quest for money, we fail to notice that we have relinquished control of our lives to the institutions that control our access to money. We accept our enslavement to institutions for which we are merely a means to an end, alien to our own existence and well-being.
Herein lays the crucial insight. Life is sacred. Money is just a number, an accounting chit that allows the few who control its creation and allocation to enslave the many in a money-driven world.
Contrary to the illusion, money is not in itself wealth. No matter how big the financial-asset numbers recorded on computer hard drives stored in bank vaults, those numbers will not, and cannot, save human society from the unfolding social and environmental collapse driven by our obsessive quest for money.
Once we recognize that it is our life energy at play, we can begin to identify the opportunities available to us to redirect that energy from serving money, and the suicide economy, to serving life and the living Earth economy.
Rule by Money-Driven Global Corporations
The second insight comes from an earlier conversation, also in the Philippines, with Sixto Roxas, a distinguished Filipino economist and former international bank executive. During one of our many conversations, I asked Sixto, “Why do economists so often promote policies that have such disastrous consequences for people and nature?”
He answered without hesitation,
That’s easy. They choose the firm rather than the household as their basic unit of analysis. The word economics comes from the ancient Greek word okionomia, meaning “household management,” and the classical economists viewed the economy through that lens. When the founders of contemporary economics sought to raise economics to the stature of a science by basing it on a mathematical model, they chose the firm because its transactions are monetized and therefore already quantified. Economists have since viewed the economy through the lens of the [profit seeking] firm rather than that of the [life seeking] household.
As Sixto went on to elaborate on the significance of this choice, he noted that the firm seeks to hire as few workers as possible at the lowest possible cost. The household seeks high-paying jobs with full benefits for all its members who choose to join the labor force.
With regard to the environment, he noted that contiguous households form a community of place with a common interest in, for example, their neighboring forest. For the community, the living forest is a source of beauty, food, firewood, building materials, shade and cooling, fresh water, roots to stabilize the soils of a steep hillside, filtration of dust and impurities from the air, and a source of employment from tourism and sustained yield forest management. By contrast, the international timber corporation views the same forest simply as a commodity to harvest and sell for a one-time profit on its way to the next forest. The fewer workers required, the less their pay, and the shorter the term of their employment, the greater the firm’s profit.
Whether we conclude that clear cutting the forest produces a net benefit or a net loss to society depends on whether we take the perspective of the local household or the global corporation. The choice of perspective points in turn very different public choices.
Living economies: the household's prerogatives
In traditional economies, the household was a living unit engaged in direct production and consumption of most of the essentials its members depended upon to live. It obtained most of the remainder through mutual exchange with neighbors that did not necessarily involve some token of exchange.
There were strong bonds between households based on mutual caring and obligation, and reinforced by a recognition that the life of each person and household depends on the well-being of the community and its members, both human and nonhuman. Indeed, there was little distinction between the household and the firm as they were often one and the same.
By contrast, the conflict between the interests of the household and the firm becomes starkly evident when observing the contemporary global economy. Itinerant individuals and families lack permanent ties to place. We rarely know our neighbors. Money mediates most exchanges. And impersonal global corporations organize most production and exert near total control of our access to a means of living.
Public policies that favor the firm’s interest almost universally come at the expense of individual, household, and community interests. But we acquiesce because we identify with the corporation rather than the community as the source of our means of living.
Day by day, it seems global corporations exert ever greater control over our means of living. The corporation is an institutional form that allows the few to leverage their control of the real assets on which the lives of all depend. This control in turn allows them to control the political and judicial systems. Exerting that control, they have acquired more rights than people.
We are encouraged to celebrate the transition to money-mediated relationships as our source of liberation from the often-oppressive family and community obligations of the past. We fail to notice that it reduces most of us to a condition of wage and debt slavery.
Contemporary corporations are now so big and complex with internal systems so powerful and self-reinforcing that they operate largely beyond human accountability. Even their CEOs are more their servants than their masters.
Corporate rule is spinning ever further out of control, with no internal corrective mechanism to halt the systematic social, environmental, and political devastation it leaves in its wake.
We are nearing the end of a grand social experiment which replaced economies organized by and for living communities with economies organized by and for legally protected pools of money. That experiment has been guided by the mathematical models of an economics based on the wrong measure of value and the wrong unit of organization. The results of the experiment are now in. For all but a tiny minority, it was a disastrous failure.
Fortunately, we have the meas to liberate ourselves from servitude to a rougue system of our own making.
Learning to live as a global earth community