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8 A New Economics for a New Economy

David C. Korten Berrett-Koehler Publishers ePub

The only valid purpose of an economy is to serve life. To align the human economy with this purpose, we must learn to live as nature lives, organize as nature organizes, and learn as nature learns guided by a reality-based, life-centered, intellectually sound economics that embraces the values and insights of the Sacred Life and Living Earth story.

The quest for a new economics begins with a simple question for which the answer should be obvious: Is the purpose of the economy to maximize the profits of money-seeking corporate robots or the health and well-being of living households?

One of the most important single contributions to my understanding of where mainstream economics went wrong came from Sixto Roxas, an economist and former international bank executive. We became close friends and colleagues when I lived in the Philippines in the 1980s. I once asked him, “Why do economists so often come up with the wrong answers?”

Without a moment’s hesitation, he responded, “Because they chose the firm rather than the household as the basic unit of analysis. Economists view the economy as an aggregation of profit-seeking firms rather than an aggregation of living households.”1

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David C. Korten Berrett-Koehler Publishers ePub

No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon.

Matthew 6:24

As we look deeper for the soul of capitalism, we find that, in the terms of ordinary human existence, American capitalism doesn’t appear to have one. In the economic sphere, efficiency trumps community. Maximizing returns comes before family or personal loyalty. What seems priceless in one realm may be wasted freely or even destroyed by the other.1

William Greider

By the reckoning of Western historians, the modern era began in 1500. The turmoil of endless and pointless wars in which rival noble factions fought one another to exhaustion for largely personal ends had created a readiness to welcome a restoration of rule by monarchs with the power to impose order.

Prior to 1500, empires had been based primarily on the expansion of borders through military conquest to incorporate new territory under the central military and administrative control of a city-state ruled by a king or emperor. Center and periphery were territorially contiguous, and the boundaries between them often lacked significant definition. Land and trade were the foundations of wealth, and the institutions of monarchy generally controlled and profited from the power to tax and allocate the rights to both. Independent commercial enterprises were individually far too small to challenge the power of the sovereign king.

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David C. Korten Berrett-Koehler Publishers ePub

I am done with great things and big things, great institutions and big success, and I am for those tiny invisible molecular moral forces that work from individual to individual, creeping through the crannies of the world like so many rootlets, or like the capillary oozing of water, yet which if you give them time, will rend the hardest monuments of man’s pride.

William James

In nature, change doesn’t happen from a top-down, strategic approach. There is never a boss in a living system. Change happens from within, from many local actions occurring simultaneously.1

Meg Wheatley

Albert Einstein famously observed, “No problem can be solved from the same level of consciousness that created it.” Our task is to bring forth the higher levels of human consciousness and recreate our cultures and institutions to align with our possibilities.

Throughout the twentieth century, most revolutionaries used guns to wrest control of dominator institutions from ruling elites in the name of justice. They missed the truth that violence begets violence, domination begets domination; and dominator institutions are unjust no matter the party affiliation of the rulers.

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David C. Korten Berrett-Koehler Publishers ePub

At this stage of history, one of two things is possible: Either the general population will take control of its own destiny and will concern itself with community interests guided by values of solidarity and sympathy and concern for others, or alternatively there will be no destiny to control.


Empire’s greatest tragedy is the denial and suppression of the higher-order possibilities of our human nature. The culture and institutions of the Wall Street economy cultivate and reward our capacity for individualistic greed, hubris, deceit, ruthless competition, and material excess.

They communicate the message in both subtle and unsubtle ways that this is our human nature and that it is all for the good because individualism, competition, and greed drive economic innovation and growth. Our capacities for sharing, honesty, service, compassion, cooperation, and material sufficiency are denied and discouraged, even punished.

The touts of Wall Street would have us believe “there is no alternative.” Former British prime minister Margaret Thatcher gave it a name: TINA. To accept TINA is to give up all hope of a future for our children.

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David C. Korten Berrett-Koehler Publishers ePub

Look and listen for the welfare of the whole people and have always in view not only the present but also the coming generations.

The Great Law of Peace, Constitution of the Haudenosaunee (Iroquois) Nation

The state of the world is most visible in the state of its children.

Raffi Cavoukian, singer, author, founder of Child Honoring

Few contemporary nations seem more divided politically than the United States. Beyond the partisan rancor, however, polling data point to a broad consensus on core values and suggest that if the institutions of governmental and corporate power were accountable to the public will, the United States would be pursuing very different policies both domestically and internationally. These institutions have been so at odds for so long with the core values and interests of the nation that most people have given up hope of any change. The residual frustration, however, runs high and represents a powerful latent political force.

There is near universal agreement among adult Americans (83 percent) that as a society the United States focuses on the wrong priorities.1 Specifically, polling data affirm that the substantial majority of Americans share a desire for strong families and communities, a healthy environment, and high-quality health care and education for all. They are likewise concerned about the unaccountable power of corporations and government, and they prefer to live in a world that puts people ahead of profits, spiritual values ahead of financial values, and international cooperation ahead of international domination.

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