Creating a Post-Corporate World

Creating a Post-Corporate World

by David C. Korten
 

TWENTIETH ANNUAL E. F. SCHUMACHER LECTURES
OCTOBER 2000, SALISBURY, CT
EDITED BY HILDEGARDE HANNUM

 

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Introduction by David Ehrenfeld
‚ÄčECOLOGIST; AUTHOR; MEMBER, BOARD OF DIRECTORS, E. F. SCHUMACHER SOCIETY

David Korten has done so much and has had such a varied career that introducing him is a little bit like introducing three or four people, certainly two. Trained in economics, organization theory, and business strategy, with his MBA and his Ph.D. from the Stanford Graduate School of Business, he helped set up business schools in low-income countries, starting with Ethiopia when he was still a doctoral candidate.

He served for five and a half years as a visiting associate professor at Harvard Graduate School of Business, teaching middle-management MBA doctoral programs. In the late 1970s he moved to Southeast Asia, where he lived for nearly fifteen years, serving as a Ford Foundation project specialist and then later as Asia regional adviser on development management to the U.S. Agency for International Development. I notice a certain interesting parallel here with the career of E. F. Schumacher, also an economist, who was profoundly moved by his experiences in Southeast Asia and changed by the experience. I suspect, judging by what comes afterwards in David Korten’s life, that he was also changed.

He came to realize that the crises of deepening poverty, inequality, and environmental devastation, all of which go together, and of social disintegration that he was observing in Asia were being experienced everywhere, including here in the United States. In 1990 he founded an organization called People-Centered Development Forum, which is an international alliance of people and organizations dedicated to creating just and sustainable human societies through voluntary citizen action. Then he wrote a book, published in 1995, that’s changed the lives of many people and has been influential around the world: When Corporations Rule the World. His new book is The Post-Corporate World: Life after Capitalism. These titles reveal an interesting shift because “when corporations rule the world” sounds to me like a permanent, glacial-like post-historic state, but he obviously doesn’t think of it that way; evidently there’s life after corporations—life in the sense of Deuteronomy’s injunction, “Choose life that you may live.”

How do we get rid of corporate rule? I must tell one anecdote, suggested to me by Andrew Kimbrell’s story of the pig that he told earlier today. This was a genetically engineered pig, developed at the U.S. Department of Agriculture facility in Beltsville, Maryland. When I first saw a picture of that gigantic pig, it had a profound effect on me. There it was, propped up against a wall, barely able to stand. Beside it was a man in a long raincoat looking like somebody from the1940s. I assumed he was Dr. Vern Purcell, who “created” this giant pig. The pig looked grim, and the picture was grim, If I remember correctly, there was an arch over the gate. When I put the picture up on the bulletin board outside my office, I couldn’t help writing on it, over the gate, the words, “Arbeit macht frei” (“work makes you free”), which was written over the entrance to the concentration camp at Auschwitz. But that sad tortured pig actually gives us some hope, for the fact is—as the animal shows—this techno-economic system we’ve created really doesn’t work very well. It’s hardly working at all. And the more it spreads and the more it coalesces, the less it works.

So there is going to be life after corporations, and that means we have work to do. I’m going to read to you—and I don’t think I’m stealing David Korten’s thunder—from the end of When Corporations Rule the World. This is the last paragraph of the book, and here’s our job:

“We must approach this difficult period with a mutual caring and tolerance for diversity that are the essential foundations of the healthy societies we hope to create. Even as we seek to remain centered in our core values and to build alliances with those who share such values, we must be constantly aware that we are engaged in an act of creation, for which there is no blueprint. We are all learners in an unfolding process, requiring that we look with a critical eye and an open mind for the kernel of truth in each idea and the spark of goodness in each person. We are embarking on what may be the most profound change of course in human history, and it requires that we bring to bear the full creative potential of our species.”

 


 

Fritz Shumacher was truly a man who was ahead of his time. Long before the corporate globalists made “there is no alternative” their mantra, he was telling us that there are alternatives to the large, the tyrannical, and the materialistic. Long before most of us were aware that corporations and the whole process of economic globalization were taking control of our lives and moving us in a deeply destructive direction, he taught us about “small is beautiful” and Buddhist economics, which honors the small, the local, the democratic, the ethical, and the right livelihood. It is a message whose time has come, as we see in the extraordinary development occurring at this moment in history in America and beyond: a remarkable awakening of consciousness that is creating a foundation for political and economic change leading toward the kind of world that Fritz Schumacher envisioned.

 

The Struggle for Life in a Corporate World

This awakening first caught the public's attention on November 30, 1999, when some 50,000 union members, people of faith, environmentalists, youth, indigenous peoples, gays and lesbians, farmers, health workers, and peace, civil-rights, and human-rights activists took to the streets of Seattle to oppose corporate globalization. Deeply committed to nonviolent resistance, they courageously stood their ground in the face of the rubber bullets, tear gas, and pepper spray used by violent police battalions. Ultimately, they played a major role in bringing the World Trade Organization’s negotiations to a standstill. That whole week of teach-ins, marches, debates, and seminars involved between 60,000 and 70,000 people.

What happened on that day was called “the Protest of the Century” or—because Seattle was the epicenter—“the Battle of Seattle” or simply “Seattle ’99.” Seattle, however, was only the tip of a very large iceberg. Simultaneous protests around the world brought hundreds of thousands of people to the streets on that historic day. Both before and since, millions have participated in related protests in India, France, Thailand, England, Bolivia, Switzerland, Brazil, and other countries. These many protests have focused public attention on a deepening struggle grounded in two sharply divergent world-views and sets of values.

On one side are the forces of corporate globalization being advanced by an alliance of the world's largest corporations and most powerful governments. This alliance is backed by the power of money, and its defining goal is to integrate the world’s national economies into a single borderless global economy in which the world's megacorporations are free to move goods and money without governmental interference in a quest for ever greater shareholder return. In the name of increased efficiency the alliance seeks to privatize public services and assets and to strengthen safeguards that benefit investors and private property. In the eyes of its proponents corporate globalization is the result of inevitable and irreversible historical forces driving a powerful engine of technological innovation and economic growth that is strengthening human freedom and spreading democracy throughout the world while at the same time creating the wealth that will end poverty and save the environment.

On the other side of the struggle are the forces of a newly emerging global movement some are calling the Global Movement for a Living Democracy, advanced by a planetary citizen alliance of civil society organizations. Members of this alliance believe that corporate globalization is neither inevitable nor beneficial but rather the product of intentional decisions and policies promoted by the World Trade Organization, the World Bank, the International Monetary Fund, global corporations, and politicians on corporate payrolls. In their eyes corporate globalization is replacing democracy with corporate and financial tyranny, destroying the living wealth of the planet and society to make money for the already wealthy as it erodes the relationships of trust and caring that are the essential foundation of a civilized society.

The outcome of this struggle may well determine whether our species has a future, for in the mindless pursuit of money we are well along on the way to destroying both the fabric of civilization and the life-support system of the planet. This afternoon I want to place our present struggle in its larger context through the telling of an epic story inspired by the wisdom and teachings of theologian Thomas Berry. It is a story that blends contemporary scientific knowledge with ancient religious truths to offer important insights into life’s deep secrets and creative power and into the unfolding struggle between money and life for the soul of humanity.

The story begins a very long time ago—as long as 15 billion years ago—when a new universe flared into being with a great flash, dispersing tiny energy particles, the stuff of creation, across the vastness of space. With the passing of time these particles organized themselves into atoms that swirled into great clouds which coalesced into galaxies of countless stars that grew, died, and were reborn as new stars, star systems, and planets. The cataclysmic energies unleashed by the births and deaths of billions of suns converted simple atoms into more complex atoms and melded atoms into even more complex molecules—each step opening new possibilities for the growth and evolution of the whole.

Each stage transcended the preceding stage in order, definition, and capacity as the drama of creation unfolded. It was as if a great intelligence had embarked on a grand quest to know itself through the discovery and the realization of the possibilities of its being.

 

Life’s Journey of Discovery

More than eleven billion years after the quest began, there was an extraordinary breakthrough on a planet later to be known as Earth. Here the cosmos gave birth to the first living beings, as far as we know. Microscopic in size, they were simple single-celled bacteria. Seemingly inconsequential, they embodied an enormous creative potential and with time created the building blocks of living knowledge that made possible the incredible accomplishments that were to follow. They discovered the arts of fermentation, photosynthesis, and respiration that are fundamental to all life. They learned to exchange genetic material through their cell walls in order to share their discoveries with one another. It was a grand cooperative enterprise that created the planet's first global communication system—billions of years before the Internet. Through their collective efforts they transformed and stabilized the chemical composition of the entire planet's atmosphere.

As the fruits of learning multiplied, individual cells evolved to become more complex and diverse. In due course individual cells discovered the advantages of joining with one another in clusters to create complex multi-celled organisms, ultimately converting the matter of the planet into a splendid web of plant and animal life with capacities far beyond those of any individual cell. Those among the new creatures that found a niche in which they could at once sustain themselves and contribute to the life of the whole were able to survive. Those that proved unable to find or create their niche of service expired. Continuously experimenting, interrelating, creating, and building, the evolving web of life unfolded into a living tapestry of astonishing variety, beauty, awareness, and capacity for intelligent choice.

Then, a mere 2.6 million years ago, quite near the end of our 15 billion year story, there came the most extraordinary achievement of all, the creation of a being with capacities far beyond those of any creature that had come before it—a creature able to reflect on its own consciousness, to experience with awe and wonder the beauty and mystery of creation, to articulate, communicate, and share learning, to reshape the material world to its own ends, and to anticipate and intentionally choose its own future. It was the living spirit's most daring experiment—a stunning cooperative achievement.

Each of these human creatures was comprised of from 30 to 70 trillion individual, living, self-regulating, self-reproducing cells. More than half the dry weight of an individual human consisted of the individual micro-organisms required to metabolize its food and create the vitamins essential to its survival. All together it took more than 100 trillion individual living entities joined in an exquisitely balanced union to create each of these extraordinary creatures.

The new beings’ freedom to choose their own destiny gave them an extraordinary creative potential to contribute to the journey of the whole. Yet this same freedom carried a risk. Unless they used it wisely, humans could create the conditions of their own destruction.

Humans, it turned out, were remarkably fast learners in the cosmic scheme of things. During their first two and a half million years they developed the capacity for speech, mastered the use of fire, produced and used sophisticated tools, engaged in artistic expression, learned to cultivate their food and to communicate in written form, established highly organized societies, and created systems of knowledge in botany, zoology, astronomy, and cosmology. As their scientific and organizational capabilities expanded, ever more impressive technical advances came at a rapidly accelerating rate—at each step increasing their ability to manipulate and control aspects of their material world.

 

Cultural Crisis

Somewhere along the way something went terribly wrong, for these humans came to use their powerful technologies and institutions in ways that were increasingly destructive of life. Indeed, in a mere one hundred years—between the years 1900 and 2000—they destroyed much of the living natural capital it had taken billions of years of evolution to create. Some attribute this tragedy to a genetic flaw that doomed humans to the blind pursuit of greed and violence. Yet the earliest human civilizations were peaceful and cooperative, and even during humans’ most destructive periods the vast majority of them were generous and caring. More compelling is the argument that the roots of the crisis were cultural, not genetic—the consequence of a materialistic ideology, born of what humans called their Scientific Revolution.

The industrial/technological era initiated by the Scientific Revolution was in many respects the proudest period of human achievement. It freed a substantial portion of humanity from the deprivation, superstition, fear, and early death of medieval peasant life and from often oppressive religious dogma. It produced humanity’s most impressive technological achievements—including the means to reduce physical toil, eliminate geographical barriers between people, feed a rapidly growing population, and greatly improve health and prolong life. Creating institutions of global governance and cooperation, it established democracy and human rights as universal ideals.

Yet the era also established a belief system that held matter to be the only reality and taught that the universe is best viewed as a giant clockwork set in motion at the beginning of creation and left to run down as the tension in its spring expires. It further taught that life is only an accidental outcome of material complexity and that consciousness is merely an illusion.

Thomas Hobbes, a noted philosopher of the Scientific Revolution, took these ideas a step further to argue that since life is only an accident, it has no inherent meaning and human behavior is determined solely by appetites and aversions; good is merely that which gives one pleasure, evil that which brings pain. The rational person thus seeks a life of material indulgence unburdened by concern for others.

These beliefs became the foundation of a cultural system known as modernism and an economic system known as capitalism. Both nurtured the pursuit of a narrow self-interest and absolved the individual of responsibility for the lot of society and nature.

Although there was heated conflict at the time between scientists and theologians, the two camps eventually arrived at a mutual accommodation in many of their core beliefs. Western theologians, mostly elder males, had long before created their God in their own image—an elder male with a white beard who ruled a kingdom called Heaven. By the account of the Western theologians, their God created the cosmos, the earth, and every living being in six days—all for the benefit of humans, who were his final and his greatest achievement. On the seventh day, his work done, he rested.

The main issue on which scientists and theologians differed substantially centered on the question of whether God returned after the seventh day to tend to his creation. Most scientists believed that once God’s great machine was completed and set in motion, he left forever. Most of the theologians believed he returned to reward the righteous and punish the sinful, a belief that turned out, oddly, to legitimate the greed and materialism of the monied classes.

Given that God personally determined the fate of each person on the basis of worthiness, those with wealth and power were by definition righteous in his eyes, whereas the poor and powerless deserved their fate. The righteousness of both materialism and political oppression was thus affirmed. Furthermore, since humans were the end product of creation, not instruments of its continuing unfolding, whatever the deficiencies of the world as felt by any individual, it was to be accepted as God's will.

Some believed that God would eventually return to establish peace and justice for all. Others looked to the afterlife for perfection. Either way, responsibility for the fate of humanity was believed to lie not within humanity itself but rather with a God who resided apart in a far place.

 

Capitalism and the Money Game

Nowhere was human rejection of responsibility for the lot of society and nature greater than in the economic system humans called capitalism. Capitalists had their own god, called the market. They believed the market had a wondrous invisible hand that would miraculously make their every act—no matter how avaricious and ruthless—benefit society. One of capitalism's defining features was a consumer culture that it cultivated by saturating the media with a constantly repeated mantra—that consumption of one or another advertised product would bring meaning and love to empty and lonely lives.

When consumption failed to produce meaning, more consumption was prescribed as the solution. Increasingly, the creative energies of the species turned to building institutions dedicated to endlessly increasing consumption through a process called economic growth. Growth became such an obsession that few seemed to notice it was destroying the life support system of the planet, the social fabric of the society, and the lives of billions of people.

One of the humans’ more useful inventions was called money—a mysterious kind of sacred numbers game that banks loaned into existence. By social convention humans accepted money in exchange for things of real value like their labor, food, land, and shelter. Money facilitated exchange, and it was a key to the substantial economic prosperity enjoyed by more than a billion humans.

Eventually, however, when money became the ticket that allowed people to accumulate “stuff,” those who already had so much stuff they didn't know what to do with it turned their attention to simply accumulating money, which banks happily stored for them first in vaults and then increasingly in computers. As this accumulation served no evident purpose, its practitioners turned it into a competitive game in which the winner was the one with the biggest number. It seemed that the males of the species were particularly attracted to this game of “My number is bigger than your number.” Many made their fortunes gambling on the prices of currencies, bonds, and corporate shares in a great electronic casino called a global financial market.

The top players were called billionaires. A well-known magazine called Forbes regularly published their current scores and rankings. For those who had the means to play, this game became life's purpose. Those less affluent but with a bit of extra cash to spare were encouraged to hand it over to professional gamblers called money managers, who would place bets on their behalf in the great casino. In the course of their play the money managers moved trillions of dollars around the world at the speed of light, wreaking havoc not only on the currencies and economies of hapless countries whose policies displeased them but also on the share prices of corporations that produced lower profits than the gamblers expected. In the wake of their moves whole governments fell and hundreds of thousands lost their jobs while the pundits of the corporate-controlled media cheered the results as demonstrating capitalism’s powers of “creative destruction.”

The corporations whose shares were traded in the great casino were a favored institution of capitalists. From a social perspective the corporation was a frightfully perverse legal entity designed to allow the accumulation of massive financial power while minimizing accountability for the consequences of its use.

Some corporations were served by the labor of hundreds of thousands of people and received millions of dollars in subsidies from government. Yet the law, and much of public opinion, stipulated that only shareholders were entitled to a voice in management and a share in the profits. Employees were expected to leave their personal values at the door when they reported for work. On the job there was only one value—shareholder return. Treated as expendable commodities, workers could be fired without notice or recourse. Whole communities were simply abandoned when a corporation found it more profitable to move its operations elsewhere.

In response to the money managers’ demands for ever greater profits, corporations rewarded politicians with large financial gifts in return for public subsidies and laws granting them special privileges. Then, tiring of the inconvenience of buying the favor of politicians one country at a time, the major players created a new institution called the World Trade Organization or WTO. Here unelected trade representatives loyal to corporate interests established international rules that obliged all countries to extend special rights and privileges to any global corporation. If the WTO decided that a local or national law conflicted with its rules, the offending country was obliged to change that law—even if the change was contrary to the democratically determined interests and preferences of the citizens affected by it.

Invariably, the rules of the WTO gave corporations ever greater freedom to roam the world, converting the living wealth of society and planet into money. They turned the natural capital of the earth into money by clear-cutting forests, strip-mining minerals, depleting fisheries, producing toxic chemicals, and dumping hazardous wastes. They turned human capital into money by employing workers under substandard working conditions that left them physically handicapped and turned social capital into money by paying substandard wages that destroyed workers emotionally and led to family and community breakdown and violence. They also turned the living trust of public institutions into money by bribing politicians with campaign contributions in order to convert the taxes of working people into inflated corporate profits by means of public subsidies, bailouts, and tax exemptions.

 

Awakening

Then, as the year 2000 approached, it gradually became evident that something was stirring deep within the human soul. Millions of people everywhere on the planet were awakening, as if from a deep trance, to the beauty, joy, and meaning of life. Many among them began to question consumerism. Some devoted themselves to rebuilding local economies and communities. Others took to the streets by the hundreds of thousands demanding a restoration of democracy, an end to corporate rule, and respect for the needs of all people and other living beings.

Still others pondered the implications of a growing body of scientific evidence pointing to the reality that matter, not consciousness, is the illusion and that conscious intelligence is the ground from which all else is manifested. A few began to rethink human possibilities in light of new evidence of life’s creative capacity for cooperation and radical self-organization. Some who reflected on the question of human purpose came to see humans not as the end of creation’s journey but rather as instruments of its continuing unfolding.

The first among the humans to awaken to this reality often suffered a deep sense of isolation from the mainstream of a society still entranced by the illusions of the materialistic culture. Their efforts to correct the serious institutional pathologies that had led humans to the brink of self-destruction were sometimes violently resisted by those who dismissed them as misguided opponents of progress and prosperity. Thus it was that an epic cultural struggle was initiated—a moment in time with deep implications not only for the future of humanity but for life’s evolutionary course as well.

The story I have just told is, of course, our story; the choices are our choices. The challenge before us is to create a new human civilization built on an understanding of the profound significance of life’s journey and our role in contributing to the whole.

Our species, far beyond any other, has been engaged in a continuing process of intellectual, social, and technological evolution toward ever greater species abilities. I find it one of the great and mysterious wonders of the cosmos that as each of our developmental stages exhausts itself in preparing for the next, it creates the imperative to break free from the familiar and take an uncertain step into the unknown. The developmental stage of global corporate capitalism has created the technical and organizational capabilities we need to take the next step. As the old stage approaches its end, it is awakening the consciousness of a new era.

Seattle ’99 made visible an awareness of a new political and spiritual consciousness, which is one manifestation of that awakening. Underlying the cacophony of voices in Seattle, two themes unified the protesters and the movement to which they gave expression. One was a commitment to democracy—the ideal of societies in which every person has a voice in the decisions that affect his or her life. The second was a commitment to life—to the creation of societies dedicated to the service of life, not money. All of the protesters in Seattle, to the best of my reckoning, as well as those in subsequent demonstrations, were drawn together by a realization that unless people of good will join in common cause to build a truly democratic world that works for all, we will find ourselves living in a world that works for no one. Seattle was an important step toward a grand convergence of political forces beyond identity and single-issue politics to a politics of the whole. Seattle also revealed how many of the movement’s major constituency groups are redefining themselves and their agendas.

Consider the four major groups with the leading roles in Seattle ’99: people of faith, labor unions, environmentalists, and youth. Participation by people of faith centered on the Jubilee 2000 campaign for debt forgiveness for Third World countries, which gives expression to the growing understanding within many Christian churches of the centrality of social and economic justice in Christ's teaching. This awakening is bringing a new vitality to a growing number of Christian denominations and congregations.

Labor unions expressed their commitment to international labor solidarity in recognition of the fact that in a low-wage, high-unemployment global economy the rights and wages of working people are at serious risk unless they are guaranteed for all.

Then there was the newly forged alliance between labor and environmentalists, with the theme “teamsters and turtles—together at last,” that so excited many of us. Growing numbers of union members are coming to realize that there will be no jobs without a healthy environment. Environmentalists are realizing that unless working people have secure jobs and labor rights, the environment will be destroyed in the desperate struggle for survival.

I was particularly heartened by the extraordinary leadership and commitment of the youth in Seattle, those who put their bodies on the line to bring the WTO meeting to a standstill. Tired of being manipulated and lied to by a system that is stealing their future, they spent months training one another in the principles and methods of nonviolent direct action. They are leading the movement’s most impressive and effective protest actions.

On the dark side, Seattle brought us face to face with the reality that once you scratch the surface of American democracy, you find a brutal police state. It was a powerful consciousness-raising experience, particularly for the hundreds of white Americans who were beaten by police for simply being there, arrested on trumped-up charges, and thrown in jail, where they were further brutalized and denied basic rights and necessities.

They found the jails filled with people of color and realized that what they were experiencing was what people of color experience every day at the hands of our so-called justice system. It began to dawn on some that this was one of the reasons why so few people of color participated in the demonstrations. For a white person to get arrested in a protest means a couple of days in jail and a badge of honor in the movement; for a person of color it can mean a life sentence. It made many of us understand how little we of the white skin know of the real issues facing people of color and how crucial it is that we learn about and embrace their issues as we embrace our own to make this a truly inclusive movement. The fall 2000 issue of YES! A Journal of Positive Futures focuses on the American gulag—on our growing prison-industrial complex with its devastating impact on people of color—and considers alternative approaches to prisons.

 

Cultural Creatives as a Force for Change

Although the movement’s most visible manifestations—such as Seattle ‘99— are political, its roots are in fact cultural. I expect that many of you know of the studies of Paul Ray and Sherry Anderson and what they call the “Cultural Creatives.” This is a group of 50 million adult Americans who reject the materialistic hedonism, cynicism, and consumerism of the dominant American culture. They are progressive on social and environmental issues and are generally optimistic about human possibilities for creating inclusive, life-affirming societies that work for all. Their numbers are growing rapidly.

Cultural Creatives have been the leaders of America’s most progressive movements and initiatives—including the Seattle protests—and are now engaged in crafting a new ecological and spiritual world-view, a new literature of social concerns, and a new problem-solving agenda for humanity. Imagine: fifty million Americans working actively for a just, sustainable, and compassionate society. It makes our visions of transformative change seem less remote, less idealistic, more immediate. Note that this same set of emerging values is also the driving force behind the rapid growth of the Green Party and Ralph Nader’s presidential campaign. The Green Party agenda is the agenda of the Cultural Creatives.

Ray and Anderson trace this new cultural consciousness to the civil rights movement of the 1960s, which awakened both blacks and whites to the fact that the norms traditionally defining our relationships with one another are not the natural order of things; rather, they were set by an unexamined racist cultural code that happened to serve certain interests.

Once we recognize and examine the previously unexamined codes of race relations, we become more conscious that similar belief systems define relations between men and women, straights and gays, people and the environment, people and technology, people and the economy. As each successive cultural trance is broken, the way opens to living more consciously in a coherent relationship with our fellow humans and with the whole of life.

Educator Parker Palmer has described how this awakening eventually translates into political and institutional change: the individual experiences an increasingly painful disconnect between his or her values and the realities of family, work, and community life that are grounded in the unexamined values of the old cultural codes. Eventually the individual decides, in Parker’s words, “to live divided no more.”

The initial attempts to live by authentic values in an inauthentic culture result in a sense of isolation that can be mitigated only by joining with like-minded persons to form communities of congruence, of which the Schumacher Center for a New Economics is one example. Initially small and isolated unto themselves, these communities eventually meld into larger alliances. Step by step, authentic cultural spaces are created and expanded. As alliances grow, they converge into ever larger wholes, gradually achieving the power to transform the logic and the reward systems of society’s political and economic institutions. This cultural awakening and its implications will be the focus of the winter 2001 issue of Yes! Magazine.

 

Economic Pathology

Given how fast the movement is building, we need to have in mind the outlines of a governance system for the world we hope to create. Here, as in other areas, we must look to life as our teacher. How do living systems govern themselves? How are they structured to make decisions? Who participates? By what rules? To whose benefit?

We know, for example, that healthy living systems are self-organizing, diverse, frugal, locally rooted, intimately adapted to local conditions, cooperative, and share resources to meet the needs of all their members. They are driven to optimize the transformation of the sun’s energy and the inert matter of the earth into diverse webs of living organisms with a capacity for intelligent choice and self-direction. In a healthy living system every being right down to the simplest individual cell is involved in making decisions. Indeed, each cell, each organism learns to meet its own needs in ways that serve the whole—or it expires. Remarkably, most of the self-organization occurs without any evident mechanism of central control. Life, it turns out, is wondrously democratic and self-organizing. The result is an enormously creative adaptive process through which the whole of life evolves toward ever greater complexity and self-awareness. This sounds remarkably like the kind of human society envisioned by the living democracy movement, by Cultural Creatives, by the Green Party, and by Small Is Beautiful.

By contrast, our present system of financial and corporate rule seems to have been modeled on a cancerous tumor. As you know, a cancer develops when a cell, due to a genetic defect, forgets it is part of a larger whole and seeks its own unlimited growth without regard to the consequences. That is pretty much a clinical description of the institution of the publicly traded limited-liability corporation. Combine this cancerous corporate form with an unregulated global financial market that runs on autopilot beyond human control, values only money, pursues the replication of money as its only imperative, and cannot see beyond next quarter’s financial statement—and you have a system driven by a deadly imperative to turn the living matter of society and planet into money as rapidly as possible for people who already have more money than they can possibly use.

Once we are clear that money means only numbers, we can see the true horror of our present situation. It brings to mind images from the old film “The Blob,” in which a mindless, undifferentiated mass of protoplasm moves out across the landscape, consuming the flesh of every living being it encounters. Think of the blob as a kind of mobile malignant tumor and you have a mental image of global capitalism.

Consider the power we have given to unregulated global financial markets. If a government is inclined to put forward policies that reduce or tax profits for a certain human or environmental purpose, then the financial markets attack its currency, its economy crashes, and the government falls. This is one of the reasons that when people elect a new government that’s not trying to give away democracy to corporations, the new government soon does exactly the same thing as the previous one. Similarly, if the financial markets catch the management of a corporation compromising profits for some human or natural interest, they trash its stock, stage a buy-out, or simply replace top management.

Driven by the incessant demands of financial markets, global corporations seek their own endless growth by extending their control over ever more of the world's resources, markets, media, and technology. Corporations with internal economies larger than those of most countries centrally plan the use of these resources to maximize shareholder return, eliminate cultural and biological diversity, and manufacture a materialistic culture that celebrates greed, profligate consumption, and inequality. They rewrite our laws in order to increase corporate freedom at the expense of human freedom and force people and communities into competition with one another in a life-and-death struggle for survival.

 

Institutional Evil

The corporation is more than a collection of people. Though our institutions are ultimately all human creations and in fact have no real existence outside of our minds, they have enormous power to shape our collective behavior in ways that no one may actually intend. Indeed, they can take on a character and purpose wholly independent of the values and purpose of any individual. As Matthew Fox observes in his book Sins of the Spirit, Blessings of the Flesh, “Institutions can exhibit an unbridled desire, a greed that can actually swallow up the earth and its health and the future of its children and that knows no national, ethical, or legal boundaries.” In short, institutions have a capacity for evil.

From time to time, those of us who have enjoyed comfortable and sheltered middle-class lives are jolted by stories of the human capacity for extreme violence against life, for extreme evil—even against one's fellow humans. In our own time the mere mention of the Holocaust, Kosovo, or the ruthless massacres in Uganda and Cambodia evoke horrifying images and a sense of ultimate evil. Our tendency is to attribute these experiences to the madness of a depraved leader—a Hitler, Pol Pot, Idi Amin, or Slobodan Milosevic.

Yet these horrors were not just isolated acts of a rogue individual, a crazed serial killer senselessly acting out some personal fantasy or vendetta. Nor can they be attributed simply to a momentary social breakdown expressed in mob violence. In many cases they are highly organized, in the example of the Nazi death camps even methodical, and enlist the enthusiastic participation of thousands, even hundreds of thousands, of people who in other settings might be models of civility. Such cases lead to the recognition that violence, pathology, and evil can be afflictions of institutions as well as of individuals and that institutions have the ability to act with evil intent beyond the intent of any of the individuals who act on their behalf as their agents.

Institutions are collections of rules, rewards, and cultural beliefs that shape the behavior of their participants. They are an essential feature of any clan, tribe, or society that melds individuals into coherent social units with capacities for survival and creative achievement beyond those of their individual members. Institutions are by nature empowering, in that they extend the capacities of the individual, and at the same time coercive, in that they place constraints on the behavior of their participants. Healthy institutions, which are an essential foundation of healthy societies, curb our tendencies toward violence while nurturing and enhancing our capacities for love and creativity.

Pathological institutions, on the other hand, are capable of evoking a form of collective madness of sufficient power to lead whole societies down the path of self-destruction. Perhaps the ultimate example is the global capitalist economy, which is indeed consuming the natural, human, social, and institutional capital of the planet—the foundation of all real wealth—in order to make more money for the already rich. A more profound example of institutional evil is difficult to imagine. To pick up on the theme of Andy Kimbrell’s lecture this morning, theirs is often a cold evil, based on the passionless calculations of global finance.

If humanity is to steer a collective course toward a more hopeful future, we must recognize that we are dealing with inherently pathological or evil institutional forms. We must come to understand the sources of this pathology and set about eliminating those sources from society.

 

The Historical Alliance of State and Corporate Power

It is instructive to recall that the modern corporation is a direct descendant of the great merchant companies of fifteenth and sixteenth century England and Holland. These were limited-liability, joint-stock companies to which the crown granted charters conferring on them vast powers to act as states unto themselves in the exploitation of colonial territories. For example, in 1602 the Dutch Crown chartered the United East India Company, giving it a monopoly over Dutch trade in the lands and waters from the Cape of Good Hope (the southern tip of Africa) eastward to the Straits of Magellan (the tip of South America).

The charter vested the Company with sovereign powers to conclude treaties and alliances, maintain armed forces, conquer territory, and build forts. The Company subsequently defeated the British fleet and established sovereignty over the East Indies (now Indonesia) after displacing the Portuguese. Early on, it acquired large tracts of land in Eastern Indonesia through a system of lending money to cultivators that led to their eventual dispossession. The Dutch gained control of the clove trade in the early seventeenth century by prohibiting the growing of cloves on land not in Dutch hands. Unable to produce sufficient food to sustain themselves on the remaining infertile land of their islands, the local people were obliged to buy rice from the company at inflated prices, which eventually ruined the local economy and reduced the population to poverty. This situation had many of the characteristics of modern-day projects funded with World Bank loans.

The British East India Company, chartered in 1600, was the primary instrument of Britain's colonization of India. In the early 1800s it established a thriving business exporting tea from China, paying for its purchases with illegal opium. China responded to the resulting social and economic disruption by confiscating the opium warehoused in Canton by the British merchants. This precipitated the Opium War of 1839 to 1842, which Britain won. As tribute, the British pressed a settlement on China that included payment of a large indemnity to Britain, granted Britain free access to five Chinese ports for trade, and secured the right of British citizens accused of crimes in China to be tried by British courts. This settlement was a precursor of present-day “free trade” agreements imposed by strong nations on weak nations.

The publicly traded, limited-liability corporation is an institutional form that allows for the virtually unlimited concentration of economic power for the exclusive financial benefit of its shareholders without public accountability for the consequences of its use. For anyone whose goal is to exploit people and planet for a quick profit it has no equal. Those who would create societies that best serve life recognize that it is inherently evil by design and treat it the way we treat any cancer: try to eliminate it.

I attended the annual Bioneers Conference held in California last week. One of the speakers, Joel Salatin, was talking about the problem of disposing of the manure produced by enormous pig and chicken factories. He noted that the best way to deal with the problem is not to look for new recycling methods but rather to eliminate the factories and put the pigs and chickens back on the land where they belong. The best solution to the problem of the corporation is much the same. Break up the production and marketing functions performed by mega-corporations and return them to human-scale, locally owned enterprises where they belong.

I don’t claim it will be easy, but neither was eliminating the institution of monarchy to give birth to democracy. Our present task is similarly to eliminate the institution of the publicly traded, limited-liability corporation to give birth to life-affirming post-corporate societies. We might call them civil societies.

 

Civil Society vs. Capitalist Society

In its most common current use the term civil society is simply another name for nonprofit, nongovernmental organizations. In its more appropriate and powerful use, which goes back to the ancient Greek philosophers, the term refers to a civil-ized society, in which free and equal citizens act in their civic roles with a mindful consciousness of the needs of both self and community.

The public life of a civil society is defined by the cultural sphere. The culture is itself a product of the active community life of free, aware people whose personal identity is grounded in a deep sense of their spiritual connection to the whole of life. Such a culture is authentic, and its values, symbols, and beliefs in turn serve as the foundation on which the members of a civil society create and formalize the institutions of polity and economy.

The life-affirming values of an authentic culture lead naturally to the creation of a democratic polity based on a deep commitment to openness, active participation in political discourse, and one-person, one-voice, one-vote equality and consensus-based decision making. They also lead naturally to the creation of authentic market economies comprised of local enterprises that provide productive and satisfying livelihoods for all and vest in each individual a share in the ownership of the productive assets on which their livelihood depends. This creates the possibility for the society to be radically self-organizing and predominantly cooperative in the manner of all healthy living-systems as well as to maximize the opportunity for each individual to develop and express his or her full creative potential in service to the life of the whole. The power and values that define the civil society flow upward from the living spirit through people to culture and then to institutions.

Our present decidedly uncivil capitalist society differs markedly from civil society. Contrary to popular myth, a capitalist economy is not the same as a market economy. In fact, they are almost diametric opposites. A capitalist economy by design concentrates control of the means of production in the hands of the few to the exclusion of the many, which is exactly what our present economy does. It has of course won out over communism. What is less often noted is that it has also won out over democracy and a market economy. The capitalist economy features monopoly, financial speculation, absentee ownership, deregulation, public subsidies, and central economic planning by megacorporations. A market economy, in contrast, is organized by people engaging in the production and exchange of goods and services as a means of livelihood. A market economy features human-scale enterprises, honest money, rooted local ownership, and a framework of democratically chosen rules.

In the capitalist society financial markets define both power and values. The economy is the dominant sector, with the institutions of government and culture taking a subordinate position in the service of its imperatives. The replication of money—and thereby the power of those who have money—becomes the defining purpose of society. Corporations and financial markets shape the institutions of government and culture to align society's rules, values, and symbols behind this narrow purpose.

In the end, money’s power resides only in our minds. It is a function of culture, not reality. So long as we accept the myth that money is the key to obtaining all that gives life meaning, it retains its hold over our lives. This leads to a critical insight: Capitalism's power rests on its ability to maintain a materialistic culture that denies the spirit and constantly reinforces the idea that humanity’s capacity for greed, competition, and violence exceeds its capacity for sharing, cooperation, and love.

Dependence on maintaining an inauthentic and unexamined culture is capitalism’s critical vulnerability, for such a culture is contrary to what most people know deep within their being to be true. An inauthentic culture cannot survive the awakening of cultural consciousness, nor can the rapaciously destructive institutions of capitalism. It is an awakening—advanced by the civil rights, women’s, peace, environmental, living democracy, and other progressive movements—that deepens our awareness of the underlying spiritual unity of the whole of life. This spiritual awareness informs the collective consciousness from which flow an authentic culture and the democratization of the institutions of polity and economy. In short, cultural awakening is the source of civil society’s growing power and the key to the transformation of capitalist society to civil society. The winning strategy will ultimately be a cultural strategy.

 

Cultural Strategy

It is important for those of us who seek to replace global capitalism with a civil society to recognize that our primary advantage is in the realm of culture and that a cultural strategy must be the foundation of our political strategy. The 50 million Cultural Creatives are a source of potentially enormous transformational power, yet most of them feel isolated and powerless because they don’t see themselves reflected in the corporate media, nor are their concerns being addressed by the political system. One of the most important things we can do is reduce their sense of isolation by helping them form communities of coherence—or locate already existing ones— from which they can connect to the larger movement.

This is the power of what groups like the Schumacher Center, YES! Magazine, and the Green Party are doing. They are breaking down our isolation by helping us to see how many of us there are, encouraging us to make contact with one another and build new agendas in harmony with the values of a civil society. The presidential election campaign 2000 makes clear how at odds the agendas of both the Republican and Democratic parties are with the values and agenda of a civil society. They both favor increasing military expenditures, the manipulation of genetic structures for profit, and the strengthening through corporate globalization of corporate rights and freedoms at the expense of human rights and freedoms. Both parties are aligned with the materialistic values and world-view of global capitalism. Both are owned by corporate money and serve the corporate agenda. We must commit ourselves to creating a world that works for the whole of life, and we must engage in the process of creating a political movement consistent with that objective.

Since the legitimacy of corporate rule depends on cultural myths and illusions, simple truth-telling to affirm what people already know in their hearts can be a powerful revolutionary act. Consider the possibilities once the following truths become a foundation of the dominant culture:

• The interdependent web of planetary life is the foundation of our existence and the source of all real wealth.
• Cooperation, not competition, is the key to life’s success.
• All the children are our children, every one; all people are our people.

Finally, let us define and name our growing global movement in terms of what we intend to create, not just what we’re against. Since two of the movement's defining themes are democracy and life, some of us are suggesting we might call ourselves the Global Movement for a Living Democracy—borrowing the name of the Living Democracy Movement in India that Vandana Shiva has helped to build and reminiscent of the Center for Living Democracy founded by Frances Moore Lappé.

Whatever we call ourselves, the great struggle between the forces of corporate globalization and the forces of the emerging movement—between financial values and life values—is far from resolved. But let us hope that humanity’s long-standing dream of a truly civil society, a dream shared by countless millions throughout human history, is an idea whose time has finally come. It is in our hands to make this happen.

 

Excerpts from the Question & Answer Period

(Questions were inaudible; only the answers follow.)

I think the very first priority on the policy agenda must be political reform. That’s the foundation for so much else that needs changing. What Ralph Nader has been advocating, as I understand it, is exactly what I’ve been advocating—that we need public financing of elections and we need a guarantee of free time on the public airways for public dialogue and debate on political issues and political candidates. For democracy to work we must get bribery out of politics.

Taking steps to eliminate corporate welfare would certainly be another extraordinarily important measure. In looking at the statistics on the costs that corporations impose back on society, we can start with Paul Hawken’s estimate that corporations in America now receive more in direct cash subsidies than they pay in taxes. That’s something that needs correcting.

It’s always been fascinating to me that one of the most fundamental principles of a market economy is that producers have to absorb the full cost of their products, and this has to be reflected in the market price of those products. A few years ago Ralph Estes, a public accountant, put together an inventory estimating all the costs that corporations externalize onto the public in the United States. He came up with the figure of 2.6 trillion dollars a year. If we set rules that require full cost-internalization and perhaps set fees for any costs that are not fully internalized, we would quickly see just how grossly inefficient most of our big corporations are. Most of them would be out of business. So that might be another direction in which to move.

I see three critical issues in the attempt to get rid of the institution of the publicly traded, limited-liability corporation. One has to do with size. An obvious starting point is simply to say that for the most part mergers are bad for society, and smaller is better than bigger. There’s a good Schumacher concept. We should stop approving any mergers or acquisitions unless somebody can prove an absolutely compelling public interest in that kind of consolidation. Then we begin to get serious about enforcing anti-trust legislation in banking, in the media, and in agribusiness, which are critical control points in society.

One of the pernicious features of the publicly traded corporation is the fact that it institutionalizes one of the worst forms of absentee ownership. My experience in Asia was very much like Schumacher’s. I learned there about the dysfunction brought about by absentee ownership. If the person who owns the land in the village doesn’t reside in the village, it tends to be disastrous for the people who live there because the only interest the owner has is in extracting as much profit as possible.

Now, one of the key points we need to address is the need to move away from the incredibly perverse system of absentee ownership in which the shares of a corporation are owned by people who are separated from the company by professional money managers, mutual funds, retirement funds, and so forth, with the result that there is no direct human connection between the rights and powers of ownership and accountability or even awareness of how that power is used. We need to move toward the system of real stakeholder ownership, toward the idea that if you are going to own a share in an enterprise, you should be a worker, a member of the community, a customer, or a supplier of that enterprise so that there is more than a purely financial connection. Once we have that principle in mind, we can begin to put in place measures that move us in that direction.

I’m a great believer in private property. I think private property is a wonderful thing. I think it is so wonderful that everybody should have some, and basically it should be connected with your means of creating your livelihood, which goes back to John Locke and his argument for the concept of property rights. He lived in England at a time when there was lots of undeveloped land. His idea was that if people went out and cleared some land to make it productive for growing food as their means of livelihood, by that act they should acquire the right to that property. There was a definite limit to how much land each person was able to clear and till, and it was assumed there would always be more land that others could go and clear. That becomes a moral foundation of our whole concept of property rights. It’s not a bad framework for finding a way to secure a means of livelihood.

The tax records of public corporations, as they call themselves, should be a matter of public record, and it would be very illuminating if, in addition to publishing the ranking list of billionaires, we regularly published the list of what taxes each corporation pays and which ones are not paying taxes at all or are even getting tax rebates, which of course many of our biggest corporations do get. That’s such a straightforward, simple, obvious idea.

I think it would be well worth examining Henry George’s idea of taxing land to eliminate the private gain from inflation of land values and maintain price stability. I think that’s part of the much larger issue of trying to eliminate the causes of financial “bubbles,” which basically allow people with money to become richer without doing any work in return, usually as a result of either the inflation of land values or the inflation of stock values. The Georgist scheme would eliminate the inflation of land values; the shift to stakeholder ownership of corporations would eliminate the stock market as a source of financial bubbles.

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As I understand it, much of the research on how to break up corporate agriculture without restricting the food supply shows that small farms are in fact more productive and that once the transition is made to organic agriculture and the soils that have been destroyed by artificial fertilizers and pesticides are restored, productivity further increases. Now, you don’t just immediately step in and peremptorily change the system. There has to be a gradual process of transition and restoration.

There are vested interests that claim chemical agriculture is more productive. But even if that were true, chemical agriculture is dependent on the use of nonrenewable resources, which will be in ever shorter supply. At some point we’re going to have to eliminate our dependence on them.

 

Closing Remarks  

I was struck listening to Marie Cirillo’s presentation by what she says about how little things have changed. The dynamic she described of foreign corporations with absentee owners coming to her Appalachian community of Clearfork, Tennessee, and destroying the land and the economy for a quick profit has direct parallels with what I was describing about the colonial corporations of the Dutch and British empires. And that’s all consistent with my own experience in terms of Third World development. It’s why I came back to the United States. I recognized that although colonialism had supposedly ended, it was only the language that had changed. Now the cry is development, trade, foreign investment. It all sounds new, but what we have is a consistent pattern of colonization that takes different forms yet still combines manipulation of the way we think with dominance of the economy by institutions designed to concentrate the control of resources and wealth in the hands of a few. The most disturbing aspect is the extent to which—in the name of development, in the name of productive activity—the new colonialism is actually structured not to create wealth but to extract it.

That’s exactly what Marie Cirillo described in such eloquent detail based on her own experience. Those companies aren’t there to manage forests sustainably or to create wealth for the community but rather to strip-mine the minerals, to clear-cut the forests.

All this is leading to the point where we are engaged in such deep destruction of the fabric of society and the resources of the planet that we can speak of approaching the end game. This is why I try to emphasize so strongly that we are not going to fix this situation by tinkering at the margins. We are not going to change it by buying into the idea that it’s a given, that this is the inevitable outcome of globalization and corporate power. We’ve got to step back and start asking fundamental questions about what kind of world we want to live in. And we’ve got to understand that we have the right to seek deep change, that if we do not pursue the path of deep change, we are headed toward the collapse of civilization and the collapse of our planet’s life-support system.

This is a frightening prospect, but it’s also a great opportunity because we not only urgently need to create something different, we have the means to do it. And if we are going to create something different, we should be asking, How do we want to live with one another? What kind of relationship do we want with the earth? The starting point is the awakening of our consciousness to the way our institutions are structured, to the nature of our cultural conditioning—all the way from our scientific ideology to many of the precepts of religious teaching. Begin to re-examine, begin to question, begin to put in place something totally new.

And it’s happening. Beyond all these individual experiments there is a deep awakening taking place worldwide. That is what has been so exciting for me, having the opportunity to talk to people all over the world and realizing how many groups there are like this one today and how many people there are who are working for serious change. Groups are beginning to join together, and we see the movement getting larger and larger and more powerful. So we need to let our dreams flourish and have the courage to act for real change.

 

David C. Korten is co-founder and board chair of YES! Magazine, co-chair of the New Economy Working Group, president of the Living Economies Forum, an associate fellow of the Institute for Policy Studies, and a member of the Club of Rome. He is a founding board member emeritus of the Business Alliance for Local Living Economies (BALLE) and a former associate of the International Forum on Globalization. In 2011 he was named an Utne Reader visionary.

Earlier in his career, in addition to serving as a captain in the U.S. Air Force, David was a Harvard Business School professor, an Associate at the Harvard Institute for International Development, a Visiting Lecturer at the Harvard School of Public Health, a Ford Foundation project specialist, and Asia regional adviser on development management to the U.S. Agency for International Development. He lived and worked for twenty-one years as a development professional in Ethiopia, Nicaragua, Philippines, and Indonesia

His books include When Corporations Rule the World (1995); The Post-Corporate World: Life after Capitalism (2000); The Great Turning: From Empire to Earth Community (2006); Agenda for a New Economy: From Phantom Wealth to Real Wealth (2009 & 2010); and Change the Story, Change the Future: A Living Economy for a Living Earth (2015).

David Korten has MBA and Ph.D. degrees from the Stanford Business School.

 

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Schumacher Center for a New Economics and David C. Korten