Get Free From Wall Street: An Interview With David Korten
David Korten’s 1995 bestseller, When Corporations Rule the World, was a key document in building the anti-globalization movement. In the aftermath of the 2008 economic meltdown, he wrote Agenda for a New Economy, a critique of the overwhelming influence of Wall Street on economic policy, which has resulted in a political system that serves, not the many, but the very wealthy few. Eighteen months later, Korten is back with a much-expanded second edition of Agenda in which he details a strategy for taking back our political and economic systems and using them to create localized, community-controlled economies that foster the things we really need. I had a conversation with David at the YES! offices.
Doug: I’d like to talk with you about the new edition of Agenda for a New Economy, and your thoughts on the current state of the U.S. economy. The first edition came out just a bit more than a year ago. Why a second edition so soon?
David: Well, the first edition was written in immediate response to the crash. I was very taken by the fact that the crash opened up the potential for discussion of some really deep but neglected issues. To my dismay that wasn’t happening. The political system jumped in immediately to try to fix Wall Street—to get it back to its normal function—which seemed to me the totally wrong agenda.
The book was written and published within the space of two months, which meant that I was building it around things that I had already had in place.
Doug: Quite an accomplishment. So what’s different in the new edition?
David: The second edition goes so far beyond the first that many people ask me, “Well why do you call it a second edition rather than a new book?” It has 100 additional pages, a much stronger framework, and a much more comprehensive and systemic, holistic agenda. I’m very excited about how it came out.
Doug: What do you see as the principal routes in to the kind of systemic change you’re talking about—especially the ones that go more to public participation than top-down organization?
David: Well, in fact, most of the change has to be bottom-up. Because—going back to my larger frame in The Great Turning: From Empire to Earth Community—if you understand the organization of society in terms of dominator systems, the impetus for change rarely, if ever, comes from within the system. Even changes in the laws depend very much on popular mobilization and demands on the political system.
One of the things that is much clearer in the new edition is the framework for a strategy of change, which, as I’ve come to see it more clearly, has three essential elements.
The first is changing the stories in the cultures. Much of the work here can be done on a very individual level, in terms of organizing conversations in your neighborhood or your church or your library, whatever groups you’re connected to. Engaging people in conversation around the reality of the economy that we have, the ways in which we’re trapped in fabricated cultural stories, and the possibilities of a new economy. That’s part of changing the economic story that frames the policy debates.
The second element is creating the new reality. It is about shopping locally, supporting local products, local farmers, supporting the various initiatives around rebuilding local food systems and local economies.
And the third is engaging politically to enact real policy changes that support the new economy over the old economy.
Doug: In the United States, it’s an article of faith that we depend on Wall Street for economic well-being. You suggest that Wall Street is actually the cause of many of the problems on Main Street. How are people reacting to that challenge to such a widespread belief?
David: Well, it’s a very interesting tension, because at one level, people have seen so clearly the corruption of Wall Street: the greed, the meanness, the predatory ethics and practices. So there is enormous outrage against Wall Street that cuts across the political spectrum.
On the other hand, we have been lured into a situation where many of us depend for our retirement on Wall Street investments, which is really a euphemism for Wall Street speculation. Since our expectations of income cannot be met by Social Security alone, we look to these financial funds as the real basis of our retirement security. So that creates an enormous political constituency in favor of Wall Street. The tension is very real and very powerful.
Doug: What needs to happen to resolve the tension between outrage and dependency?
David: The interesting part of this and the key to understanding it is recognizing the distinction between real wealth and what I call “phantom wealth.” Phantom wealth is money that is created from nothing, unrelated to making anything of real value. The Wall Street game is about generating financial claims on the real wealth of society, while doing nothing to contribute to the pool of real wealth—food, shelter, entertainment, transportation, education, health care—on which those claims are made.
Doug: Why is this distinction hard for people to make?
David: Our whole language about money is so convoluted that it’s almost like the language was designed to prevent us from seeing the reality. When a person uses terms like “assets,” “wealth,” “capital,” “resources,” there is absolutely no way you can tell whether they’re talking about money, which is simply accounting entries, or about real things that those accounting entries are claims against.
If you add up all the financial assets in the world, they exceed the market value of all the world’s real wealth, which means those claims can never be fully actualized.
Over the long term, the system has to collapse, as it did. Since we are pumping it back up, it will inevitably keep collapsing until we fundamentally restructure it.