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The New Economy Challenge: Implications for Higher Education

A new economy requires a new approach to education. David Korten discusses how we can rethink our goals, reskill ourselves, and teach Spaceship Management 101.
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Real Wealth

Real wealth has intrinsic value: land, labor, food, and knowledge are all examples. The most valuable of all forms of wealth are those that are beyond price: love; a healthy, happy child; a job that provides a sense of self-worth and contribution; membership in a strong, caring community; a healthy, vibrant natural environment; peace. None of these has any place on corporate balance sheets or in our calculations of gross domestic product. Consequently, many of our ruling economic institutions have become highly efficient in converting real living wealth into phantom financial wealth.

ThimphuPutting the Science of Happiness into Practice :: News from the 5th International Conference on Gross National Happiness.

From the standpoint of society, money is properly treated as a means, not an end. Rather than directing money to financial speculators and scam artists devoted to creating phantom wealth for personal gain, we must create new official money systems designed to effectively link underutilized resources to unmet needs to improve the health of our children, families, communities, and the natural environment. Such systems will necessarily be highly decentralized and publicly accountable to local people and communities.

Unfortunately, most students who graduate from our institutions of higher learning—even with degrees in economics—have no idea how the money system operates and no intellectual tools to address such questions. 

Educating for a Sustainable World

For the most part, our existing educational programs and institutions are preparing their graduates for jobs in institutions destined to fail or be replaced.

Although I’m sometimes called an economist, I view the economy through the lens of an organizational systems designer. As a Harvard Business School professor in the early 1970s, I taught the art of structuring human relationships in corporations to maximize profit. Partly, it involved getting the incentives right; it was also about culture, authority, communication flows, and a host of other influences subject to management intervention.

The same intellectual tools can be used to design the institutional structures of whole societies either to consolidate the power of ruling elites or to share power and facilitate creative, democratic self-organization directed to enhancing community well-being.

Understanding the nature and implication of such choices is essential to anyone who is going to provide effective leadership in creating the institutions of the future. Yet I am not aware of any place within our universities where the necessary skills are taught, except in business schools that teach their application for purposes contrary to the purposes our new institutions must be designed to serve.

Youthworks ApprenticesTrade Your Job
The old apprenticeship model of learning by doing gets new life as people who’ve been left out of the job market train to meet the growing demand for green-collar workers.

This suggests something of the magnitude of the implications for our educational institutions. For the most part, our existing educational programs and institutions are preparing their graduates for jobs in institutions destined to fail or be replaced. Not only must future graduates be prepared to serve institutions, for which we now have few models, that support ecological balance, shared prosperity, and living democracy, they must be prepared to create such institutions. It isn’t just about young people. The entire society must be retooled and reskilled—immediately.

Few of our existing educational institutions, including our institutions of higher learning, are prepared for what they are now called upon to do. They are organized around narrowly defined academic disciplines, some of which bear major responsibility for promoting the cultural beliefs and institutional arrangements that got us into our current mess.

The academic programs of the future must produce citizens who think and act in terms of systems, not disciplines—and most particularly, citizens who think and act in terms of the needs, potentials, and dynamics of living systems.

A Three Part Strategy

Our current task is to change the prevailing stories about the nature of wealth and the purpose of the economy.

Such a dramatic transformation of an institutional system so powerful and so deeply entrenched as the complex of economic power that is driving the neoliberal agenda would be unimaginable, except for the fact that millions of people are already engaged in making it happen. YES! Magazine, for which I serve as board chair, is devoted to telling the stories of these initiatives. The more intentional we are about the desired outcome and the change strategy by which we pursue it, the greater our prospect for success.

The emerging change strategy features three elements:

  1. Change the defining stories of the mainstream culture. It is a simple, but rarely noted truth. Every transformational social movement begins with a conversation that challenges a prevailing cultural story with a new story of unrealized possibility and ultimately displaces the old story. The civil rights movement changed the story on race. The environmental movement changed the story about the human relationship to nature. The women’s movement changed the story on gender. Our current task is to change the prevailing stories about the nature of wealth, the purpose of the economy, and our human nature. Examination of our old and new versions of these stories should have a prominent place in the curriculum.
  2. Create a new economic reality from the bottom up, as millions of people the world over are doing in their efforts to rebuild local economies and communities. They are supporting locally owned human-scale businesses and family farms, developing local financial institutions, reclaiming farm and forest lands, changing land-use policies to concentrate population in compact communities that reduce automobile dependence, retrofitting their buildings for energy conservation, and otherwise working toward local self-reliance in food, energy, and other basic essentials. This is the work, for example, of the Transition Towns Movement. In the United States, I serve on the board of the Business Alliance for Local Living Economies (BALLE), which is building a national support system for such efforts. People involved in these efforts are learning to create the institutions of the New Economy by doing it. Our universities should develop the capability to facilitate this process through the creation of community-based social learning centers.
  3. Change the rules: Current law and public policy largely favor the self-serving and deeply destructive corporate-led global economy. That works well for the interests of big money. People and the planet are better served by rules and policies that support local control and protect community interests. University programs in public policy can and should develop public policy programs that address this need.

Here are some other specific implications for our universities:

  1. Take down the walls that separate the university from the community. Engage university faculty and students in the social learning processes by which locally rooted human communities are learning to align themselves with the structures and processes of their local ecosystems. Place less focus on degree programs and more focus on continuing, lifelong learning.
  2. Break down the disciplinary barriers and reorganize as interdisciplinary teams engaged in the study and design of critical institutional systems.
  3. Teach history as an examination of large forces that have shaped history, in search of insights into how large-scale social change happens.
  4. Replace existing economics departments with departments of ecology. Include ecological economists in these departments, but put the focus on the ecology. Invite the conventional economists who currently staff most university economics programs to retire, retrain as ecological economists, or be assigned to teach economics as one of a number of courses on the intellectual history of the 20th century and where it went wrong.
  5. Feature courses on human developmental psychology that explore how the pathways to a fully mature human consciousness are shaped by differing cultural and institutional experiences.
  6. Replace the metaphor of the machine with the metaphor of the living organism as the defining intellectual frame. Staff biology departments with new biologists who strive to understand life on its own terms rather than through the dead-world lens of Newtonian physics.

We humans are engaged in a monumental work of reinventing our societies and ourselves. It is the most exciting intellectual challenge and creative opportunity in the whole of the human experience. We have the power to turn this world around for the sake of ourselves and children for generations to come. It requires rethinking and reorganizing our institutions of higher learning in the most fundamental ways. We are the ones we have been waiting for. Thank you.

David Korten author pic

David Korten is board chair of YES! Magazine and author of Agenda for a New Economy: From Phantom Wealth to Real Wealth, The Great Turning: From Empire to Earth Community, and When Corporations Rule the World. He serves as a board member of the Business Alliance for Local Living Economies and co-chair of the New Economy Working Group.

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