71 of 75 people found the following review helpful:
5.0 out of 5 stars
Visionary, February 4, 2009
"Agenda for a New Economy," by David Korten is a valuable discussion of how there needs to be paradigm shift in the way we view Wall Street and the structure of the overall economy. Korten builds upon some of the major themes of his previous book, "The Great Turning," in calling for an economic system that measures wealth less on the fiat currency system and more on families, communities, healthy children, and environmental health. There has been plenty written about the corruption of Wall Street and the inequality the system breeds, but very little has been offered in the way of giving folks a blueprint of sorts for an alternative system that values people over an unstable monetary system. That is, until now.
One of the more interesting points in the book is the discussion of the nature of wealth. Korten refers to the current measure of wealth as "phantom wealth,' in which he lays out a case for its replacement with "real wealth." He makes this case quite well. Korten even goes so far as to call for the elimination of Wall Street. This idea will likely shock most readers. The immediate response is to think, "This guy is off his rocker! He must be naïve. Can that really happen?" Korten, a former business professor at Harvard, is no lightweight when it comes to economic theory. In "Agenda for a New Economy" Korten harkens back to the original ideas espoused by the father capitalism, Adam Smith. What we have now is not the same type of market system envisioned by Smith. Adam Smith would be shocked at all the tinkering and smoke and mirrors engrained in the current system. Korten elaborates on the many virtues of getting back to the basics of a market economy and true capitalism. He terms his vision as the replacing of Wall Street with "Main Street."
Korten gives a loose blueprint for restoring the economy and making it viable long-term. His vision is focused squarely on the development and nurturing of families and communities as opposed to the nurturing of the ultra-wealthy and corrupt. In the process, the environment and public health will be strengthened to a degree never before seen. It is a bold vision that some people may scoff at as being unrealistic, but Korten, no stranger to development, has seen first-hand around the world how his ideas can be put into place. He is now challenging readers to boldly start thinking about and discussing where to go from here.
"Agenda for a New Economy" should be read by every policy maker and citizen in this country. It is filled with sound examples, historical context, and economic theory. It explains the nature of the sputtering engine powering the economy and what needs to be done to radically rebuild the engine. I urge everyone to read this book and tell everyone you know to read it. You may not agree with every single idea in this book, but I guarantee that you will think hard about every idea. I think that was the intent of Korten, and to that extent this book is a complete success.
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80 of 86 people found the following review helpful:
3.0 out of 5 stars
What we needed was an "actionary"; he gave us another take on "visionary"., April 11, 2009
BOOK REVIEW: Agenda for a New Economy: From Phantom Wealth to Real Wealth, by David C. Korten.
Let me begin this review by emphasizing: I agree with almost every detail of the agenda Dr. Korten presents. Please allow me to say that again: I agree with almost every detail of the agenda Dr. Korten presents.
Yet, with regret, I can recommend this book only to those people who are not already familiar with Dr. Korten's work. To begin with, the main title could be rewritten as "yet another agenda for new economy". Also, the promotional blurb at the top of the front cover mischaracterizes the actual content. In its current form, it reads: "Why Wall Street can't be fixed and how to replace it". In my view, the actual text better supports substantives than practices. So, I would suggest instead, "Why Wall Street can't be fixed and what to replace it with"--with "how" left out.
But that's what Dr. Korten has been writing about for a long time, beginning with his contribution to the edited collection Alternatives to Economic Globalization A Better World Is Possible (2002), through his recent The Great Turning: From Empire to Earth Community (2006). Most of his readers agree that Wall Street is broken and can't be fixed; the really pressing question isn't "what to replace it with", but "how to go about replacing it"--most likely, I acknowledge, toward some variation of Dr. Korten's "Agenda". What we need is a book of practical suggestions for getting from here to there, in the face of serious, determined, and supremely well-prepared and even better funded opposition; not another book of agenda items.
Here's why I keep harping on this. When I recall movements that have succeeded in bending the arc of history toward justice, I find myself associating them with people who thought up and led action. Gandhi had a vision, and a story--and still led the "salt march". The image of his followers non-violently lining up for their turn to "take one for the movement"--a clubbing by a British soldier, that is--is seared into my memory. Martin Luther King led his supporters to Selma Bridge, even though they all knew that vicious police with vicious dogs awaited their arrival. Nelson Mandela endured more then a quarter of a century of imprisonment, directing a revolution, that as revolutions sometimes do (see US Revolution, French Revolution), got violent--and we still like to think of Mandela as having bent the arc of history a bit further toward justice, or at least I do. Lech Walensa led shipyard workers in implementing the agenda he originally developed to unionize them--an echo of the victory won by the nascent United Autoworkers Union decades earlier through The Great Sit-Down strike against GM and a sharp rebuke to business unionism in the US. Caesar Chavez organized national selective boycotts, and over time brought some justice to farmworkers. But, I believe that none of these people would be as significant, nor their movements as successful, nor the arc of history bent as far toward justice, had they limited their attention to writing agendas.
Let me offer three specific critiques of Dr. Korten's most recent agenda. The first arises from his adoption of the commonly used distinction, Wall Street - Main Street. This distinction is an organizer's dream, but identifying large corporations with Wall Street oversimplifies a much more complex relationship. Many people on Main Street have invested in the large corporations associated with Wall Street; for them, Wall Street means - or at least used to mean, and they hope will again mean -- retirement income. To ask them to help us do away with Wall Street would be tantamount to asking them to saw off the branch they are sitting on. If we hope to get them to join us, we'll have to do better at enticing them then that.
Furthermore, it was the large corporations that gave rise to conditions in which the lower classes could organize and fight bourgeois owners - as large institutions generally tend (eventually, usually after protracted contesting) to give rise to conditions in which oppressed groups have organized and fought for rights do.
My second critique arises in reaction to a thread that runs through the book and comes to a head on page 173. After extolling the virtues of self-organizing systems throughout the book, Dr. Korten recalls that "global civil society mobilized more than 10 million people on February 15, 2003, to protest the anticipated US invasion of Iraq [... and that The] New York Times dubbed it the second global superpower." That action, as Dr. Korten goes on to write, "[was] made possible by the Internet, it was the largest, most inclusive, and most global expression of public opinion in human history." Unfortunately, for hundreds of thousands of reasons far more important than the point I am trying to make here, and as Dr. Korten himself acknowledges, the demonstration failed... why? Well, curiously enough, Dr. Korten doesn't offer an explanation. Perhaps it wasn't good enough to be merely the second global superpower; the first global superpower may have been far enough ahead to get its way. And who knows? The first global superpower might have gotten its way - as Herbert Marcuse might argue- specifically because of the foundational and steering influence it exerted in creating the Internet in the first place.
My third critique is that Dr. Korten's social science method--for example, his effort to identify causality--leaves much to be desired. For example, on page 85, Dr. Korten asserts:
"The middle-class ascendance in post-World War II America was an extraordinary demonstration of the possibilities of a democracy grounded in the belief that everyone should share in the benefits of a well-functioning society."
But, even within that superficially non-problematic statement, there are at least two, not necessarily, and not always connected notions: [1] demonstrating the possibilities of a democracy, and [2] democracy grounded in a belief about sharing. And other factors may have contributed; most notably, the Marshall Plan, which induced the world to "buy American" during their post-World War II reconstruction; also, the US government's decision to stimulate demand as a way to avoid mass job displacement and mass unemployment during America's own "reconstruction". Furthermore, as China's recent "ascendance" suggests, benefits of similar scale are not necessarily restricted to democracies, at least not in the short run. And who knows how long the "short run" is for a society that has been around for 3,000 years or so?
In conclusion, and in tying all this together, I am still hoping that Dr. Korten will write a practice-oriented book, a "how-to" book--actually, more of a "ways-to" book (nb: "ways" is plural)--or even a "paths to" (recalling Amory Lovins' book, Soft Energy Paths (circa 1977). I am still hoping that he will use his considerable celebrity to elevate the status of people who are focusing on actually doing his agenda, and to elevate the status of such effort. And then I hope he will become something of a wandering minstrel who, much as bees cross-pollinate, flits knowingly from place to place, sharing news from attempts made elsewhere, and mixing in his own wisdom--but mostly: listening, asking, probing, nudging, exhorting, and challenging--the sorts of things his efforts over the years have earned him the stature to do and which would had he not done them make him seem presumptuous for attempting to do. We have to figure out how to go about replacing the world system... and the ice is melting.
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30 of 32 people found the following review helpful:
5.0 out of 5 stars
Impressive!, February 12, 2009
Korten begins by asking "What do Wall Street institutions do that is so vital that it justifies spending trillions to save them from their own excesses?" "Might there be other ways to provide necessary and beneficial services with greater effectiveness and at lesser cost?"
Our government has come to believe it should no longer be concerned with producing real wealth - goods and services with utility; instead, we can grow our economy faster with less exertion by securitizing real assets and pumping their value up. Unfortunately, asset bubbles create only phantom wealth that increases the claims of the holder to a society's existing real wealth, and dilutes the claims of everyone else. We need to move from a Wall Street focus (making money, using global financial capital) to a Main Street focus (creating livelihoods, using local/national capital).
In 1950, manufacturing accounted for 29.3% of U.S. GDP, vs. financial services' 10.9%. By 2005, manufacturing contributed only 12% to GDP and financial services were at 20.4%. By 2008, financial services was the largest U.S. economic sector.
Achieving this required removing restrictions on debt/equity ratios, consumer interest rates, lending practices (eg. special charges), relaxing financial reporting standards, and creating financial conglomerates. In 2006, U.S. financial sector debt (largely financial institution loans to other financial institutions to leverage their financial speculations, totaled $14 trillion - 32% of U.S. debt, and 107% of U.S. GDP. (This was money NOT available to improve production.) When Lehman Brothers collapsed, it was leveraged 35:1.
In 2007, the 50 highest-paid investment fund managers averaged $588 million in annual compensation - 19,000X that of the average worker. The top five each took home over $1.5 billion. These looted funds should have been serving as reserves to cover their high-stakes bets.
From 1980 to 2005, the top 1% increased the share of taxable income from 9 to 19%, facilitated by trade policies, hiring illegal immigrants, and accounting tricks to understate inflation's impact on indexed wages and Social Security increases. The World Bank and IMF loans boosted big corporate projects that offered lots of scamming opportunities; their failure brought the rich more opportunities through prescribed remedies of selling the nations' natural assets, opening borders to foreign imports, and privatizing public assets and services.
A recent United Nations University study found the richest 2% own 51% of the world's assets, vs. the poorest owning only 1%. Financial assets of the richest 1% in the U.S. total $16.8 trillion, vs. our $13.8 GDP and total federal expenditures of $2.7 trillion.
Korten's recommendations: Full-cost market pricing (includes subsidies, pollution, injuries), assessing fees and prohibitions to make Wall Street theft and gambling less profitable (eg. outlaw selling, insuring, borrowing against assets one doesn't own, taxing trades), tax hedge fund earnings as ordinary income (not capital gains), rebuild the economy for greater self-reliance, make the U.S. wealth distribution more equitable, and require the Treasury Dept. to take over failed banks - not just loan them money.
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