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capitalism run amuck by Korton
this guy is really brilliant. the essay is brillant.
the pro-capitalist elements here should read this
very carefully and read his book. very well researched.
impeccable credentials. the real "truth behind the
scenes and events" of what's going on in the world
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Date: Thu, 22 Oct 1998 08:04:39 +0000
To: [email protected]
From: Paul Swann <[email protected]>
Subject: Your Mortal Enemy
Your Mortal Enemy
Faceless bankers now move two trillion dollars around the world every day,
searching for quick profits, breaking national economies and putting ever
more pressure on natural wealth. What's to be done? Slay the beast of
capitalism, says David C Korten, and return money to its proper role.
An edited and ammended extract of David Korten's Schumacher Lecture in
Bristol on October 17 1998.
Published in The Guardian, October 21 1998.
For those of us who grew up believing capitalism is the foundation of
democracy, market freedom, and the good life it has been a rude awakening
to realise that under capitalism, democracy is now for sale to the highest
bidder, the market is centrally planned by global mega-corporations larger
than most countries, denying one's brothers and sisters a source of
livelihood is now rewarded as an economic virtue, and the destruction of
nature and life to make money for the already rich is treated as progress.
The world is now ruled by a global financial casino staffed by faceless
bankers and hedge fund speculators who operate with a herd mentality in the
shadowy world of global finance. Each day they move more than two trillion
dollars around the world in search of quick profits and safe havens sending
exchange rates and stock markets into wild gyrations wholly unrelated to
any underlying economic reality.
With abandon they make and break national economies, buy and sell
corporations, and hold the most powerful politicians hostage to their
interests. When their bets pay off they claim the winnings as their own.
When they lose, they run to governments and public institutions to protect
them against loss with pronouncements about how the poor must tighten their
belts and become more fiscally prudent.
In the United States, the media keep the public preoccupied with the
details of our president's sex life and calls for his impeachment for lying
about an inconsequential affair. Meanwhile, Congress and the president are
working out of view to push through funding increases for the IMF to bail
out the banks who put the entire global financial system at risk with
They are advancing financial deregulation to encourage even more reckless
financial speculation. And they are negotiating international agreements
such as the Multilateral Agreement on Investment intended to make the world
safe for financial speculators by preventing governments from intervening
to regulate their activities.
To understand what is happening we must educate ourselves about the nature
of money and the ways of those who decide who will have access to it and
who will not.
As a medium of exchange, money is one of the most useful of human
inventions. But as we become ever more dependent on it to acquire the basic
means of our sustenance, we give to the institutions and people who control
its creation and allocation the power to decide whether we shall live in
prosperity or destitution.
With the increasing breakdown of community and governmental social safety
nets, our money system has become the most effective instrument of social
control and extraction ever devised. The fact that few of us think of the
money system as an instrument of control makes it more powerful and
efficient as an instrument of wealth extraction.
What of capitalism, the self-proclaimed champion of democracy, market
freedom, peace and prosperity? Modern capitalism involves a concentration
of wealth by the few to the exclusion of the many; it is more than a system
of human elites. It has evolved into a system of autonomous rule by money
and for money that functions on autopilot beyond the control of any human
actor or responsiveness to any human sensibility.
Contrary to its claims, capitalism is showing itself to be the mortal enemy
of democracy and the market. Its relationship to democracy and the market
economy is now much the same as the relationship of a cancer to the body
whose life energy it expropriates.
Cancer is a pathology that occurs when an otherwise healthy cell forgets
that it is a part of the body and begins to pursue its own unlimited growth
without regard to the consequences for the whole. The growth of the
cancerous cell deprives the healthy cells of nourishment and ultimately
kills both the body and itself. Capitalism does much the same to the
societies it infests.
One reason we fail to recognise the seriousness of our predicament is
because we fail to see how capitalism is destroying the world's real
wealth. It destroys social capital when it breaks up unions, bids down
wages, and treats workers as expendable commodoties, leaving society to
absorb the family and community breakdown and violence that are inevitable
consequences. It destroys institutional capital when it undermines the
function of governments and democracy by weakening environmental health and
labour standards, and extracting public subsidies, bailouts and tax
exemptions which inflate corporate profits while passing the burdens of
risk to governments and the working poor.
We arejust beginning to wake up to the fact that the industrial era has in
a mere century consumed a consequential portion of the natural capital it
took evolution millions of years to create. It is now drawing down our
social, institutional and human capital as well.
Democracy and markets are wonderful ways of organising the political and
economic life of a society to allocate resources fairly and efficiently
while securing the freedom and sovereignty of the individual. But modern
capitalism is about using money to make money for people who already have
more of it than they need. Its institutions breed inequality, exclusion,
environmental destruction, social irresponsibility and economic instability
while homogenizing cultures, weakening institutions of democracy and
eroding the moral and social fabric of society.
Though capitalism cloaks itself in the rhetoric of democracy and the
market, it is dedicated to the principle that sovereignty properly resides
not in the person, but rather in money and property. Under democracy and
the market, the people rule. Under capitalism, money rules.
The challenge is to replace the global capitalist economy with a properly
regulated and locally rooted market economy that invests in the
regeneration of living capital, increases net beneficial economic output,
distributes that output justly and equitably to meet the basic needs of
everyone, strengthens the institutions of democracy and the market, and
returns money to its proper role as the servant of productive activity.
It should favour smaller local enterprise over global corporations,
encourage local ownership, penalise financial speculation, and give
priority to meeting the basic needs of the many over providing luxuries and
diversions for the wealthy few. In most aspects it should do exactly the
opposite of what the global capitalist economy is doing.
Most of the responsibility and initiative must come from local and national
levels. Supporting nations and localities in this task should become the
core agenda of the United Nations, as the protection of people and
communities from predatory global corporations and finance is arguably the
central security issue of our time.
The first positive step would be to dismantle the World Trade Organisation
on the ground that there is no legitimate need for a global police force to
protect global corporations from the actions of democratically-elected
national and local governments so that the richest one per cent of humanity
can become even richer at the expense of the rest.
The WTO is a powerful, but illegitimate and democratically unaccountable
institution put in place through largely secret negotiations with little or
no public debate to serve purposes largely conltrary to the public
interest. The 99 percent of the world's people whose interests it does not
serve have every right to eliminate it.
Addressing the real need to police the global economy requires an
organisation very different from the WTO - an open and democratic
organisation with the mandate and power to set and enforce rules holding
those corporations that operate across national borders democratically
accountable to the people and priorities of the nations where they operate.
It should as well have the power to regulate and tax international
financial flows and institutions. And it should have a mandate to make
speculation unprofitable and to help protect the integrity of domestic
financial institutions from the financial markets and the predatory
practices of international financial speculators.
There are obvious questions as to whether such proposals are politically
feasible given the stranglehold of corporations and big money over our
political processes. Yet we could use this same reasoning to conclude that
human survival itself is not politically feasible.
Global corporations and financial institutions are our collective
creations. And we have both the right and the means to change or replace
them if they do not serve.
Dr David Korten is president of the People-Centered Development Forum
in Washington State, USA <http://iisd1.iisd.ca/pcdf> and the author of
'When Corporations Rule the World' and the forthcoming 'The Post-Corporate
World: Life After Capitalism'.
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