The Living Economies Challenge

David C. Korten
BALLE 101 Presentation - Denver May 2009 Version

This is my 7th BALLE conference. It gets better every year. My role in BALLE 101 is to provide the big picture overview of what BALLE is about. It’s an ambitious agenda. .

The work of BALLE is to bring into being an economy that supports the world of happy healthy children, families, communities, and natural systems most all the world’s people truly want. It has always been a good idea. Now it has become an imperative.

The day of reckoning for the self-destructive excesses of the global suicide economy has arrived. Climate chaos, the end of cheap oil, exhaustion of fresh water, species extinction, a falling U.S. dollar, and spreading social disintegration born of extreme inequality are real and immediate. These are the converging manifestations of a failed economic system and they are poised to impose a dramatic restructuring of every aspect of modern life.

Our situation can be summed up as a three fold crisis.  We are headed to environmental collapse because we are consuming environmental resources faster than Earth can regenerate them. We are headed to social collapse because of extreme and growing inequality. Our most powerful governing institutions, Wall Street corporations and financial institutions, are devoted to increasing inequality by encouraging ever increasing consumption to make money for people who already have far more money than they need.

The human future depends on bringing forth the institutions of a new economy devoted to decreasing consumption and increasing equity and serving the well-being and happiness of all. How is that for a challenge? We have to create a new economy from the bottom up based on different values and institutions. That is the work of BALLE.

A bit of historical context illuminates the epic significance of our work.

According to cultural historian Riane Eisler, the underlying dynamics of our current three fold crisis trace back some 5,000 years to the time when our ancestors put aside the more egalitarian and gender balanced ways of many of the earliest human societies and made a tragic turn from the partnership relations of Earth Community, symbolized here by the Stonehenge circle of life,  to the dominator relations of Empire, symbolized here by the Egyptian pyramids of power. Female gods were replaced by male gods. The masculine drove out the feminine and we humans lost our attachment to Earth.

Men took over to rule by bow and sword. The brutal competition for power created a relentless kill -or-be killed, rule-or-be-ruled dynamic of violence and oppression. Conquest became a measure of human greatness. Our societies became divided between the rulers and the ruled as relationships at all levels from those among states to those among family members came to be organized by dominator hierarchy.

Empires throughout history have invariably exhibited three characteristics.

First, they reduce the vast majority of humans to conditions of deprivation and servitude that deny their rights and suppress their creative potential.

Second, they expropriate the major portion of the resources available to human societies to support the military forces, prisons, palaces, temples, retainers and propagandists required to secure the interests of an elite class against the justified wrath of those who bear the burden.

Third, the institutions of Empire all too often elevate the most power hungry and ethically challenged among us to the highest positions of power. Perhaps some contemporary examples come to mind. I prepared this slide before the most recent election, but we clearly still have a problem on many fronts.

In any event, 5000 years is enough. It is time for a change.

Over the millennia, the primary institutional form of Empire has morphed from the imperial city-states of ancient time to the imperial nation-states of the modern era — and more recently to the imperial global corporations that now dominate so much of modern life in service to the insatiable demands of financial speculators. The primary institutions of Empire have changed, but the underlying pattern of domination, alienation, and exclusion remains the same.

People sometimes ask me, “Why are you so obsessed with corporations? After all, they’re just communities of people.” This argument misses a critical point. My concern is specifically with publicly traded corporations, in which money has more legal protections than people and nature, employees are required to leave their personal values at the door and subject to instant arbitrary dismissal, and decisions are expected to serve the short-term financial interests of wealthy absentee owners without regard to human or natural consequences.

Far from functioning as a community of people, the publicly traded, limited liability corporation is best understood as a gigantic pool of money with an artificial legal personality required by law to behave like a sociopath. It is a legal travesty of the first order.

The dream of bringing forth a new economy devoted to the service of life rather than the service of greed is no idle fantasy.  The institutional infrastructure of global corporate Empire is destined to be stressed to its limits by the mounting forces of a perfect economic storm born of a convergence of:

  • Peak oil
  • Global climate change, and a   
  • U.S. dollar meltdown.

Over the past 50 years we have created a wasteful, energy inefficient economy based on a cheap oil subsidy only to find that the era of cheap oil is now over and we must quickly convert to a high efficiency solar energy economy. Here are some implications.

Long haul transport and global supply chains, the backbone of the corporate global economy.  Finished. We must create local, short-supply-chain economies.

Auto dependent suburbia, strip malls, shopping centers, energy inefficient single family homes, and box stores like WalMart located in the middle of nowhere. We must retrofit our physical infrastructure to create compact communities with energy efficient multi-family dwellings.

Oil dependent corporate industrial agriculture.  We must restore our family farms, convert to biodynamic agriculture, and develop local independent food processing businesses.

As oil prices inexorably rise, much of our existing capital stock will be reduced to useless stranded assets, including much of the supporting infrastructure of our sprawling and unsustainable suburbs. Options for converting exiting automobiles to other power sources may be limited, although  this is one bio-fuel prototype currently under testing. Perhaps there is a business opportunity here.

The consequences of peak oil will be exacerbated by global warming.

According to a study commissioned by the U.S. Department of Defense we can expect:

  • Shorter growing seasons and a10-25% global loss of crop yield.
  • Water shortages.
  • Increase in forest fires, famine, disease, and severe weather events.
  • Endemic resource wars and uncontrolled migration.

The third element of the perfect economic storm, a meltdown of the U.S. dollar, is the consequence of a U.S. trade deficit that hovers around ¾ of a trillion dollars a year. The gap between what we import and what we export is a measure of the extent to which we in the United States are living beyond our own means, running up a credit card debt to the rest of the world, and leaving the bill to our children. It is also a measure of the rate at which we have been hemorrhaging both the family wage jobs that created the U.S. middle class and the manufacturing, technology, and research capabilities that go with those jobs. The bill is coming due.

The challenge before us is to turn this crisis into an opportunity for deep economic change. Here is the key.

Removal of the environmental and social subsidies that prop up the global suicide economy will bring the mother of all market corrections.  The communities with the best prospect to weather the storm will be those that act now to rebuild local supply chains, reverse the trend toward conversion of farm and forest lands, concentrate population in compact communities that bring home, work, and recreation in easy reach by foot, bicycle, and public transportation, support local, low input, family farms, and seek to become substantially self-reliant in food and energy.

Millions of people around the world are working to turn this imperative into an opportunity to rebuild functioning communities, restore a sense of place, democratize economic power, and radically revise our priorities for use of labor, land, and other natural resources to create societies that dramatically increase the quality of our lives even as the quantity of our consumption declines. BALLE is at the forefront of this important work.

Most humans, however, are held captive to the global suicide economy by a cultural trance induced by imperial economic stories constantly repeated in the echo chamber of corporate media.

According to the imperial economy story:  [VOICE] economic growth: fills our lives with limitless material abundance, lifts the poor from their misery, and creates the wealth needed to protect the environment. To improve the lives of all, the rational human course is to make returns to money the measure of every choice and relationship and free wealthy investors from taxes and regulations that limit their ability to accumulate the fortunes that allow them to invest in creating new jobs. The market allocates their investment to the uses that bring the greatest benefit to all. If a few get rich, celebrate their good fortune, because as the rich get richer, wealth trickles down and we all get richer.

Have you ever heard this story? Have you ever suspected it might not be entirely ture? I assure you it is not. We tried a 30 year plus experiment in testing this story in an extreme form. We are experiencing the results.

The economic challenge of our time is not to grow our economies, it is to reallocate our use of Earth’s available productive assets to reduce destructive uses, increase beneficial uses, and give priority to those most in need.

The potentials for beneficial reallocation are enormous. We can reallocate from military expenditures to health care and environmental rejuvenation. From automobiles to public transportation. From investing in suburban sprawl to investing in compact communities and reclaiming forest and agricultural land. From advertising to education. And from financial speculation to local entrepreneurship.

BALLE is creating a living economies story that contrasts with the imperial economy story on every point.

Our living economies story recognizes healthy children, families, communities and living systems as the true measure of economic performance and  mutual caring as the primary currency of healthy families and communities. We increase real wealth by investing resources in growing the social capital of caring relationships and the natural capital of healthy ecosystems. Markets have a vital role, but markets must have rules to secure community interests by internalizing costs, maintaining equity, and favoring human-scale local businesses that honor community values and serve community needs.

The discussions that led to the formation of BALLE converged on a consensus among the founders that to create economies that work for people and nature, we must move from absentee ownership to ownership rooted in community. From a few socially and environmentally responsible firms to the creation of whole economies comprised of interlinked socially and environmentally responsible firms. From maximizing profit for individual gain to maximizing community health and vitality for the benefit of everyone for generations to come.

In closing I urge every BALLE member to subscribe to YES! magazine, by and for people who are defining the new main stream. Our Summer 2009 issue, which has just come off the press is on Path to a New Economy and addresses may of the issues at the forefront of the new BALLE public policy agenda. You will find a copy in your conference packet. Visit yesmagazine.org. Subscribe. Also take a look at my new book Agenda for a New Economy.

In these turbulent and frightening times, it is important to remind ourselves that we are privileged to live at the most exciting moment of creative opportunity in the whole of the human experience. The future is in our hands. Now is the hour. We have the power to turn this world around. We are the ones we have been waiting for. Thank you.