Amazon Reviews
49 of 52 people found the following review to be helpful:
Visionary, February 4, 2009
By To Be Simple
"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.
22 of 24 people found the following review to be helpful:
Impressive!, February 12, 2009
By Loyd E. Eskildson
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.
36 of 42 people found the following review to be helpful:
Interesting, but fanciful, February 17, 2009
By J. Grattan
This book, by the author's admission, was hastily put together to provide commentary on the collapse of Wall St in the Fall of 2008 and the subsequent federal bailout and to advocate for a dramatic shift to a real wealth economy. It is indisputable that collectively Wall St created a massive financial asset bubble, or "phantom wealth," based on a huge pyramid of debt created by inter-firm lending and the selling of securities based on either nonexistent or questionable assets. Most can agree that it is simply unconscionable that the top fifty investment managers raked off fees of $30 billion in 2007 alone, as though their actions were entirely legitimate. It's hard to disagree that Wall St in its current operational mode is basically a criminal syndicate. But is the author's call for the elimination of Wall St, rather than propping it up and altering it, more fanciful than realistic?
The author provides no estimates of the costs to tens of millions of average people who have been forced to create retirement portfolios in 401k accounts if Wall St is shut down. He dismisses those writers and economists who advocate for the re-regulation of the financial sector, although he recognizes the benefits of regulation in the decade of the 1950s.
The author's mission is far more than to criticize Wall St. Following on his previous work; he decries the fact that corporations, in their new globalized form, have become so powerful that they literally shape our lives. Corporations pushed for so-called free-trade agreements, which in actuality was a means to hollow out our manufacturing base, while shipping millions of jobs overseas. It is corporations that fight against environmental regulations, preferring to pass the impact of their products and production on to the rest of us. It's not as though the citizens of this nation agree that those are beneficial developments.
But again, is this not a failure of regulation? Enforceable labor and environmental standards could have been a part of trade agreements. Mileage and emissions standards could have been set and enforced after the first oil crisis in 1975. The FDA could have the power to really protect us against harmful medications and contaminated food. Much of the power of corporations is political, achieved primarily through contributions and lobbying. However, the notion that a corporation is a "person" with political rights is totally absurd. Only real people should participate in a democracy, not artificial entities. Shutting corporations out of direct participation in the political process would have huge and immediate consequences.
The author essentially wants to break up huge corporations and return to a "real-wealth" economy where businesses are locally owned and operated. Real-wealth, in the author's way of thinking, "is a healthy, fulfilling life; healthy, happy children; loving families; and a caring community within a beautiful, healthy natural environment. It ... affirms our inherent worth and service. It is a peaceful world." A real-wealth economy is sustainable: resource depletion and environmental degradation are foremost concerns. Furthermore, such an economy and way of life are something that "we" all want.
However, the author makes no attempt to assess the existence of the social harmony and wisdom that would be required to drastically revamp our way of life. In fact, a strong case could be made for the diminishment of said characteristics over the last thirty years. The rise of the Republican greed society has occurred with the tacit approval of a huge portion of society, regardless of how that may be rationalized. It appears that the new President's room to maneuver in this environment is highly limited. How much change is really wanted?
The author has a "12-Point New Economy Agenda." A lot of it has appeal, but to enact any of it will require the political will and power of the general public. Instead of permitting corporations to essentially exist in perpetuity, their charters should be subject to revocation on clear indications of public disservice. We need to restore our economic sovereignty by rational trade policies. Workers should be empowered within firms to participate in decisions impacting them and the community, as well as the enterprise. Of course, the vast disparities in wealth and income need to be addressed if a real sense of community is to be achieved. Contrary to the author, Wall St and corporations, sufficiently regulated, can fit in an economy where citizens have the upper hand.
Certainly, most of us share in the author's alarm that our economic institutions, as well as a government controlled by those entities, are creating an unsustainable and unpleasant future for most of us. But this book, other than pointing out Wall St and corporate excesses and wishing for a more people-friendly future, provides no help in describing a path by which we can get from a society dominated by a self-interested, wealthy social layer to one where the average person can expect a life-enhancing future.
9 of 9 people found the following review to be helpful:
What we needed was an "actionary"; he gave us another take on "visionary"., April 11, 2009
By R. A. Letcher
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.
3 of 3 people found the following review to be helpful:
A terrific read, July 10, 2009
By Richard Clark
With our reflective consciousness, we humans are Creation's most daring experiment, says David Korten in this book. This gift of reflective consciousness is the source of our distinctive capacity to choose our future as an intentional collective act. However, for some 5,000 years we have, for the most part, used this capacity foolishly -- at an enormous cost to ourselves and to other living species. We must now take the step to a new level of species maturity and demonstrate our ability to act with collective wisdom and foresight. And we must begin this task by addressing the dysfunctions of a global economic system that increasingly values money more than life.
For all the societal and personal pain created by the recent financial collapse, it is in the larger view a blessing because it demonstrates so conclusively that the economy we had come to worship as an engine of perpetual wealth-creation was based on little more than fraud, delusion and self-deception. And now we have in this book the outlines of a path to a new economy.
Kortens basic message is that we can change the course of history by changing the `stories' (i.e. the assumptions and theories) that currently frame America's dominant culture. These currently prevailing `stories' celebrate the individualism, violence, greed linked to the pathologies of our collective human immaturity, while at the same time denying the potentials for community, love, and nurturing service that define the more mature aspects of human nature. The turning from domination by Empire community to a more democratically based Earth community depends on changing these stories through conversations that make public the transformative inner wisdom we possess as individuals. Institutional change will follow from that.
The root causes of our current socioeconomic crisis are three-fold.
1. Overconsumption: Growth in human consumption, resulting from a combination of population growth and growth in consumption per capita is depleting the natural life support system of the planet, disrupting natural water cycles and climate systems, thereby posing an ever greater threat to ever more Earths inhabitants, human and otherwise.
2. Inequality: An unconscionable and growing concentration of financial power, in a world of ever more intense competition (for a declining base of material wealth) is eroding the social fabric to the point of widespread social breakdown. Hence the growing number of children who die each year, the vast majority from easily preventable reasons.
3. Pathological Governing Institutions: The most powerful institutions on the planet, global financial markets and the transnational corporations that serve them, are institutions of an empire dedicated to growing consumption and ever larger measures of inequality. These institutions convert real capital into financial capital to increase the relative economic power of those who live by money, while at the same time depressing ever more the wages of those who produce real value through their labor. These same deadly institutions respond to environmental and social crises with palliatives that sidestep the need to reduce overall consumption and reallocate resources from rich to poor -- to do otherwise would be contrary to their legal and financial imperatives. So it is folly to expect the institutions that got us into the crisis to get us out of it.
Financial collapse is only about money and can be fixed over a few years. Social collapse is about the loss of relationships of trust and caring that are the essential fabric of a functioning community. These relationships can take generations, even centuries, to restore on a national or global scale. Environmental collapse is about Earth's life support system. This can take millions of years to restore, if ever.
In view of this, spending trillions of dollars in an effort to restore Wall Street to its original condition is a reckless waste of time and resources. The more intelligent course is to declare our independence from the predatory institutions of Wall Street, and put in place a new policy framework favoring Main Street businesses and workers engaged in the socially and environmentally responsible production of goods and services that directly and fundamentally meet our needs.
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