David Korten
Midwifing the New Consciousness: Toward the Creation of Just and Sustainable Societies

David Korten is a former faculty member of Harvard University's graduate schools of business and public health, staff member of the Ford Foundation, and advisor to the United States Agency for International Development. After thirty years of field experience in Asia, Africa, and Latin America, Dr Korten is now president of The People-Centered Development Forum (PCDForum) in New York. He is the author of When Corporations Rule the World and Getting to the 21st Century: Voluntary Action and Global Agenda.

Orangutans - photo by Wolf Suschintzky
Orangutans Wolf Suschintzky
 The thirty years I spent working as a development expert in Africa, Latin America, and Asia left me very skeptical about the process we call development. I spent those years trying to bring the wonders of development to the poor of the Third World. On the one hand, I saw dramatic signs of economic progress - modern international airports, with well-stocked, duty-free shops, connected by four-lane highways to urban centers, with their five-star international hotels and air-conditioned shopping malls, all offering the latest in consumer electronics, designer clothing, luggage, and so forth. Yet life for the majority seemed to be getting continuously worse. Millions of people were being driven from their lands and communities into squalid urban slums where they worked long hours at such jobs as selling chewing gum and cigarettes to motorists at stop lights; young women sold into prostitution by desperate families; or living as virtual prisoners in dismal barracks next to the factories in which they worked for slave wages, producing consumer goods for First World consumption. Some left their families to become migrant workers, seeking miserable, low-paying jobs on the estates of global agribusiness corporations. Others were pushed into the uplands to eke out a living from subsistence agricultural plots on unstable soils. Strong and vibrant family- and community-oriented cultures were giving way to cultures of crime and violence. Once richly forested lands were being turned into moonscapes; once beautiful rivers were becoming stinking cesspools; once abundant fishing grounds were becoming underwater wastelands. I found myself asking, "Is this the development promise to which I have dedicated my life?" The more I questioned, the more disturbing the answers became. I found similar patterns unfolding in nearly every country of the world, including our own: increasing numbers of people living in desperate poverty, a growing gap between rich and poor, evidence of increasing environmental stress, and a disintegrating social fabric.

It seemed that something was badly wrong on a global scale and at a deeply systemic level. I turned my attention to the roots of the problem and arrived at a conclusion that I find both deeply frightening and at the same time profoundly hopeful. I believe we have reached a point in the long evolutionary journey of life where we are now both compelled and beckoned to take a bold step to a new consciousness, a new level of self-referencing in which we observe the course of our own evolutionary path, assess its implications, make choices, and take conscious, collective responsibility for setting its direction. I say "compelled" because failure to take this step may lead to our own extinction; I say "beckoned" because of the wondrous opportunities that are within our reach.

One of the most important and difficult challenges in this process will be to assume conscious responsibility for our economic lives by transforming an economic system that has become the enemy of life. For most of us our lives are very much divided between two worlds, the money world and the living world. It's important to understand how fundamentally different they are. I believe this distinction goes in many ways to the heart of our dilemma.

In the money world the measures of healthy function relate to GNP, stock prices, trade, investment, and tax receipts. It is where growth is the imperative - essentially money seeking money. The living world is fundamentally different. Here, measures of healthy function relate to balance, diversity, synergy, sufficiency, and regenerative vitality. Sustained growth in the living world is an indicator of system malfunction. The need is in the living world; the power is in the money world. And though we are of course creatures of the living world, the money world is flourishing. Shielded by wealth, the power holders of the money world have, up until now, been able to ignore the devastating consequences of their actions. But, in the end, the money world is purely an artificial construct of our own making. Life depends on the healthy function of the living world, so our fun-

needs of the living world - that's our bottom-line challenge.

Yet our public policies are almost totally focused on the acceleration of economic growth. Policy experts tell us this is the answer to all of our problems: to resolving poverty, to fixing the environment, to dealing with social breakdown, and so forth. Global economic output has increased from five to seven times since 1950. That's an enormous increase, but we have grown from a point at which the human economic subsystem was relatively inconsequential in its demands on the ecosystem to the point that its expansion has reached or exceeded the limits of the planet's regenerative capacity. We see this revealed in collapsing fisheries, in the many areas that are running into the limits on fresh water, in the evidence that we're altering the earth's climate in unpredictable ways, and in the depletion of the soils on which our food supplies depend. In fact, massive economic growth has given us a world in which roughly 1.2 billion people are unable to meet their absolutely most basic subsistence needs.

What happens when we continue to push economic growth in a full world? Two things. One, we accelerate the breakdown of its regenerative systems and, two, we intensify the competition between rich and poor for access to its resources. According to the UNDP, the top 20% of the world's population benefits from 82.7% of the total world income. The bottom 20% subsists on 1.4%. The world has 358 billionaires, who have a combined net worth that is roughly equal to the total annual income of the world's poorest 2.5 billion people, or nearly half of humanity.

We need a fundamental shift in our priorities and perspective on what economic activity is about. And that shift has to be in terms of the equitable distribution of the life-sustaining resources of the planet, to assure everyone the means of meeting their basic physical needs. Now, obviously we're not getting on with that agenda. We're constantly told by economists about how wonderful economic globalization is: the opportunities that it opens up, that it's the key to employment and to equality. Most of those claims are totally bogus.

However, an extraordinary thing happened on February 1 this year. There was an op-ed in the International Herald Tribune by Klaus Schwab, founder, and Claude Smadja, managing director of the World Economic Forum, a group of some three thousand top industrialists, politicians, and free-trade economists that meets every year in Davos, Switzerland, to talk about the wonders of the global economy. These are just a few of the points that they laid out in their op-ed:   Globalization is causing severe dislocation and social instability.   Technology is eliminating more jobs than it is creating.   Global competition leads to winner-take-all situations.   Globalization tends to delink the fate of the corporation from the fate of its employees: higher profits no longer mean more job security and better wages. And they conclude that the backlash could turn into open political revolt that could destabilize the western democracies.

Now that's pretty heavy stuff from advocates of economic globalization. Of course, the solutions in their op-ed are that we need more retraining - a standard solution - and must work harder at convincing people that this is going to be good for them. Retraining does nothing to increase the number of jobs; it simply increases the skills in the labor pool so that corporations can bid down wages.

Since the Soviet Union collapsed, we've been told that a globalized unregulated market is the only solution for the world. But during the greatest periods of economic success in the United States - the period in which our middle class developed - we did not have a free-market economy. We had a system that I would characterize as democratic pluralism, with a balance between the forces of state,

market, and civil society. The idea of balancing power is fundamental to the concept of pluralism. It's very different from a state-controlled economy, with its unaccountable state power, but it's also very different from the unregulated globalized free-market economy, which actually leads to a concentration of unaccountable corporate power. There are lots of alternatives to either a state-planned economy or a totally free-market economy. One of the things I learned in economics at business school - so this is not Marxist economics, this is good, solid, capitalist economics - was that market economies tend to self-destruct if they don't operate within a regulatory framework. For one thing, the winners keep getting bigger, more consolidated, until a point is reached where the market economy no longer exists - what you have is a corporate-managed economy. And of course that's what we're getting into now.

It's instructive to realize that of the hundred largest economies in the world, fifty of those are economies internal to corporations. An economy internal to a corporation is not a free-market economy. There may be a good deal of decentralization, but, as we're seeing demonstrated repeatedly, the power itself resides at the very top. People and communities affected have absolutely no participation or recourse in decisions about who works, who's fired, what plants are open, what plants are moved, what plants are closed. That is not democratic. That is not a free market. It is a centrally-planned corporate economy. And, meanwhile, we see more and more mergers. Last year the total value of mergers in the world was 25% higher than in any other previous year in history. This process of consolidation is moving us ever closer to a seamless web of corporate control at the center.

There's a fundamental power shift going on here. We get confused by the terminology of the market economy. The free marketers always insist upon a link between democracy and the market. Opening the free market is supposedly part of the process of establishing democratic rule. Market democracy can indeed work when enterprises are small and local, when you have an economic system and its enterprises embedded in a system of community values and relationships, where the consumer truly has the ability to make real choices, not defined by the biggest corporations, but defined by their own tastes and needs. People can have sovereign control over the economic system through their purchasing power, through their elected representatives in government (through whom they make the rules under which the enterprises function), and through their role as investors in local companies where they have a direct relationship to the firm.

But as we move through the processes of deregulation and globalization of the economy, we're essentially removing economic borders and allowing corporations and corporate power to extend out beyond the borders of national accountability. As we witness this process of ever greater corporate concentration, we move toward what is most accurately described as a market tyranny. Now, while the actual corporations do not have hegemony, the global financial system does - for the global corporations are accountable to this system. Ultimately this leads to a whole inversion: Rather than being accountable to people, global corporations use their political power to buy out our politicians and rewrite the rules of the economic game in their favor. Similarly, they use their power over the media to manipulate the cultural symbols by which we define who we are and what our values are. And the people are just left down at the bottom as pawns of this system.

This global financial system is best described as a global casino. It has essentially created a system of governance by and for money. Understanding the dynamics of this, it's important to recognize what's happened over the past twenty or thirty years to the way we invest. It used to be that if you held a few shares of stock, you usually owned shares in an actual company. It's much more common now that our equity investments - though only a very small percentage of our population does in fact now have equity investments - are through mutual funds, or an interest in retirement funds. That's a very important structural shift. I remember when I was a kid, you invested in AT&T stock and it paid a 7% dividend and you kept it forever. That was your security. Now things have changed a great deal. Professionally managed funds are basically evaluated on day to day performance. Even the newspapers report the percentage change in each mutual fund between today and yesterday. In 1995 the average equity mutual fund returned 24.2%. The top twenty-five funds were returning 50%. Imagine trying to get those kinds of returns in a year investing in real productive capacity. If you're a fund manager, you're sitting behind your computer terminal, and what you're doing is betting on the short-term movements of prices. These guys are literally sitting there with their finger on a button: if there's good or bad news about a company, the first guy to push the button wins.

The whole money system has evolved to the point where most of the monetary transactions in the world are circulating purely within the world of finance - totally unrelated to any exchange of productive goods and services. It's estimated that approximately $1.4 trillion passes through the world's currency markets every day, totally unrelated to real goods and services. Of the money that goes through the currency markets, only about 2.5% of it actually relates to transactions involving real things. Overall it's estimated that some twenty to fifty dollars circulate in the economy of pure finance for every dollar that is spent on the kinds of transactions that you and I make in the daily course of our lives.

In looking at accountability to this global casino, it's very important to understand the nature of the corporation as a legal entity. Basically, it's an institutional form for concentrating power, limiting the liability of those who use the power, and using that power to increase shareholder gain. In the global economy, which functions largely beyond the reach of government, the only corporate accountability is to the financial market.

Currently the five hundred largest corporations employ 1/20 of 1% of the world's people yet they control 25% of world output and 70% of trade. From 1980 to 1993 the Fortune 500 companies shed 4.4 million jobs; their sales increased 1.4 times; assets, 2.3 times; and CEO compensations, 6.1 times. For the world, five firms control more than 50% of the global market in seven major industries.

This concentration of economic power goes right along with the increasing gap between rich and poor. The basic corporate goal that we see being manifested is to reduce to the maximum extent possible actual responsibility for people - numbers of employees - while consolidating control over markets, trade names, technology, and money. The basic process is one of privatizing gains and socializing costs.

The message from the financial markets to the corporate managers, who are also trapped in the system and have very limited freedom in the choices they make, is that if they start trying to respond to real social needs, try to provide stable employment, try to really take environmental issues seriously, they're going to get kicked out - we've got lots of examples of that. So the market's saying, go for maximum short-term shareholder gains or get out. Downsize, shed responsibility for people, bid down wages and benefits, use jobs to hold people and governments hostage to the threat of moving elsewhere, and invest in politicians to buy subsidies and regulatory relief.

"Chainsaw Al" Dunlap has been getting a lot of press lately. He was the head of Scott Paper Company for a little less than two years, during which time he eliminated eleven thousand jobs, cut spending on research in half, eliminated all corporate gifts to charities, and ordered managers not to involve themselves in community volunteer work. The markets loved it! The value of Scott shares rose 225%, and Dunlap was rewarded with nearly $100 million in salary bonuses, stock gains, and other perks.

I see nothing in this system that leads toward self-correction. The only conceivable corrective mechanism is for us as citizens, including those citizens who work within these corporations and financial systems, to recognize that where the system is headed is not where anyone in their right mind would want to go.

Let us now see how some of this connects to our concern with spiritual development. One of the burning questions in my mind when I was writing When Corporations Rule the World came out of a realization that the money world is literally consuming our lives and the life of the earth. In the movie The Blob, the blob grew by flowing out and consuming anything that was alive - that's how money functions in our present economy. We're all being consumed by the blob. Now the curious thing about this is, when you stop and think about it, money really isn't anything. It is one of the most substanceless artifacts that we have in modern civilization. It's nothing but a number. Sometimes we put it on a piece of paper, but now that most of those numbers are in computers, they're just electronic traces. We talk about capital movements from the United States to Mexico or to wherever as if something of substance was involved. The only thing that's happening is a number moving from one computer account to another. Capital? Nonsense: electrons. What is it that gives this totally substanceless artifact such power over our lives? Well, the answer in fact is fairly straightforward. The energy that gives money its power over us is nothing more than our own misplaced life energy. We yield this power to money through a cyclical process that locks us into a deepening downward spiral of alienation from our own spiritual values. To reclaim our lives we must reclaim the power we have yielded to money and the institutions of money.

Here's how it works. First of all we trade our life energies for money to the neglect of our spiritual, family, and community life. That results in a certain degree of alienation. Then because we gave up our life energy to get money, money in due course becomes almost a symbol of our life energy. The deepening alienation that results then becomes the tool or the weapon that the advertisers use against us by assuring us their products will make us whole again. We're not buying laundry soap, we're buying self-esteem and pride; we don't buy cars, we buy power, social acceptance. But buying their product requires money, so we get caught in the cycle - increasingly dehumanized, entrapped in the money world, and increasingly losing our sense of spiritual connection. Fundamental to any transformation is the rediscovery of what is really important to us. It's the difference between consuming to live and living to consume.

We are being called to become whole persons by reconnecting the material and the spiritual aspects of our nature. We're coming to see that voluntary simplicity is not only a necessary path to saving the earth, it is also our path to spiritual liberation.

The Institute of Noetic Sciences, together with the Fetzer Institute, recently commissioned pollster Paul Ray to do a survey assessing the emergence of the new integral culture. It confirms that indeed a new culture exists within our midst. The study essentially divides the US population into three major groups.

One group is composed of the modernists. These are the folks who really buy into the system that I've described. Modernism is defined by materialism and industrialization: the greed culture. Ray estimates that there are roughly 88 million adults in the United States who align with this culture and embrace it in one way or another. That's roughly 47% of the adult population. Their segment over time has been relatively static or declining. He also noticed that there's a very interesting segment among the modernists, which he calls the alienated modernists. Now one could argue whether you should really call these folks modernists, because in fact they are rejecting modernism, though they have not found an alternative - so they simply rail against modernism with a sense of angry rejection - and that's about 15% of the adult population.

Then we have the heartlanders, the traditionalists, who are very often aligned with fundamentalist beliefs, and who do have their own positive vision, that of returning to a simpler past, embedded in fundamentalist religious values. That group constitutes 55.6 million people, 29.6% of the adult US population. It tends to be relatively older than the other groups and is not being replaced, so it is gradually dying off.

Of particular interest to us is the third group, which Ray refers to as the cultural creatives. These are the people who are engaged in the process of creating a new integral culture, creating the new consciousness. He refers to this group as the transmodernists. Only one generation ago, pollsters weren't even able to identify this group. We didn't exist. We're now 23.5% of the adult population, and growing. Ray notes we do not constitute a represented political constituency, partly because we have not discovered ourselves, and we certainly haven't been discovered by the politicians, as you may have noticed. Now, one of our challenges is to form ourselves into a coherent intellectual and political movement aimed at cultural integration at many levels. At the level of self-integration and authenticity. At the level of integration of our inner selves with community, with others around the globe, and with nature. At the level of integration of ecology and economy, and the reconciliation of science and spirituality. The emergence of this culture features the creation of a holistic mind-body medicine. It also features the ascendance of feminine values, caring relationships, and women's issues relating to family and community. We are beginning to discover one another. It is time to transform ourselves into a meaningful cultural and political movement.

We're told that the globalization of the economy is inevitable. In fact, the unregulated global economy and the global competition that is part and parcel of it are not outcomes of immutable historical forces. They were created through conscious human choices, through an agenda, by the way, that has moved ahead as a conscious process by a small elite with very little public discourse.

Just as we have created our existing economic system, that system can be changed in the same way - through human choice. Furthermore, it's important to recognize that contrary to the propaganda, there is nothing particularly just or desirable about a global economy and global competition. To the contrary: they are socially inefficient, encourage exploitation, and exacerbate inequality. This is not a call to close our borders, but it's a call to help all people everywhere regain their economic power by rooting it in community, so that as people in communities we can cooperate with one another throughout the world to provide a better life for everyone, instead of competing to the death for the last remaining job.

Corporations, governments, and money have only the power we choose to yield to them. We have both the right and the ability to reclaim that power. As we have created a global economy delinked from people and community, we can just as well create a system of local economies embedded in community values and relationships. If we want a compassionate society, we must have an economic system that rewards compassionate behavior. It is time to engage in a restructuring that brings our economic systems into line with more meaningful values. We will need to act on many fronts as we build a policy agenda for our political movement. For example, we must make full employment and job security economic policy priorities. We will need to restructure finance to penalize speculation, reward productive investment, and root the ownership of productive assets in people and communities. We will need to reclaim the corporate charter, break up monopolies, get big money out of politics, and create a policy bias in favor of small, local enterprises. These are all steps towards subordinating the money world to the imperatives of the living world and the values of the emerging culture.

I know from direct experience the misery that grips many Third World countries. We are now seeing the same patterns in our own country, and they are no longer patterns based on ethnicity. As the middle class is eroded, these patterns are enveloping everybody. We're seeing the industrial era in its last dying stages, because it's reaching the limits of exploitation. I used to think of this in terms of the transformation of the existing system into a new system, but now I am thinking of it a little bit differently. Basically that old system of mega-institutions of concentrated power and exploitation needs to die away.

At the same time we recognize the seeds of a newly emerging civilization and consciousness sprouting up in communities and community initiatives. And again this is part of what's so impressive about being able to move around internationally and see how universal and dynamic this process is. People everywhere are searching to rediscover community, to rediscover their spiritual roots, to recreate their local economies, to regenerate their local ecosystems. And it's creating whole new sets of relationships that are based on cooperation, on sharing, on compassion. I would say that our present task is two-fold. One is to perform hospice services for the old civilization, so that it may pass gracefully on, while performing midwifing services for the birth of the new. That's our task.