Economies of Meaning
David C. Korten

Tikkun Magazine
March- April 1996

David C. Korten is the author of When Corporations Rule the World , from which this essay is drawn, and founder and president of the People-Centered Development Forum.

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he politics of meaning poses a challenging question: What would be the characteristics of an economy that both meets our material needs and serves to create the ethos of caring relationships and of ethical, spiritual, and ecological sensitivity essential to life in a good society? If we take this to be a two-fold performance test of the good economy, then it is evident that our existing economy is serving us poorly.

There is little room for ethical, spiritual, and ecological sensitivity in a global economy that defines success purely in terms of the financial bottom line, creates a growing gap between its winners and losers, and provides fabulous financial rewards to those willing to sacrifice long-term human and environmental interests for short-term financial gain.

Leading proponents of the new global economy such as Rosabeth Kanter, Harvard Business School professor and author of the business best-seller, World Class, counsel that in the global economy financial success belongs to those who are willing to sacrifice loyalty to community and nation in the pursuit of personal economic opportunity. The March 25, 1995 issue of Fortune advises young graduates to approach every job as though they are self-employed, because success will come to those who look out for number one, always using one's present job to open better opportunities with other employers.

It is abundantly clear: In the global free-market economy, caring, loyalty, and moderation are out. Individual self-interest, materialism, and opportunism are in.

Since the disintegration of the Soviet Empire in 1989, countries nearly everywhere have joined in an uncritical embrace of market-driven economic growth based on deregulating markets, privatizing public assets, scaling back social programs, and removing barriers to the free international flow of goods and finance. Political parties from across the political spectrum have converged on a commitment to variations of this agenda, leaving those who question the underlying assumptions or the moral implications with few political alternatives.

n spite of its claims to firm theoretical and empirical foundations, the neoliberal economic policy agenda is best described as an ideology of corporate libertarianism based on the perpetuation of myths deeply embedded in our political culture and an embrace of social dysfunction as the foundation of a perverse moral philosophy. It is useful to examine a few of the more central of these myths. For example:

The myth that growth in aggregate economic output is a valid measure of human well-being and progress.
To the contrary, the indicators of aggregate economic output by which economic policy managers evaluate their performance tell us nothing about the social utility of that output. Expanded use of cigarettes and alcohol increases economic output both as a direct consequence of their consumption and because of the related increase in health-care needs. The need to clean up oil spills increases economic activity. Gun sales to minors generate economic activity. A divorce generates both lawyers fees and the need to buy or rent and outfit a new home, increasing real estate brokerage fees and retail sales. It is now well documented that in the United States and a number of other countries the quality of living of ordinary people has been declining as aggregate economic output increases.

The myth that technology frees us from environmental restraints on economic growth.
While technology in some instances allows us to use ecosystem resources more efficiently, there is a strong historical relationship between growth in economic output and growing human demands on the earth's finite ecosystem. Furthermore, a five-fold increase in the world's economic output since 1950 has now pushed the human burden on the planet's regenerative systems, its soils, air, water, fisheries, and forestry systems beyond what the planet can sustain. Continuing to press for economic growth beyond the planet's sustainable limits accelerates the rate of breakdown of those systems, as we see so dramatically demonstrated in the case of many ocean fisheries, and intensifies the competition between rich and poor for the earth's remaining Output of life-sustaining resources.

The myth that an open and unregulated "free" market is the fairest and most efficient way to allocate society's resources and is the foundation of human freedom and democratic citizen sovereignty.
Market economies are highly responsive to the wants of those who have money. They are blind to the needs of those who have no money. In contrast to political democracy, which is based on one person, one vote, economic democracy is about one dollar, one vote. Under conditions of relative economic equality, the market mechanism has an important role in the fair, efficient, and democratic allocation of resources. Under the conditions of extreme inequality that presently prevail, an unfettered market allocates resources in ways that are grossly unfair, inefficient, and undemocratic. Contrary to the rhetoric of ideologues from both Right and Left, markets are neither inherently good nor inherently bad. It is a question of the conditions under which a particular market functions.

The myth that the only alternative to a free market economy is a state-planned, command economy.
Our own history is one of many sources of alternative examples. During the post-World War II period, in which a large and prosperous middle class was a defining feature of the Western industrial nations, the market functioned within a framework of rules set through a democratic public process. The institutions of government, market, and civil society functioned in a reasonable pluralistic balance. A combination of deregulation and globalization have freed the market and destroyed this balance, rapidly eroding the conditions on which efficient market function depends. For example, in the absence of government intervention, successful competitors gain ever greater monopolistic advantage through their accumulation of economic and political power. Now the competitive market economy is being steadily replaced by a centrally planned global economy managed by an ever more tightly integrated alliance of global corporations.

The related myths that trade agreements are about trade, that open economic borders are universally beneficial, and that economic globalization is a consequence of immutable historical forces.
The truth is that most trade agreements - such as NAFTA, GATT, and the European Maastricht Treaty -- are really economic integration agreements intended to guarantee the rights of global corporations to move both goods and investments wherever they wish, free from public interference and accountability. Greater rights for global corporations inevitably mean fewer rights for ordinary citizens to set the rules by which their own local and national economies will function. The trend toward ever greater global economic integration is inevitable only so long as we allow the world's largest corporations to buy our politicians and write our laws.

The myth that global corporations are benevolent institutions that, once freed from governmental interference, will provide local prosperity, jobs, and a clean environment for all.
In reality, the institution of the corporation was invented to concentrate control over economic resources while shielding those who hold the resulting power from personal accountability for the public consequences of its use. In a globalized, deregulated market, the only legal public accountability of corporate management in the use of their power is to a global financial market that has one incessant demand: Maximize short-term returns to shareholders. This puts enormous pressures on management to take advantage of every available opportunity to pass the costs of proauction onto the community by lowering wages and working conditions, obtaining government subsidies and tax breaks, and cutting corners on environmental protection. Gains are privatized to the benefit of the power-holders. Costs are socialized by passing them to those who have no political or economic voice.
hese myths of our political culture are buttressed by a number of moral premises embedded in the corporate libertarian ideology that serves as the foundation for most neoliberal economic theory. These moral premises may be summarized as follows:
  • People are by nature motivated primarily by greed.
  • The drive to acquire material wealth is the highest expression of what it means to be human.
  • The relentless pursuit of greed and acquisition leads to socially optimal outcomes.
  • It is in the best interest of human societies to encourage, honor, and reward these values.
While most economists would not state these premises in such stark terms, this is the essence of the value assumptions underlying most contemporary market theory. Unfortunately, economic policies driven by these deeply flawed moral premises create a self-fulfilling prophecy by rewarding dysfunctional behaviors deeply detrimental to the healthy function of human societies, as we now see demonstrated all around us.

Our development models -- and their underlying myths and values -- are artifacts of the ideas and institutions of the industrial era. The corporation and the modern state have been cornerstones of that era, concentrating massive economic resources in a small number of centrally controlled institutions. They have brought the full power of capital-intensive technologies to bear in exploiting the world's natural and human resources so that a small minority of the world's people could consume far more than their rightful share of the world's real wealth.

Economic globalization has served to advance this exploitation of the earth's social and environmental systems beyond their limits of tolerance, by freeing errant corporations from restraints to their growth, their ability to monopolize ever larger markets, and the use of their economic power to win political concessions that allow them to pass on to the community ever more of the costs of their production. It has delinked corporations and financial markets from accountability to any public jurisdiction or interest, contributed to a massive concentration of financial power, and richly rewarded those who place the values of acquisition, competition, and self-interest ahead of values of simplicity, cooperation, and sharing.

We are not limited to choosing between markets or governments as the instruments of our exploitation. Nor is there need to eliminate markets, trade, private ownership, the state, or even the institution of the corporation. Rather, it is a matter of creating a new architecture for each of these institutions appropriate to the values we believe a good society should embody and nurture. This creative task belongs neither to corporations nor to states, which are incapable of questioning the assumptions on which the legitimacy of their present institutional form is based. It belongs to citizens-to the people whose interests and values the new architecture is intended to serve. It is people rather than corporations or other big-money interests that appropriately set the terms of the economic and political agenda.

itizen groups throughout the world are already actively engaged in the experimental creation of economies of meaning aligned with life-affirming values. Powerful formative ideas are emerging from these initiatives. For example, millions of people in the voluntary simplicity movement are discovering that good living is more fulfilling than endless accumulation and consumption. In a healthy society, a life of material sufficiency and social, cultural, intellectual, and spiritual abundance can readily be sustained in balance with the environment.

Others are learning that there are alternatives to a global economy that inherently fosters inequality and global competition among local people and communities. They are demonstrating such possibilities by building strong, self-reliant, local economies that root resource management and ownership in democratically governed communities and recognize that all people have an inherent right of access to a basic means of creating a livelihood. Such economies are an essential foundation of healthy societies able to engage in cooperative and caring exchanges with their neighbors.

These are lessons with profound implications for a politics of meaning. In large measure, societies express and sustain their cultural values through their choice of economic structures. The fact that our present economic system values and rewards greed, gluttony, and disregard for the needs of others didn't just happen. It is a consequence of conscious acts of choice-poorly informed though they may be. It is equally within our means to create a globalized system of localized economies that thrive on life-affirming values of sufficiency, caring, cooperation, and reverence for life. It is a matter of adequately informed collective political choice.

Yet our existing political formations, no matter where they are positioned on the traditional Left-Right spectrum, reveal no awareness of even the possibility of replacing an economy of meanness with economies of meaning. That is one of many compelling reasons why we need a new political movement in the United States that is not defined by traditional Left-Right values and agendas. The politics of meaning movement is engaging this task. I believe that building public awareness of the potential to create economies of meaning and putting forward a policy agenda that advances this outcome must receive high priority on the movement's agenda.