cj#1047,rn> David C. Korten: AFTER SEATTLE?

2000-01-01

Richard Moore

Dear friends,

We survived y2k!  Now that we know nothing much happened, it
all seems silly.  But who really knew for sure??

I normally hate TV but I must say the coverage of all the
celebrations brought tears to my eyes.  Everyone connected,
everyone there at the same time, everyone appreciating the
Eiffel Tower, and indigenous dances, and all the rest.
Inspiring.  How peaceful and harmonious the world should
rightfully be!  What diabolical machinations our "leaders"
go to in order to create warfare and strife!  I wish there
was a "Matrix" we could send them all to where they could be
happy ruling a make-believe world.  Then the rest of us
could have a happy and real world.

---

H. Springer (see message below) has begun to collect cj
postings online.  His website is MUCH more convenient that
our own list archives for looking over what has been posted.
 Note that I've added his archive web address to the
standard list signature.  Many thanks for his efforts!  You
may also want to check out his main home page:
    http://www.members.home.net/h-springer/

---

I admire David Korten and am happy to post his speech
(second message below).  But he just doesn't get it
re/capitalism.  He seems to think corporations can be
influenced to be benign and that capitalism can be regulated
into being accountable.  He hasn't done the numbers - it
just doesn't compute!  Reforming capitalism is like
reforming cancer.  The answer in both cases can only be
surgery and removal.

And as you all know, this does not mean violent revolution.
Korten is right when he says democracy is the answer.  But
his notion of democracy, and what it should aim for, is
insufficiently radical.  If anyone knows his address, they
might forward this, just in case he might read it.

---

I've received some excellent feedback on my article draft.
More would be appreciated!  A revised closing section will
be posted soon.

all the best,
& love,
richard


============================================================================
From: •••@••.•••
Date: 29 Dec 1999 20:51:33 -0800
Mime-Version: 1.0
To: •••@••.•••
Subject: Re: into it's individual letters and documents

hello Richard,

I have started to archive the last two months worth of
emails at:

    http://members.xoom.com/centrexnews/

and will continue to archive them. This will be the
permanent home for cyberjournal's email archive and can also
easily be linked to.

I'm also toying with the idea of adding a site specific
search engine later on.

cheers, and a happy new year

H. Springer

*** Thank you for visiting CentrEx Alternative News
     http://www.members.home.net/h-springer/   ***

============================================================================
Date: Thu, 30 Dec 1999 11:25:13 -0700
From: Winston Weeks <•••@••.•••>
To: "Richard K. Moore" <•••@••.•••>
Subject: ....AFTER SEATTLE? By David Korten

Reprinted with permission. From YES! A Journal of Positive
Futures, P.O. Box 10818, Bainbridge Island, WA 98110.
Subscriptions $24/year. 206/842-0216 or 800/937-4451; Fax:
206/842-5208; Email: •••@••.•••; Web: www.futurenet.org

SPEECH GIVEN DECEMBER 3, 1999 AT WTO EVENT BY DAVID
KORTEN

....
------------------------------------------------------------------
The following is part of a series of commentaries by people
associated with YES! magazine and Positive Futures Network on
the events unfolding in Seattle at the time of the World Trade
Organization's meeting.

Taking on the Corporate and Financial Rulers: Our Goal is
Political and Economic Democracy
--------------------------------------------
Gethsemane Lutheran Church,
199 Stewart Street, Seattle
Friday, December 3, 1999
- WTO Week

by David C. Korten

Despite the scattered violence that has captured so much
media attention, for the majority of peple in the streets, this
week has been one of the most remarkably inclusive and
hopefully significant acts of love, compassion, and solidarity in
human history. The new union forged between working people
and environmentalists is surely of historic significance.

I have great admiration for the courage of the young people who
acted here with well-informed commitment, putting their lives
and liberty on the line in deeply meaningful and effective acts of
nonviolent civil disobedience to assure that our message would
finally be heard by those who have closed their eyes, their ears,
and their minds to the reality of a world in deep pain. My heart
goes out to all of you who have made it happen. We now have a
critical opening in the long struggle to create a world that works
for all. And we must use it wisely.

As I have only a few minutes let's get immediately to the heart
of today's subject.

Of all the many important issues discussed in Seattle this
week, in my mind the most fundamental is democracy. Who will
make the rules by which we will live? Will it be people -- through
the exercise of their birth rights as persons and citizens? Or will
it be the institutions of the global economy -- global financial
markets and corporations?

In very practical terms, will we adapt ourselves to the system of
global financial and corporate rule even as we seek to reform it
-- sitting at its tables and seeking to use its power to achieve
human and planetary ends? Or will we make a commit similar
to the one made by those some 200 hundred years ago who
decided the time had come to replace the institutions of
monarchy with the institutions of democracy? It is a critical
choice central to how we move ahead beyond the historic
events of which we have been a part this week.

The Publicly Traded Corporations, Limited Liability as an
Institutional Pathology

We must come to terms with the basic nature of the limited
liability, publicly traded corporation -- the institution that
dominates both the WTO and the global economy. It's a legal
instrument designed to concentrate economic power without
accountability -- which means it is both anti-democratic and
anti-market.

It is useful to recall that the modern corporation is a descendant
of the chartered corporations -- such as the East India
Corporation and the Hudson Bay Corporation -- that were formed
by the British crown as monopolies to exploit colonial territories.
They acted as governments unto themselves, fielded their own
armies, and ruthlessly extracted wealth at the expense of the
subject peoples. Contrary to corporate propaganda, the
corporation was invented not to create wealth, as to extract and
concentrate it -- and that is what all too many of them are still in
the business of doing.

Indeed, life's closest analogy to the publicly traded, limited
liability corporation is the cancer. We get cancer when a
genetic defect causes a cell to forget it is a part of a larger
whole and to seek its own unlimited growth without regard to the
consequences.

Paul Hawken has compiled data suggesting that corporations in
the United States now receive more in direct public subsidies
than they pay in total taxes. That's only a small part of the story
as it doesn't include the costs to society of unsafe products,
practices, and workplaces or from outright corporate crime. In
the United States we have over billing by defense contractors of
$26 billion. Over billing by medicad insurance contractors of $23
billion. $54 billion a year in health costs from cigarette smoking.
$136 billion for the consequences of unsafe vehicles. $275
billion for deaths from work place cancer. Pretty soon it starts
adding up to some real money.

In The Tyranny Of The Bottom Line, CPA Ralph Estes
documented the annual costs imposed on the public by
corporations in the United States. His total came to $2.6 trillion
measured in 1994 dollars. This is roughly five times the
corporate profits reported in the United States for 1994 and the
equivalent of 37 percent of 1994 U.S. GDP. If we extrapolate
this ratio to a global economy with an estimated total output of
$29 trillion in 1997, we come up with a likely total cost to
humanity upward of $10.73 trillion to maintain the infrastructure
of global corporate capitalism -- with the benefits going primarily
to the wealthiest 1% of the world's population that has any
consequential participation in stock ownership. .

It is sobering to note that the corporation is one of the most
authoritarian of human institutions. No matter what authority a
corporate CEO may delegate, he can with draw it with a snap of
his fingers. In the U.S. system, which is rapidly infecting Europe
and the rest of the world, the corporate CEO can virtually hire
and fire any worker, open and close any plant, change transfer
prices, create and drop product lines almost at will -- with no
meaningful recourse by the persons or communities affected.
Given that our largest corporations command economies larger
than those of most states, this represents an extraordinary
anomaly in supposedly democratic societies.

With these characteristics in mind, let's review some frequently
suggested responses to corporate rule.

* Appeal to the corporate conscience to act more responsibly.
  This buys into the fiction that the corporation has the
  qualities and moral sensibilities of a human being. A legal
  contract has no conscience and no loyalty to people or
  place. The people who work for corporations are merely
  employees subject to dismissal if they bring to bear any
  interests other than the short-term profits of shareholders.

* Let the dynamics of the global market place take their
  course and trust that market forces will correct the
  dysfunctions by rewarding the responsible corporations over
  the irresponsible. This suggestion is based on the false
  premise that market forces work naturally in the direction of
  rewarding corporations that internalize their full costs. It is a
  logical contradiction, since cost externalization is clearly an
  enormous source of profit.

* Let the market decide as consumers and investors express
  their economic choices. People who want high labor and
  environmental standards will make their purchasing and
  investment choices accordingly -- paying higher prices and
  accepting lower investment returns where necessary. This
  presumes that corporations have a right to externalize their
  costs onto the community and that if people want it
  otherwise they must pay. It also requires that consumers
  and investors resist corporate wrong doing corporation by
  corporation, deed by deed, through consumer and
  investment boycotts. It strips us of our rights as citizens and
  reduces us to expressing our preferences only in our
  economic roles as consumers and investors.

* Regulate corporations through governmental action. While
  regulation is essential in any market economy, relying on
  governmental regulation to reliably curb the excesses of
  corporations that command more resources than most
  states is a weak and temporary solution because of the
  inherent instability of the resulting balance of powers.
  Historically such balances have always broken down as
  corporation's have chosen to reassert their power.

* Realign economic structures in ways that bring economic
  relationships into a more natural alignment with the public
  interest. This requires replacing the present system of
  unaccountable rule by a corporate and financial elite with a
  system of political and economic democracy -- a project
  comparable to the human project of eliminating monarchy. It
  involves the elimination of the publicly traded, limited liability
  corporation as an institutional form. I submit that this is the
  only option consistent with the goal of creating just,
  sustainable, and compassionate societies that work for all.

It leads to an ambitious agenda, but one I believe to be within
our means given how much is at stake and the evidence of a
remarkable human awakening revealed by the events of the past
week. Let me lay out some of its elements to illustrate the
possibilities I believe we should be giving serious consideration.

* Radical campaign finance reform o Public financing of
     elections o Free air time for candidates * Eliminate
     Special Corporate Rights and Exemptions o Legislation or
     constitutional amendment to strip away the legal fiction of
     corporate personhood. o Legislation to remove the
     corporation's limited liability provisions. Corporate
     shareholders should bear the same responsibility and
     liability for the care and use of the corporate property as
     does any property owner. * Eliminate Corporate Welfare o
     Withdraw corporate subsidies and tax breaks. o
     Implement cost recovery fees to offset otherwise
     externalized costs. * From Absentee to Stakeholder
     Ownership o Incentives for stakeholder buyouts o
     Education on economic democracy and ownership
     participation. o Restructure worker pension funds to
     exercise rights of workers as nonfinancial stakeholders. *
     Give Preference to Human-Scale Enterprises o Strong
     enforcement of anti-trust provisions. o Prohibitions on
     mergers and acquisitions. o Graduated corporate income
     and asset taxes. * Restore the Integrity of Money o
     Eliminate dependence on debt based money by imposing
     100% reserve requirement on demand deposits. o Prohibit
     all lending for financial speculation - eliminate the buying
     of stocks on margin and prohibit lending to hedge funds. o
     Restore unitary community banking. * Reform international
     financial markets and economic management. o Currency
     exchange only on presentation of an invoice or airline
     ticket. o Restore national ownership and control of
     productive assets in low income countries -- a kind of
     international land reform initiative. o Eliminate Third World
     debts and the mechanisms by which they are created o
     Assign responsibility for matters relating to the
     international regulation of trade, finance, and corporations
     to an upgraded United Nations. o Close the WTO and the
     World Bank. o Reform and restaff the IMF with a new
     mission: to help countries balance international accounts
     and finance temporary short-falls in current accounts.
     Make it strictly accountable to the United Nations.

I suggest we be clear that our goal is not to reform global
corporate and financial rule -- it is to end it. The publicly traded,
limited liability corporation is a pathological institutional form
and financial speculation is inherently predatory. As a first step
both must be regulated. The appropriate longer term goal is to
rid our economic affairs of these institutional pathologies --
much as our ancestors eliminated the institution of monarchy.

------------------------------------------------------------------
David C. Korten is the author of The Post-Corporate World: Life
After Capitalism and When Corporations Rule the World. He is
board chair of the Positive Futures Network, publishers of YES!
and president of the People-Centered Development Forum (http:
//iisd.ca/pcdf). He holds MBA and Ph.D. degrees from the Stanford
University Graduate School of Business and has served on the
faculty of the Harvard Graduate School of Business. He has more
than thirty years experience in Third World Development.
------------------------------------------------------------------
http://www.ratical.org/co-globalize/afterSeattle.html


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