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O
ureconomicandpoliticalsystemhas
producedacreditmeltdown,ashrinkingmiddleclass,stagnantwages,escalatingfoodandenergyprices,adramaticdeclineinU.S.manufacturing and research capability, billion-dollarpaypackagesforhedgefundmanagers,sky-rocketingconsumerdebt,anunstableU.S.dollar,atrillion-dollarbailoutforWallStreet,andthespreadingcollapseof Earth’senvironmentalsystems.Byanycrediblemeasure,oureconomicsystemhasfailed. Wheneconomicfailureissystemic,temporaryfixes,evenveryexpensiveonesliketheWallStreetbailout,arelikeputtingaBand-Aidonacancer.Theymaycreateatempo-rarysenseofconfidence,buttheeffectissolelycosmetic.Politiciansandmostpunditsarelookingonlyatthetipof theeconomiciceberg.Pullawaythecurtaintolookbehindtheheadlines,andwefindapotentiallyterminaleconomiccrisiswiththreedefiningelements:1. Excesshumanconsumption,whichisacceleratingthecollapseofEarth’secosystem.2. Unconscionableinequalityandtherelatedsocialalien-ation,whichareadvancingthesocialcollapsemanifestinterrorism,genocide,crime,andgrowingprisonpopu-lations.3. Aneconomicsystemruledbyfinancialmarkets,globalcorporations,andeconomictheoriesdevotedtoincreas-ing consumption while rolling back real wages and benefits for working people to make money for therichestamongus.
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 DavidKorten,authorof  
 WhenCorporationsRuletheWorld
and 
TheGreatTurning:FromEmpiretoEarthCommunity 
 ,isco-founder&boardchairof  
 YES!Magazine
andaboardmemberofthe BusinessAllianceforLocalLivingEconomies.Seedavidkorten.org.
EconomicRedesignforthe21stCentury 
 byDavidKorten
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Thisisatimefordecisiveaction.Thefinancialmeltdownhasshakenpublicconfidenceinthepeopleandinstitutionsnowincharge.Thetran-sitiontonewpoliticalleadershipcreatesanopeningforboldaction.Inthisarticle,IframethechoicebeforeusandpresentmyhighdreamoftheeconomicaddresstothenationthatIhopePresidentBarackObamamightdelivershortlyafterhisinauguration.
TheOldEconomyEconomistvs.theNewEconomyEcologist
Thetaskbeforeusistoreplacethecultureandinstitutionsof
atwentieth-centuryeconomydesignedandmanagedtoservefinancial valueswiththecultureandinstitutionsofanewtwenty-first-century economydesignedtoservelifevalues.Theformerundoubtedlyleadstoenvironmental,social,andeconomiccollapse.Thelatterholdspromiseof leadingtotheworldmosthumansreallywantforthemselvesandtheirchildren—aworldofhealthy,happychildren,families,andcommunitieslivingtogetherinpeaceinvibrant,healthy,naturalenvironments.Itisourstochoose.Thechoicebetweenthepathoffailureandthepathofpossibilityisframedwithdramaticclaritybytwoinfluentialauthors—oneatwentieth-centuryeconomistandtheotheratwenty-first-centuryecologist.JefferySachs,in
CommonWealth:EconomicsforaCrowdedPlanet 
(2008),prescribesaBand-Aid.JamesGustaveSpeth,in
 BridgeattheEdgeoftheWorld:Capitalism,theEnvironment,andCrossingfromCrisistoSustainability
(2008),prescribesaholisticcuregroundedinaculturalandinstitutionaltransformation.Sachs,aneconomistbytrainingandperspective,isknownforhisworkasaneconomicadvisertonationalgovernmentsandanarrayofpublicinstitutions.
 NewYorkTimes
reporterPeterPasselldescribedhimas“probablythemostimportanteconomistintheworld”inthearticle“Dr.JeffreySachs,ShockTherapist,”whichwaspublishedJune27,1993.Speth,whohasdegreesinlawandeconomics,hasadistinguishedadministrativecareerasfounderandformerheadoftheWorldResourcesInstitute,administratoroftheUnitedNationsDevelop-mentProgram,andnowDeanoftheYaleUniversitySchoolofForestry.Sachswritesfromtheperspectiveofaneoclassicaleconomist;Spethfromtheperspectiveofasystemsecologist.
Sachs:PainlessFineTuning
Sachs opens
Common Wealth 
with a powerful and unequivocal problem
statementthatraisesexpectationsofaboldbreakwiththeeconomicorthodoxyofwhatSachsreferstoas“free-marketideologues.”Thechallengesofsustainabledevelopment—protectingtheenvironment,stabilizingtheworld’spopulation,narrowingthegapsbetweenrichandpoor,andendingex-tremepoverty—willtakecenterstage.Globalcooperationwillhavetocometothefore.Theveryideaofcompetingnation-statesthatscrambleformarkets,power,andre-sourceswillbecomepassé….Thepressuresofscarceenergyresources,growingenvi-ronmentalstresses,arisingglobalpopulation,legalandillegalmassmigration,shiftingeconomicpower,andvastinequalitiesofincomearetoogreattobelefttonakedmarketforcesanduntrammeledgeopoliticalcompetitionamongnations.ThisstatementwouldhaveservedequallywellasanopeningstatementforSpeth.Beyondtheproblemstatement,SachsandSpethbothagreethatthereisanessentialroleforgovern-mentandforgreatercooperationamongnations.Fromthere,however,asIwillelaboratelater,wemightwonderwhethertheyliveindifferentworlds.Sachsassuresusthatwecaneasilyendenvironmentalstressandpovertyusingexistingtechnologies.Byhisestimation,withmodestnewinvestmentswecansequestercarbon,de- velopnewenergysources,endpopulationgrowth,makemoreefficientuseofwaterandothernaturalresources,andjump-starteconomicgrowthintheworld’sremainingpocketsofpersistentpoverty.Sachsmadeclearhisbeliefthatthereisnoneedtoredistributewealth,
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Whatwillittaketogreenourcities?  AroofinlowerManhattan.
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cutbackmaterialconsumption,orotherwisereorganizetheeconomy,duringhis2007lec-turetotheRoyalSocietyinLondon,whichwasbroadcastbytheBBC.Idonotbelievethatthesolutiontothisproblemisamassivecutbackofourconsump-tionlevelsorourlivingstandards.Ithinkthesolutionissmarterliving.Idobelievethattechnologyisabsolutelycritical,andIdonotbelieve…thattheessenceoftheproblemisthatwefaceazerosumthatmustbere-distributed.I'mgoingtoarguethatthere'sa wayforustousetheknowledgethatwehave,thetechnologythatwehave,tomake broadprogressinmaterialconditions,tonotrequireorasktherichtotakesharpcutsoflivingstandards,butrathertolivewithsmartertechnologiesthataresustainable,andtherebytofindawayfortherestoftheworld,whichyearnsforit,anddeservesitasfarasI'mconcerned,toraisetheirownmaterialconditionsaswell.Thecostsaremuchlessthanpeoplethink.Farfromcallingforarestraintonconsumption,Sachsprojectsglobaleconomicexpan-sionfrom$60trillionin2005to$420trillionin2050.Relyingonwhathecallsa“back-of-the-envelopecalculation,”heestimatesthattheworld’swealthynationscaneliminateextremepovertyanddevelopandapplythenecessaryenvironmentallyfriendlytechnologiestoaddressenvironmentalneedswithanexpenditureofamere2.4%ofprojectedmid-centuryeconomicoutput.Problempainlesslysolved,atleastinSachs’smind.Sachsgivesnoindicationofwhy,ifwecanstabilizepopulationandmeettheneedsofthepoorwithmodestexpenditure,weshouldneedorevenwantaglobaleconomysixtimeslargerthanitspresentsize.Asistrueformosteconomists,andindeedthegeneralpublic,Sachssimplyassumesthateconomicgrowthisbothgoodandnecessary.Itapparentlyneveroccurstohimtoquestionthisassumption,whichSpethdemonstratestobefalse,asIwillelaboratelater.Furthermore,sinceSachsmaintainsthatthereisnoneedformorethanthe verymodestredistributionheestimatesisrequiredtoputthepoorestofthepooronthepathtoeconomicgrowth,heseemstoassumethatconsumptionwillcontinuetoincreaseacrosstheboard.Hesaysnothing,however,aboutwhatformsofconsumptionhebelievescancontinuetomultiplywithoutplacingyetmorepressureonalreadyoverstressednaturalsys-tems.Unlessmorepeoplearedrivingcars,livinginbighouses,eatinghigheronthefoodchain,travelingfurtherwithmorefrequency,andbuyingmoreelectronicgear,whatexactly  willwebeconsumingmoreof?Andfromwhatmaterialswilltheybefabricated?Sachsneitherraisesnoranswerssuchquestions.NordoesSachsmentiontherealitiesofpoliticalpowerandresourcecontrol—forexam-ple,therealitythatinmostinstancespoorcountriesarepoornotforwantofforeignaidbut becauseweoftherichnationshaveusedourmilitaryandeconomicpowertoexpropriatetheirresourcestoconsumebeyondourownmeans.Itistroubling,althoughnotsurprising,thatSachs’sreassuringwordsgetanattentivehearingamongestablishmentpowerholders.
Speth:RedirectionandRedesign
InstarkcontrasttoSachs,Spethconcludes,“Theplanetcannotsustain
capital-ismasweknowit,”callingfornothinglessthanacompleteeconomicredesign.Nosimpleback-of-the-envelopeprojectionsforSpeth.Hetakesahardlookatthere-searchongrowthandenvironmentaldamageinrelationtogrossdomesticproduct(GDP)andconcludesthatdespiteaslightdeclineintheamountofenvironmentaldamageperin-crementofgrowth,growthinGDPalwaysincreasesenvironmentaldamage.Therelation-shipisinherentinthesimplefact,whichapparentlyescapedSachs,thatGDPismostlyameasureofgrowthinconsumption,whichisthedrivingcauseofenvironmentaldecline.Spethisclearthatalthoughchoosing“green”productsmaybeapositivestep,notbuyingatallbeatsbuyinggreenmosteverytime:Tosumup,weliveinaworldwhereeconomicgrowthisgenerallyseenasbothbenefi-centandnecessary—themore,thebetter;wherepastgrowthhasbroughtustoaperilousstateenvironmentally;wherewearepoisedforunprecedentedincrementsingrowth;wherethisgrowthisproceedingwithwildlywrongmarketsignals,includingpricesthatdonotincorporateenvironmentalcostsorreflecttheneedsoffuture
ASK THE AUTHOR!
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We’llinterviewDavidfor20minutes,andthenhe’lltakequestionsfromYOU.
6PMPST(9PMEST)Monday,Jan.
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