Tikkun Magazine, Winter 2011

Treat the System, Not the Symptom

by David Korten

Editor's Note: this is an extended version of David Korten's article in the January/February 2011 print edition of Tikkun.

As a student in business school, I learned a basic rule of effective problem solving that has shaped much of my professional life. Our professors constantly admonished us to "look at the big picture."

The visible problem -- a defective product or an underperforming employee -- is usually a symptom of a deeper system failure. Look upstream and correct the systemic cause so the problem will not recur. It is perhaps the most important lesson I learned in more than twenty-six years of formal education.

Many years after I left academia, an observation by a wise Canadian friend and colleague, Tim Brodhead, reminded me of this lesson when he explained why most efforts to end poverty fail. "They stop at treating the symptoms of poverty, such as hunger and poor health, with food programs and clinics, without ever asking the obvious question: Why do a few people enjoy effortless abundance, while billions of others who work far harder experience extreme deprivation?"

Tim summed it up with this simple statement: "If you act to correct a problem without a theory about its cause, you inevitably treat only the symptoms." It is the same lesson my business professors were drumming into my brain many years earlier.

Profound System Failure

We are dealing with a profound economic system failure. Our financial systems are gyrating out of control beyond human accountability, extreme inequality is tearing apart the social fabric, Earth's critical living systems are collapsing, and political corruption has rendered our political institutions incapable of effective corrective action.

These problems will not be corrected by pumping more money into the system at the top, as the Federal Reserve is doing, or by making regulatory adjustments at the margin. Nor will we get where we need to go by pleading with people to do the right thing, as long as we have a culture that celebrates institutions that reward the destructive behaviors we must now put behind us.

Need for Collective Citizen Action

We must direct our attention to making the right thing easy and pleasurable by working together to create a culture that celebrates positive values and to foster institutions that reward positive behavior. Healing the society requires collective citizen action to transform the culture and institutions of a terminally dysfunctional economic system, through a three-fold strategy:

1. Change the prevailing cultural stories relating to the nature of wealth, the purpose and structure of the economy, and the possibilities of our human nature. This we do through conversation.

2. Create a new economic reality from the bottom up by rebuilding local community-based living economies, as millions of people are already doing. This we do through cooperative community-level action.

3. Change the rules of the game to favor an equitable and sustainable real wealth economy of Main Street over the socially and environmentally destructive phantom wealth economy of Wall Street. This we do through policy advocacy.

Penetrating the Phantom Wealth Illusion

Changing the prevailing cultural stories is foundational. The values and institutions of the twentieth century are both a product and a source of false, values-distorting stories that have induced a cultural trance, a kind of cultural psychosis that leads us to reduce all values to financial values and all human exchanges to financial transactions for individual private financial gain.

We have been conditioned by language and education to the illusion that money is wealth and that people who make money are creating wealth.

Modern money is perhaps the most mysterious of human inventions. It is nothing but a number of no substance or intrinsic worth created by a simple accounting entry when a bank makes a loan. Yet in contemporary societies, money determines our access to virtually every essential of life.

Recognizing Money as a System of Power

The decisions of those who control the creation and allocation of money determine the fate of nations and shape the boom and bust of economic life. They determine who will have food, shelter, education, and health care and who will not, yet it is all just creative accounting. It is the most effective and undemocratic of tyrannies, because its inner workings are largely invisible and therefore difficult to understand and challenge.

Economists routinely describe money as a medium of exchange -- which it is -- and a measure and storehouse of value -- which it is not. They never mention that it is a system of power that results in massive market distortions, if it is not allocated equitably.

Money created out of nothing unrelated to the creation of anything of corresponding value, is phantom wealth. It is a form of theft and should be so treated.

Indeed, Wall Street has built a whole industry devoted to creating phantom wealth for the private benefit of its most powerful players and shaped both our economic and political systems to serve that end.

Growing Real Living Wealth Economies

Real wealth is anything that has real intrinsic value, for example land, labor, food, and knowledge. The most valuable of all forms of wealth, however, are those that are beyond price: love; a healthy, happy child; a job that provides a sense of self-worth and contribution; membership in a strong, caring community; a healthy, vibrant natural environment; and peace.

None of these most precious forms of real wealth find any place on corporate balance sheets or in our calculations of Gross Domestic Product.

We can create a real wealth economy in which life is valued more than money, and in which power resides with ordinary people who care about one another, their community, and their natural environment. Ultimately, this requires a radical restructuring of the system by which as a society we create and allocate money to shift that power from Wall Street speculators to Main Street people and communities.

A National Conversation

The foundation, however, is a national conversation through which we come to recognize as a people the essential difference between phantom financial wealth and real living wealth and rearrange our lives and institutions accordingly. It is a conversation to which every spiritual progressive appropriately contributes. Let that conversation flow forth through our synagogues, churches, mosques, temples and every public forum.

The human future turns on our ability to reach beyond current politically feasible alternatives and address the systemic upstream causes of the financial, social, environmental, and political crisis unfolding around us. It is time to rediscover our humanity, reclaim the power that Wall Street corporations and their global counterparts have usurped, rebuild community, and bring ourselves back into balance with one another and Earth -- our living home. It requires deep system transformation grounded in recognition that true prosperity and security are products of sharing and community.

David Korten is the author of Agenda for a New Economy, The Great Turning, and When Corporations Rule the World. He is board chair of YES! Magazine. His new website is http://livingeconomiesforum.org.

His articles in Tikkun include "Spiritual Awakening, a New Economy, and the End of Empire," 2009; and "Economic Redesign for the 21st Century," November/December 2008.

 


Source Citation: Korten, David. 2011. From Phantom Wealth to Real Wealth. Tikkun 26(1): 52

 

 
tags: Economy/Poverty/Wealth, Global Capitalism  
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