Peak Moment 180: Taking back our lives from the Wall Street mafia (transcript added)
“Get rid of Wall Street!” says David C. Korten, author of Agenda for a New Economy and The Great Turning. Wall Street is about phantom wealth — real wealth is about happy, healthy families, local living economies in balance with Earth’s resources, and caring, resilient communities that provide life’s basics, like food, shelter, and education. To do that, we must change the rules to reduce the power of corporations, the politicians in their pocket, and a destructive money system. (www.davidkorten.org).
Download the audio for this episode here.
JD: Hi! Welcome to Peak Moment. I'm Janaia Donaldson. My guest today is David Korten who's brought us three tremendous books: When Corporations Rule the World; The Great Turning: From Empire to Earth Community; and now the second edition of Agenda for a New Economy: From Phantom Wealth to Real Wealth, with a Declaration of Independence from Wall Street.Them’s strong words, David! Thank you for joining me.
DK: It's always a delight to talk with you.
JD: I'm gonna quote you. You said: "A Wall Street-Washington axis has stolen our money and our country and denied us our rights." Those are fighting words; what do you mean? What's going wrong here, at least since the economic meltdown of '08, but deeper?
DK: It's not entirely new, but it has become so much more visible after the financial meltdown. Now, it's very interesting in terms of our politics because the progressives, and the liberals tend to look to government as a solution; the conservatives tend to look to private business, particularly corporations, the big corporations, as a solution. The problem we've gotten into is that in both the business world and the government world, we have got this enormous concentration of power, on one side the federal government and on the other side the Wall Street institutions. The two have essentially joined together in an alliance that is not about the interest of people, or communities, or families. It's really about the interest of Wall Street bankers, and making as much money as possible.
JD: Which is what we see with CEOS getting big bonuses and .... being bailed out with taxpayer money.
DK: Absolutely. But we also see it in the enormous financial contributions that the Wall Street makes to our politicians. At the same time we've got this concentration of control in corporate media. If you're a politician and you want to get elected, you have to have the money to buy the time from corporate media because they won't give you any time on the news. So, as a politician even with the best of intentions, you're locked in to whoever's got the money. And Wall Street has the money.
JD: And it looks like they're controlling everything, just about.
DK: That is the basic message. And here's the other piece of it. Their function - they control the economy and they control the society by their control of money. Their sole objective is not about creating economies and investing in real productive activities to produce jobs and to produce the food and all the things that we need to live well. They are only concerned with how much more money they can extract out of the system.
At the same time they have the capacity to create money out of nothing, and they use that power to hold us in debt slavery, control the politicians, and jigger all of our economic priorities in ways that serve their financial bottom line at the expense of people, families, communities, and nature.
JD: Sure looks like David and Goliath here -- nothing personal, but then again maybe it is...
DK: I don't mind that at all.
JD: ...but it looks like everything is so interlocked and so entrenched...I mean I see people wanting to say, separate investment banks from regular banks...things like what you call "tinkering at the edges", but what you're saying is tinkering is not going to do it.vDK: Tinkering is not going to do it. Wall Street cannot be fixed. It is a fundamentally corrupt system. Trying to fix Wall Street is like trying to fix the mafia so it's not quite so destructive. You get rid of the mafia. That's what Wall Street has become - it's essentially a legal crime syndicate. They're engaged in counterfeiting, in bribery, in extortion, in usury, in fraud. I mean you just name the range of crimes, but because they control writing the rules, it's not illegal.
JD: Because they're paying off the politicians -- people we would expect to be blowing the whistle on the political side aren't.
DK: That's right.
JD: Are we seeing anything happening for a movement from the grass roots? That's I think what you're pointing to, is the need for that.
JD: But you know, the Tea Party, and so on certainly are expressing the outrage, the correct outrage that people are feeling.
DK: The outrage is appropriate. We should all be outraged. But the question is where do we direct that energy?
JD: Tell me!
DK: First of all, this is the thing that to me is so fascinating. The power of that system depends on their ability to control the story by which we understand the nature and purpose of the economy, of wealth, of well-being. They've got us caught up in stories that say money is wealth, those who are making money are creating wealth, and since those people are Wall Street, we should be framing all of our rules in ways that allow Wall Street to maximize its profits, because that's good for all of us.
JD: That's the big story. Except this only happen to people up in Wall Street, not everybody else.
DK: It's a total lie, because it starts with the fact that money isn't wealth. That is one of the most deeply ingrained beliefs in our society. But once you step back, you break through the froth, money is nothing but a number. An accounting entry. It's created when a bank creates an accounting entry, creating credit or creating a loan. You have all these fancy connections and machinations between the Federal Reserve which is literally creating trillions of dollars now with nothing more than accounting entries, and then passing that money on to the Wall Street banks, all on the theory that if we restore their financial viability, they will flow credit into the real economy, into Main Street, and will be creating jobs and producing food, and houses, and all that kind of thing.
But the fact is Wall Street isn't interested in that kind of productive activity. It's only interested in these financial games. So it's looking for how to create the next financial bubble. How do we create more phony securities that we can trade and treat as real assets so they become the collateral for us to issue ourselves more loans, so we can take more bonuses, and we can pay more politicians. I mean it is so outrageous once you begin to understand it.
But you have to break through all the details, cut through to the real bottom line, which is that it is all about numbers. And the key to breaking this is changing the story. Waking up from this cultural trance, recognizing that money is nothing but accounting entries. And who gets to make those accounting entries and decide where that money goes, those people control the society. And in a society where we believe in democracy, and we believe that power should reside on people, and that our institutions should be accountable to people and communities, then changing the way that money system is structured is the absolute foundation of creating societies that work.
JD: I get that real wealth is like in a farmer's field and his productivity, or a factory that makes chairs. It's tangible. But the hold the money system now has on us, with their numbers, how do you get a story turned around that can change our behaviors when they have that much level of control? Don't they have to make some changes up there, too?
DK: What's really interesting is: if you're telling a lie, you have to keep repeating it. It's amazing to me how quickly people get this simple truth that money is nothing but a number, it's nothing but an accounting entry....it is a system of power manipulated against our own interests. And we as a democratic society have the right to take back that power. People get that very quickly.
Now, the next step though, is that it has got to break into a larger conversation. If I just keep that truth in my head, it doesn't do anything. We have to change the collective story. As a society we begin to discredit those people who are telling the lies. Then we begin to refashion our systems.
Now, you mentioned, what are people doing? There are really three keys to change, to deep change of this nature. The first is to change the framing stories of the culture. That's what we're talking about, the stories about wealth and money, etcetera. The second is to work to create a new reality from the bottom up.
JD: Bottom up! So you're not trying to fight those who are in control?
DK: Well, that comes in a minute. The second stage is creating the new reality. That's what communities are doing all around the country and all around the world. This is the Business Alliance for Local Living Economies, which I'm very involved in. Or the American Independent Business Alliance. The local food movements. The move your money from a Wall Street bank to a local bank. These are all very concrete things. Increasingly we're looking at that process in terms of a vision of really recreating local economies that root power in the community, that are built around the value that it's not about how much money we make, it's about the health of our children, the health of our families, our happiness, our sense of meaning in life, our sense of connection.
The economy is foundational to all of these. We can create an economy that is truly democratic and truly based on the real concept of a market, so it's not centrally planned or controlled, but it's about people getting together and working out the means by which they create their livelihoods together.
JD: I'll join! I want that!
DK: People get it and people are indeed joining. It's very exciting. It's a source of hope.
JD: It is. It is.
DK: The third element is Change the Rules. That's where we get back control of our politicians. But as progressive organizations we've got to be really... I'd say as progressive and conservative organizations... the wonderful thing is that a lot of these are conservative values about community control, and about family, and about personal responsibility and accountability. We need to get together and begin to think together across political lines as to... What is the world that we really want? How do we want society to operate? What are the rules that actually support democracy, support real ownership by real people, instead of giving the advantage to Wall Street bankers and members of this criminal syndicate that are really engaged in sucking the life and the real wealth out of our families & communities, putting people in situations of debt slavery and desperation for a job, so they'll do any work or do anything that a Wall Street firm finds profitable in the short term.
JD: That has deepened so much in these last two years. It's visible. People having houses foreclosed, more homeless, more unemployed, cities and states at the edge.
If we made you king of the world, king of the U.S., and you get to do it all, what would you change?
DK: Well, that's a bit of an anomaly, 'cause I'm really committed to getting rid of the Wall Street kings.
JD: Okay, they're not going to give up themselves voluntarily, so how can we change the rules, change the system, and begin to diminish their power.
DK: One of the underlying concepts that I like is called "Walking Away from the King". I got this from Thom Hartmann. The king's only power depends on the power we yield to him. If we walk away and we're not going to play your game anymore, we're going to be organizing our local economies and telling the true stories, and we're going to start telling our politicians that if they want to get elected, we're not going to pay attention to those TV ads, we're going to pay attention to what they're actually doing. So we begin to take that power back.
Now, where do we work? One of the first things is change the indicators. We now measure our economic performance by GDP - is it growing or shrinking? How fast? GDP is a financial measure. It's a measure of how fast money is flowing through the economy, which we've been conditioned to think is a good thing. But not necessarily a good thing.
JD: Because GDP measures - if it's just money flowing through - if it's the Wall Street casino, that counts as GDP. If it's a toxic plant site that we have to clean-up, or people's cancer treatments...
DK: Exactly. Where I really became tuned to this is my work in low-income countries, in Africa, Asia and Latin America. You always wonder: the World Bank and IMF are always putting out all these statistics about how incomes are increasing and people's lives are better off, and so forth. You step back and realize that, at the early stage, what's really happening is you're taking people who are living in a subsistence economy - where they grow their own food, they get their health care from their neighbor. Most of life is not monetized. They help each other build their homes, etc. So it's all based on personal caring relationships. So they may not be as well off as we want materially, but they have a stronger social structure and they are far better off than when the development process comes in, forces them off of their land, breaks up their community, forces them into slums or into being landless migrant agricultural workers. Yet, they're making more money.
JD: And they need that money to try and climb up the ladder, or...
DK: Well, they need that money because they can't grow their own food any more, and so they have to buy food that is produced and controlled by some transnational agribusiness company. So these are the things that get really hidden when we're talking about GDP. In our own societies, the more we break up our families so that we do less of our care internal to our family and our household, the more money we need. We now get into a situation where for a household to survive you need two or three adults with two or three jobs each, among other things, to pay for your babysitter, gas to go to your jobs and all that. More money, more profits for Wall Street. But it's not really improving the quality of our lives.
So we need start moving the indicators for what are the things that we really want. Things like a healthy environment, a healthy community, healthy happy children. So many of the things that are most valuable are totally intangible and they cannot be purchased for any price in the market.
JD: That's true. You can't measure good social ties that give you a safety net should something happen. That beats Social Security that may not be here, or whatever.
DK: Yeah, we're told our security depends on our individual personal wealth. Well, but you can't count on that. The only way you can acquire enough financial wealth to really be secure is to put it into Wall Street where these guys are trying to steal it from you as fast as they can. They only real security is the security of your relationships with the people in your family and community. Rediscovering that, and recreating those relationships is one of the keys. That all starts with changing what are the indicators of a healthy family, what are the indicators of a healthy strong caring community, what are the indicators of a healthy environment.
Now, the other indicator we so focus on is the stock market. The stock market goes up and down. That's simply a measure of how fast rich people are getting rich faster than the rest of us, and increasing their concentration of power. And not for doing anything productive but simply participating in a system that is inflating all sorts of financial bubbles to create what I call phantom wealth - financial assets that are unrelated to the production of anything of real value.
Now supposedly that money in the stock market is going into investing in productive activity. But very little of that - most of it is just trading shares back and forth between people. And most of that, nothing goes to the business. There's no new investment in the business that comes out of that.
JD: So it's just a game.
DK: It's a game. It's a set of illusions. And we buy into it because of course we've broken down the security of our families. We've robbed the Social Security funds to cover current deficits. But we've also neglected the fact that the ultimate issue about retirement is how many retired people are there to the number of working people who are producing the food, and all the things that retired people need. But we've turned it all into money, and so all Social Security is going to fail, partly because we're going to make sure it fails, we're going to destroy it. But also because people are living longer. The elder population puts more burden on the working population unless we change the retirement age and recognize that... You know, one of the big insights of my life was when I turned sixty-five, realizing this doesn't have to be the end of your life, with nothing to do now but sit on the beach and play golf, but you're irrelevant, you're useless to the society. I mean, it looks kind of neat, but when I go on vacation, when I'm on the beach for more than a week, it gets pretty boring. The big breakthrough for me was realizing that our elder years is one of the most exciting and productive times of life. More traditional societies have recognized this and have roles for the elders as teachers, mentors, and wisdom keepers. And it's a whole lot more fun for the elders because you're really engaged, you're not useless, you're not just sitting around waiting for the grim reaper to show up and relieve the boredom.
JD: So change the indicators is a big part of...
DK: Change the indicators, and change the money system.
JD: How do we change the money system?
DK: Well, key thing in terms of changing the money system is starting with changing the story about what is money and the importance of how the money system is organized. This is the real irony. When I was growing up we had a financial system that was pretty much rooted in the community. Most of our banks were local community banks and we had rules that they couldn't even have a branch. All the business had to be within so many hundred feet of their front door. So these banks and we also had mutual savings and loans were basically organized cooperatives and credit unions. So a lot of these institutions were non-profit and cooperatively organized. They were service institutions to the community. The local community banks may have been for profit and individually-owned, but they were dependent on deposits from the community. People put money in, they were intermediaries, and they loaned that money back out to local businesses that were producing real goods and services, providing local shopping, local jobs, and so forth. All of that was within and rooted in the community. Part of the process in which local people owned their local enterprises and their local economies, so they were interested in a whole lot more than just the financial profit. My family had a music and appliance store in our town. But we lived in the community. My dad participated in the Kiwanis; my uncle who was in the store was part of the Rotary club. They were really concerned about what happened in the community, the cleanliness of our local water, and all these kinds of things.
JD: More than just the economic bottom line, they were part of the social fabric, the cultural fabric of your community. And that's part of your vision here.
DK: Exactly. That's part of the vision. Restoring that.
JD: The abuses that have happened, that concentration of wealth... If people don't support the king any more, and build our institutions more here, and put more of our money in that direction, that strikes me. There's still plenty of players that are gonna keep that system going.
DK: Oh, there are. That's where we need to be working at all levels on changing the rules ultimately. Part of that is building the political consituency, the political demand for deep change. That has to start with the new story about what the purpose of the economy is, and what the rules should be. But it's also that as we're creating the new reality, that itself is changing the story, and helping us see in the real way what the possibilities are. And as we're working at the community level to rebuild our food systems, to move toward green building and sustainable energy and so forth, then we keep running up against all these rules that make that very difficult to do. Okay, let's mobilize to change those rules because ultimately it's about our rights as human beings, not the rights of some legally artificial personality we call a corporation. It is a fiction, it has no soul, it has no conscience. It's just a pool of money! And yet we've created a legal system where that pool of money has more rights than we do as real people.
JD: So we dismantle it piece by piece both as we construct the new, the new story embodied, in our communities. As we bump against the rules encouraging Goliath...
DK: This is our Declaration of Independence from Wall Street, which parallels the early colonies when they declared their independence from the British King. They walked away. They didn't start a war. They were walking away. They were reclaiming their own economy, they were building their own politics. And the king got nasty. And they said: "We're not trying to invade England, we're not trying to take what's yours; we're just trying to reclaim what is ours and our rights."
JD: Let us Declare our Independence from Wall Street! Thank you. This is a lively conversation, a good one and an important one. Thank you for sharing that with us.
DK: Thank you.
JD: You're watching Peak Moment, community responses for a changing energy featuring locally reliant living for challenging times. I'm with David Korten. Join us next time.
What do you think? Leave a comment below.
Sign up for regular Resilience bulletins direct to your email.