excerpts form the book
Globalizing Civil Society
Reclaiming Our Right to Power
by David Korten
Seven Stories Press
*****
BEYOND THE LEGACIES OF THE TWENTIETH CENTURY
SUCCESS IN THE MONEY WORLD, CRISIS IN THE LIVING WORLD
During the latter part of the second millennium, and in particular
the twentieth century, the lives of most of the world's people
have become increasingly divided between two parallel and intertwined
realities. One reality-the world of money-is governed by the rules
set by governments and central banks and by the dynamics of financial
markets. The other-the world of life-is governed by the laws of
nature.
In the world of money, the health of society and its institutions
is measured by financial and economic indicators-by growth in
such things as economic output, stock prices, trade, investment,
and tax receipts. In the world of money, continuous, sustained
growth seems to be the primary imperative. Because they are structured
to seek ever-increasing productivity and profits, modern economies
either grow in terms of the monetary value of their output, or
they collapse. The growth imperative of the money world finds
expression in the notion of development as an unending process
of economic expansion-which has been the organizing principle
of public policy for most of the last half of this century.
The living world is governed by quite different imperatives.
Here healthy function manifests itself in balance, diversity,
sufficiency, synergy, and regenerative vitality. Growth is an
integral part of the living world, but only as a clearly defined
segment of the life cycle of individual organisms. The sustained
physical growth of any individual organism or unlimited numerical
expansion of any species is an indicator of system dysfunction
and poses a threat to system integrity. Thus growth in the living
world tends to be self-limiting-as with a cancer that condemns
its host or a species whose numbers upset the ecological balance
and ultimately destroy its food supply.
Though as living beings we are creatures of the living world,
we have yielded the power of decision in human affairs to the
institutions of the money world and for these institutions the
imperatives of the world of money take precedence over those of
the living world. Money-world institutions have been enormously
successful in shaping the twentieth century's advances in technical
and organizational mastery as instruments of economic growth.
Indeed they have increased total world economic output from five
to seven times over the past fifty years. They have also brought
unprecedented material wealth to approximately 20 percent of the
world's people and vast riches to the most fortunate one percent.
The world's power holders, who with few exceptions belong to the
most fortunate one percent, understandably see this as a considerable
accomplishment. Having experienced the possibilities of the underlying
development model, they feel affirmed in their belief that the
systems of governance that allocate the world's resources are
fundamentally sound. Shielded by their wealth from sharing in
the living-world consequences of money-world decisions, those
consequences lack-for them-a compelling sense of reality.
From the perspective of the living world, however, the consequences
of the economic development/growth agenda have been disastrous.
Here we see that each addition to economic output results in a
comparable increase in the stress that humans place on the earth's
ecosystem, deepens the poverty of those whose resources have been
expropriated and labor exploited to fuel the engines of growth,
and accelerates the destruction of non-human species. The terrible
costs fall on those who are denied a political voice-the poor,
the young, and generations yet unborn.
Most of the benefit of increased economic output is going
to those who already enjoy a substantial level of physical comfort
and security-contributing more to an increase in inequality than
to a reduction in poverty. A single statistic reveals how obscene
inequality has become. In 1996 the world had 447 billionaires,
up from 274 in 1991. Their combined net worth equals the estimated
combined annual income of the poorest half of humanity. Denied
both a political voice and economic opportunity, the excluded
are often left with crime and violence as their only evident avenues
for survival, self-expression, and individual advancement.
Violence in the home and in the streets has become a pervasive
part of the human experience. We must consider what must be done
to address unmet needs for human shelter, community, and livelihoods.
Military conflicts-sponsored by some of the same governments and
supplied by a flourishing international arms trade- are systematically
destroying existing housing stocks, communities, and livelihoods
in campaigns of terror and genocide. The landmines that are but
one legacy of these conflicts will render vast areas of desperately
needed land unsafe for habitation or cultivation for decades to
come. Such armed conflicts are a primary cause of an alarming
increase in the number of refugees in the world. In 1960, the
UN listed 1.4 million international refugees. By 1992, the number
had grown to 18.2 million. The UN estimates that currently an
additional 24 million people are displaced within the borders
of their own countries.
No less tragic is the suffering of the tens of millions of
development refugees, the victims of the silent violence of development
projects that expropriate-and often destroy-their homes, lands,
waters, and fisheries for uses such as hydroelectric dams, tree
plantations, and urban development projects that often benefit
fewer people-usually better off-than those they displace. These
development refugees are deprived of shelter, community, and means
of livelihood just as certainly as are the victims of organized
armed violence.
The evidence is mounting. Despite impressive increases in
average life spans, a major portion of humanity has gained little
benefit-and in many instances suffered considerable loss-from
the economic prosperity that has brought unimaginable wealth to
a few. In short, while the long term trends in the money world
point toward ever-increasing prosperity, the long-term trends
in the living world point to growing imbalance, instability, and
system stress. Dealing with this reality is basic to any effort
to create socially and environmentally sustainable human settlements.
In large measure, the crisis of global-scale social and environmental
disintegration now underway can be explained in terms of a confrontation
between the conflicting imperatives of the money world-which holds
the power of decision-and the living world of people and nature-which
bears the tragic consequences of those decisions.
UNDERLYING CAUSES OF SYSTEM FAILURE
In substantial measure the policies responsible for the imbalance
are a legacy of twentieth century ideas and institutions that
go largely unchallenged by those who have been their primary beneficiaries.
Government officials, policy experts, corporate representatives,
and official declarations continuously reaffirm, almost as an
article of religious faith, a belief that economic growth, market
deregulation, privatization, and economic "globalization"
are the irreducible foundations of peace, equality, human rights,
democracy, a healthy environment and social fabric, and universal
prosperity. From the perspective of the money world, the logic
of such assertions is impeccable. From the perspective of the
living world the logic suffers from three serious flaws:
* Continued economic growth on a finite planet with an already
overtaxed ecosystem accelerates environmental breakdown, intensifies
the competition for resources between rich and poor, and deprives
future generations of the necessary means to meet their basic
needs. This is confirmed by a growing body of evidence that many
of the world's ocean fisheries, fresh water resources, and farm
and forest lands are being exploited at rates substantially greater
than their ability to regenerate .
* Expansion of the market economy ever more activities once
performed by households and communities is monetizing human relationships,
weakening the social fabric, and destroying livelihoods faster
than jobs offering, more than poverty-level compensation are being
created.
* The institutions of a globalized, free market economy that
control privatized assets respond only to the imperatives of the
money world. They are virtually blind to the imperatives of the
living world. Economic globalization is shifting control over
resources, markets, and technology from people, communities, and
governments to transnational financial markets and corporations-
placing these institutions beyond the reach of public accountability,
making responsible local action to meet local needs increasingly
difficult, and creating dangerous financial instability.
A free market allocates fairly and efficiently only when market
players have equal economic power. When extreme economic inequality
is combined with market deregulation, the rich invariably win
the competition for scarce resources-with results that are neither
fair, nor efficient. The wealthy become ever more powerful, gain
control of the rule-making system, and accelerate the process
of rewriting society's rules to their own advantage.
Social services used by the jobless and the working poor are
cut back in the name of fiscal responsibility. Tax structures
become more regressive as subsidies and tax breaks are granted
to the most wealthy investors in the name of job creation. Regulatory
restraints on the concentration and abuse of corporate power are
relaxed. Such agendas are being advanced by elite interests all
over the world-by right wing political movements in the North
and through structural adjustment programs implemented by the
World Bank and the International Monetary Fund (IMF) in the South.
One of the challenges to colonial administrators was that
many colonized people obtained their livelihoods from their own
lands and common areas. For colonists to profit from the lands,
labor, and consumption of subjected people it was necessary to
force them into dependence on a money economy. This was accomplished
by such measures as limiting access to common lands by declaring
all "uncultivated" lands property of the colonial administration
and by imposing taxes payable only in cash.
In many parts of the world this played into a process of deepening
gender-differentiated economic roles-with men most often specializing
in paid employment in the money economy, confining women to serving
a wide range of essential-but inadequately valued-household and
community productive and reproductive needs in what remained of
the non-monetized "social economy." During the past
ten to twenty years there have been dramatic economic changes
in many countries. Declining wages, cutbacks in public services
for the poor, and a rise in single parenting have made women more
dependent on their personal earnings from the money economy-often
in petty trade or insecure jobs under substandard conditions.
There has not, however, been a compensating reduction in the maintenance
needs of households and communities for unpaid work. With neither
men nor women able to give adequate attention to those non-monetized
household and community functions that maintain the social fabric
of society, relationships of trust and caring have been giving
way to fear and violence as revealed in the growth in violent
crime, spouse abuse, divorce, teenage suicide, and drug use being
experienced around the world
CONCENTRATING POWER, SHEDDING ACCOUNTABILITY
A combination of economic globalization and productivity-enhancing
technology continue to transform economic relations in ways that
add to widespread inequality and instability. Trade agreements
negotiated under the General Agreement on Tariffs and Trade (GATT),
the structural adjustment policies of the World Bank and International
Monetary Fund (IMF}, and advances in communications technology
are melding national economies into a seamless global economy.
Transnational corporations are more able to shift the production
to localities that offer lower production costs without fear of
losing access to more affluent markets. At the same time, advanced
information technologies are making it possible for a small fraction
of the potential workforce to produce most of the goods and services
the global marketplace is able to absorb. The U.S. Fortune 500
industrial corporations reduced their total employment by 4.4
million jobs between 1980 and 1993-a period during which their
sales increased by 1.4 times, assets by 2.3 times, and CEO compensation
by 6.1 times.
While the giants are shedding people, they are not shedding
control over money, markets, or technology. The world's 200 largest
industrial corporations, which employ only one-third of the world's
population, control 28 percent of the world's economic output.
The top 300 transnationals, excluding financial institutions,
own some 25 percent of the world's productive assets. Of the world's
100 largest economies, 51 are now corporations- not including
banking and financial institutions. The combined assets of the
world's 50 largest commercial
banks and diversified financial companies amount to nearly
60 percent of The Economist's estimate of a $20 trillion global
stock of productive capital.
Concentration of control over markets is proceeding apace.
The Economist recently reported that in the consumer durables
industry the top five firms control nearly 70 percent of the entire
world market, a ratio that economists consider highly monopolistic.
In the automotive, airline, aerospace, electronic components,
electrical and electronics, and steel industries the top five
firms control more than 50 percent of the global market, placing
them clearly in the category of monopolistic industries. In the
oil, personal computers and media industries the top five firms
control more than 40 percent of sales, which indicates strong
monopolistic tendencies. Yet the consolidation continues with
no end in sight. The total value of mergers and acquisitions completed
worldwide during 1995 was expected to reach $800 billion-exceeding
the total for any previous year by more than 25 percent.
The same firms shedding employees while tightening control
over capital and markets are also shedding their obligation to
provide good wages and working conditions for those who produce
the goods and services they sell. The popular Nike athletic shoes
that sell for US $73 to $ 135 around the world are produced by
75,000 workers employed by independent contractors in low income
countries. A substantial portion of these workers are in Indonesia-mostly
women and girls housed in company barracks, paid as little as
15 cents an hour, and required to work mandatory overtime. Unions
are forbidden and strikes are broken up by the military. In 1992,
Michael Jordan reportedly received $20 million from the Nike corporation
to promote the sale of its shoes, more than the total compensation
paid to the Indonesian women who made them. An unregulated global
market is shifting the financial rewards away from those who produce
what others need to those who control money and are successful
at convincing others to buy what they neither need nor can afford.
The living world cries out for more cooperation among localities
toward the creation of higher social and environmental standards.
Yet people and communities on opposite sides of the globe are
pitted against one another in a desperate global competition for
the available jobs by outdoing one another in courting corporate
favor by offering ever more attractive subsidies and tax holidays,
lower wages, and lax environmental and employment standards.
THE GLOBAL CASINO
The corporations that are the most visible players in this
global "race for the bottom" are themselves captive
to the dynamics of a world financial system that gives them little
freedom to manage their affairs with the broader public interest
in mind. More than $1 trillion changes hands each day in the world's
international currency markets-seeking short-term financial returns
unrelated to the production or trade of any actual goods or services.
The globalized financial system has become a giant gambling
casino in which the players are betting on short-term fluctuations
in the prices of financial instruments in search of instant gains
unrelated to productive contribution. Such gains are almost inherently
extractive, meaning that they make no consequential contribution
to adding value to any real product. They depend on extracting
wealth from others who are doing productive work and making real
long-term investment in the production of needed goods and services.
The players in these markets operate in a virtual reality of cyberspace,
a world of pure money wholly detached from the living world and
blind to its imperatives.
Of course currency traders are a minority of the professionals
who manage the investment pools controlled by large investment
houses, banks, mutual funds, and retirement funds. The dynamics
are similar, however, even with those whose trades involve stocks
and bonds that represent ownership shares in real companies. Whether
their decisions contribute to creating real goods and services
that people want and need is not their concern. The pressures
for instant gains encourage excesses that make the entire financial
system increasingly unstable. This instability and its real world
consequences were starkly revealed in the Mexican pesos crisis
of December 1994.
Until the moment of the crash, Mexico was being touted as
an economic miracle. Yet what looked like a dynamic economy was
mainly an illusion created by Mexico's success in attracting $70
billion in foreign money over five years with high interest bonds
and a super-heated stock market. As little as 10 percent of this
money went into real investment. Most of it financed consumer
imports, capital flight, and debt service payments. It also helped
to create 24 Mexican billionaires. The bubble burst in December
1994 as the hot money rushed out. Mexico's stock market and the
value of the peso plummeted. The subsequent Mexican austerity
policy and a shifting terms of trade between the United States
and Mexico resulted in massive job losses on both sides of the
border. U.S. President Clinton responded by putting together a
$50 billion bailout package at taxpayer expense to assure that
the Wall Street firms that held Mexican bonds would be repaid.
The new link between the dollar and the peso made currency speculators
nervous and the value of the dollar fell sharply against the yen.
Not a penny of the bailout money went to 750,000 Mexicans who
would be put out of work by government imposed austerity measures.
Subsequent financial failures in Thailand, Malaysia, Indonesia,
the Philippines, South Korea, and Brazil followed similar patterns.
And like Mexico, they elicited a commitment of billions of dollars
in public money to protect the foreign bankers.
More than any other human institution, the global financial
system in which hundreds of billions of dollars move unimpeded
across national borders at the first hint of changing financial
prospects is setting the world's social and economic priorities.
Yet the social and environmental consequences of the actions for
which the major players in that system reap handsome rewards,
never register on their computer screens.
As evidence mounts of the failure of our mega-institutions
to deal with two of the most fundamental requirements of healthy
social function-economic justice and environmental sustainability-fear,
disillusionment, and distrust increase and the legitimacy of these
institutions erodes. This opens the way to growing political extremism
and instability and creates a fertile ground for demagogues who
build their political base on foundations of ethnic, racial, and
religious hatred and violence. The resulting social breakdown
is already well advanced in many parts of the world-most particularly
in Africa and many inner cities of both North and South. Until
the underlying institutional causes of growing injustice and unsustainable
exploitation of the ecosystem are addressed, the crises will almost
certainly continue to deepen.
*****
CIVIC ENGAGEMENT FOR TRANSFORMATIONAL CHANGE
There are signs throughout the world of a political and spiritual
awakening of civil society to the reality that national and global
institutions are pursuing agendas at odds with the needs of people
and other living things. Countless citizen initiatives prompted
by this awakening are coalescing into a global political movement
for transformational change. The emergent social forces find expression
in local initiatives aimed at regenerating local economies, ecosystems,
and communities. For example, J the United Nations Conference
on Environment and Development (UNCED} inspired initiatives in
more than 3,000 communities around the world to create local Agenda
21s.
WITHHOLDING LEGITIMACY, RECLAIMING RESPONSIBILITY
As people reclaim responsibility, they are also withdrawing
the legitimacy from the institutions that have abandoned them,
reasserting their basic rights over local resources, and demanding
greater public accountability from governments and global corporations.
They are also reaching out to form new alliances, both nationally
and internationally, with those engaged in similar initiatives.
Most of these initiatives are peaceful. Some are not.
January 1, 1994 was inaugural day for the North American Free
Trade Agreement (NAFTA), which guaranteed the rights of money,
goods, and companies to move freely between Mexico, Canada, and
the United States without interference from national governments
or borders. Business leaders throughout North America were elated
by the expanded opportunities to produce cheaply in Mexico on
the backs of low paid workers and an unprotected environment while
selling dearly in the affluent markets of the United States and
Canada. The indigenous peoples of Chiapas State in southeastern
Mexico. however. correctly recognized the NAFTA agreement as an
extension of economic forces that for generations had step-by-step
deprived them of their lands and their livelihoods. In response
they launched an armed rebellion against the Mexican government.
Their battle cry-"Basta!" {Enough!)-was picked up by
popular movements all across Mexico and resonated around the world.
Mexican political analyst Gustavo Esteva pronounced the Chiapas
rebellion the "first revolution of the twenty-first century."
Revolutions of the twentieth century were contests for state power.
By contrast, the Chiapas people struggled for greater local autonomy,
economic justice, and political rights within the borders of their
own communities. They called on their fellow Mexicans not to take
up arms against the state, but rather to join in a broad social
movement to liberate local spaces everywhere from political and
economic forces that recognize no accountability to people or
place-a struggle likely to dominate much of the politics of the
21 st century.
Elsewhere in North America middle class Canadians have taken
up a similar cry. Fed up with a conservative government that seemed
to place the rights of global corporations ahead of the rights
of Canadian people and communities, they rallied in their October
1993 national election to vote out all but two members of the
ruling Tory party from their parliament. It was one of the most
sweeping repudiations of a democratically elected government in
history. Once seated, the new Liberal party government went on
to carry out essentially the same policies as the government the
electorate had voted out. It led many Canadians to believe that
global economic interests had usurped control over their government
and the Canadian economy. A citizen organization, the Council
of Canadians, was formed to oppose these forces. When NAFTA came
into force at the beginning of 1994, the Council launched an initiative
to develop a "Citizens' Agenda for Canada" to define
the kind of society that Canadians want for themselves and their
children. By 1997 the Council had reached 100,000 members and
continued to grow at a rapid pace.
In Brazil a very different citizen initiative was underway
to address similar forces. Citizenship Action Against Misery and
for Life-a grassroots hunger movement spearheaded by Herbert "Betinho"
de Souza of IBASE-sought to transform national politics. Betinho
had emerged as a public hero of a successful Brazilian citizen
movement that led to the impeachment in 1993 of president Fernando
Collor for gross corruption. Once the new government was installed,
Betinho decided to capitalize on his reputation and the sense
of civic empowerment instilled by the success of the impeachment
campaign to mobilize Brazilians behind a national commitment to
end the perpetual hunger of 32 million Brazilians who lived on
incomes of less than $120 a year. Most Brazilians readily accepted
Betinho's assessment that this situation was a national disgrace
in a country with one of the world's most modern and dynamic economies.
Responding to Betinho's call, some 2.8 million Brazilians organized
themselves into neighborhood hunger committees comprised of workers,
students, housewives, business persons, artists, and others. As
they engaged the task of ending hunger in their respective neighborhoods
they were encouraged to ask why so many people could find no opportunity
in the midst of a thriving economy. A 1994 survey revealed that
roughly a third of Brazil's adult population contributed personally
to the campaign in one way or another.
The movement's participants are encouraged to reflect on the
act of befriending and improving the life of a hungry person as
both a political and a spiritual experience and as a source of
insight into the causes of the dysfunctions of Brazilian society.
Facilitated through media presentations and local meetings, citizens
are led to a growing awareness of the dynamics of inequality and
exclusion that flow from the concentration of economic power in
a few giant corporations.
In country after country people are demonstrating that they
are no longer willing to leave it to mainstream political parties
and special interest lobbyists to set the terms of the public
policy debate. They are acting to reclaim their basic rights and
sovereignty as citizens to recreate their societies in ways that
better respond to their needs and aspirations.
GLOBALIZING CIVIL SOCIETY
Many citizen groups are reaching out to form national and
international alliances committed to transformational changes
aimed at addressing root causes of the growing global crisis.
An emergent social movement is coalescing around a shared vision
of a world of diverse cultures and just and sustainable communities
living in balance with the natural world and joined in cooperative
endeavor-not by a global economy ruled by powerful corporations-but
by an awareness of the underlying interdependence of the living
world. This movement celebrates the emergence of a new global
awareness and sense of solidarity that is joining people from
every part of the planet in the task of creating a new global
civilization grounded in peace and cooperation.
This movement gained substantial impetus from the NGO Forum
of the United Nations Conference on Environment and Development
(UNCED) held in Rio in 1992. This Forum brought together civil
society organizations from all around the world to negotiate a
series of citizen treaties for creating a just and sustainable
world. It was here that the emergent movement began to become
more consciously aware of itself as participants from widely diverse
backgrounds came to realize the extent to which they shared common
values and aspirations. The basic elements of this emergent consensus,
as revealed through the discussions of the UNCED NGO Forum and
the commitments that flowed from them, were recorded in The People's
Earth Declaration.
International women's organizations have taken a central leadership
role in carrying this process forward through the NGO Forums of
UNCED and subsequent UN conferences. The movement is now going
through a transition, moving beyond the critique of failing institutions
to building practical policy agendas for the human future. Here
again women are in the lead, moving beyond more traditional gender
politics to work on creating an inclusive vision of a world that
will provide a better future for everyone-with support and encouragement
from the United Nations Women's Organization (UNIFEM).
The needed rethinking of human institutions will not be accomplished
in conventional international conferences dominated by the institutions
that have created our crisis. We must look for creative new approaches
to advancing realization of a citizen-led vision of the human
future. One possibility might be to convene the world's first
truly global conference in the year 2000. Instead of limiting
participation to those able to travel to one of the world's major
cities, it might involve thousands of simultaneous, independently
organized citizen gatherings all over the world in which people
share their experiences, hopes, and commitments toward creating
just and sustainable societies for the third millennium.
A major focus might be on neighborhood, village, and municipal
level gatherings that bring people together in the places where
they live. Others would be national, regional, and international.
All would be meetings of people meeting in their capacity as fellow
human beings rather than as representatives of particular groups
and institutions. Every locality and participating organization
would be responsible for its own events. The various gatherings
would be linked into a global dialogue and celebration through
a variety of electronic media including video, radio, and the
Internet. Such a process would itself embody an approach to citizen
engagement in local, national and global governance consistent
with the democratic ideal of citizen sovereignty.
It is time for we the people of the world to work together
as self-empowered citizens of a small and suffering planet to
create just and sustainable societies dedicated to bringing our
species into balance with itself and the planet. To do so we will
need to reclaim the power we have yielded to institutions that
no longer serve the human interest and to create new institutions
dedicated to the premise that all power flows from the will and
aspirations of the sovereign people. As the Zapatistas have taught
us, the challenge is ours and the time is now.
*****
Dr. David C. Korten is a founder and board chair of the Positive
Futures Network, publishers of Yes! A Journal of Positive Futures,
author of When Corporations Rule the World, and president of the
People-Centered Development Forum. He is currently working on
a book tentatively titled Envisioning a Post-Corporate World.
*****
When Corporations Rule the World. The themes developed in
this paper are elaborated in When Corporations Rule the World,
co-published by Kumarian Press, 630 Oakwood Ave., Suite 119, West
Hartford, CT 06110-1529, U.S.A., phone (203) 953-0214 / fax (203)
9538589; and Berrett-Koehler Publishers, 155 Montgomery Street,
San Francisco, CA 94104-4109, U.S.A., phone (415) 288-0260 / fax
(415) 362-2512.
The Positive Futures Network publishers of Yes! A Journal
of Positive Futures, P.O. Box 10818, Bainbridge Island, WA 98110-0818,
U.S.A., phone (206) 842-0216; email: yes@futurenet.org; http://www.futurenet.org
The People-Centered Development Forum (PCDForum), 14 E. 17th
St., New York, NY 10003, U.S.A.; e-mail: pcdf@igc.apc.org.; http://iisdl.iisd.ca/pcdf
Reforming
the System