I give this book Two Thumbs UP!! I enjoyed the book so much that I finished reading it in about 3 days. I highly recommend this book to all those concerned for our future lives. I feel this book would be an excellent teaching tool and should be required reading for all basic Economics Classes.
The author, David Korten, talks about two Economies with strikingly different priorities and values. There’s “Wall Street” which refers to institutions of big finance and the corporations that serve them. These corporations have become global symbols of Capitalism. The main problem with the Wall Street Economy is its creation of “Phantom Wealth” by issuing highly complex investments products that are difficult to understand. Examples of “Phantom Wealth” would be the High-Tech Stock Bubble and the Housing Bubble where values were artificially inflated to create the illusion of increasing wealth when none existed.
Then there’s “Main Street” which he describes as “the world of local businesses engaged in producing Real Wealth in the form of Real Goods and Services, where achieving a positive financial return is an essential condition, but the businesses function within a framework of community values and interests that moderate the drive for pure profit”. Examples of these businesses would be the local barbershops, the Farmers’ Markets, the Mom & Pop Shops, etc. This type of Economy is more caring & co-operative and takes into account local community and environmental issues.
The Basic Message that I believe we need to be aware of is that our current Economic Model is not going to work, no matter how many TRILLIONS of DOLLARS we throw at it. We need to let this Dysfunctional Economy run its course and die and start anew with a different approach. There needs to be more accountability and more attention paid to the limited resources we have to work with. The “Wall Street” crowd is obviously under the mistaken impression that there is NO LIMIT to Growth, but all indications show otherwise. We can only cut down so many trees and blow up so many mountains (Nasty practice of mining for coal) before the whole earth is destroyed. We need to see the Writing on the Wall and act now to reverse the Damaging Processes and begin with New Healing Processes, or else the Human Race is DOOMED, and deservingly so.
What I like about this book is that it also offers some solutions. Korten outlines a 12- Point New Economy Agenda with many suggestions we can implement. He has a lot of very good suggestions but 2 of my favourite ones are:
1). Changing the work compensation ratio from 1000 to 1 to a more reasonable 15:1. This means that a company currently paying its lowest-paid worker a $10,000 annual salary is also compensating its highest-paid (the CEO) an insane annual salary of $10,000,000! This has to stop. Korten suggests a Public Policy be put in place allowing for a more reasonable compensation ratio of no more than 15 to 1. Thus, if a company is paying the lowest-paid worker an annual salary of $10,000, then the highest-paid worker should not earn more than $150,000 annually. Similarly, in a healthcare environment, if the lowest-paid worker receives an annual salary of $30,000, then the highest-paid employee should not earn more than $450,000 annually. Sounds more than fair to me.
2). Introduce a Substantial Luxury Tax for nonessential consumption items that are socially harmful or environmentally wasteful or destructive. For instance if one purchases a fancy sports car like a Porsche , then there should be a substantial luxury tax charged as it takes more resources to produce and maintain than a regular car.
This book points out in no uncertain terms how the Public has been deceived and suggests ways we can reverse the damage. Effectively, the “Wall Street” gang was given a license by a very co-operative government to cheat, extort and rob the General Public of their hard earned money. Maybe the Dollar isn’t so mighty after all. What do you value more? The Not-So-Mighty Dollar or Time well spent with people you care about? So let us bid adieu to a life of Greed and Excess and usher in a new Era of Innovation, Restraint and Responsibility. It’s a time for exciting changes (BIG CHANGES). It may not be a pain-free ride, but it will be exciting. Are you up to the challenge?
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