Rio+20: A Defining Choice
By David Korten
17 June, 2012
How can we create an economy that serves the health and well-being of both people and the planet? Follow the Earth’s lead.
Next week, 20 years after the 1992 UN Rio Earth Summit, representatives of the world’s governments will gather again in Rio de Janeiro, Brazil to frame a global response to the Earth’s environmental crisis. Debates leading up to Rio+20 are focusing attention on a foundational choice between two divergent paths to the human future.
The Money Path
For money path advocates, money is the defining measure of value. Profit and growth in financial assets are the bottom line measures by which they assess the performance of both the firm and the economy. They value natural wealth by the price it will fetch in the market and look to global financial markets as the preferred mechanism to organize our human relationships with one another and nature.
They propose that the best way to save nature is to price her assets and sell them to wealthy global investors to hold and manage as their private property. Privatization, commodification, monopolization, and financialization, they assure us, will drive up prices and thus create an incentive to provide for their proper care to maximize a perpetual flow of earnings.
The Life Path
For life path advocates, Earth is our living Mother, sacred and beyond price. Her health and vitality are essential to our well-being and are therefore a priority bottom line measure of economic performance. In return for Earth’s gifts, we have a sacred obligation to future generations to protect and restore to full health the wondrous generative systems by which she replenishes her air, water, fertile soils, fish, forests, and grasslands, and maintains the stable climate on which our health and well-being depend.
Because we receive Earth’s abundance as a gift, we must assure it is shared to meet the needs of all. None among us created this abundance and no one of us has a right to claim it for our exclusive personal benefit.
Money, which is basically a system of accounting, is only a tool useful in facilitating human exchanges beneficial to people and nature. To use financial results as the bottom line indicator of economic performance makes no sense and leads to disastrous results.
Illusions of the Money World
Ignoring the reality that money in itself is nothing but a number, the institutions of money have created a fantasy world economy grounded in a grand illusion that money is real wealth and that making money creates real wealth to the benefit of all.
Since financial logic favors current returns over future returns and values natural systems only for the financial return they generate, it can lead to dangerously myopic short-term thinking. Here are three examples:
1. Money in the bank is more valuable than trees in the ground. Some years ago the minister who managed Malaysia’s forests explained to me why Malaysia should clear cut its forests and sell the timber. The interest from the sale would grow faster in the bank than the trees grow in the forest. I imagined a lifeless Malaysian landscape populated only by banks housing computers faithfully calculating the interest payments on Malaysia’s savings deposits.
2. Financial bubbles create wealth. A 1996 article in Foreign Affairs, “Securities: The New World Wealth Machine" argued that the key to wealth creation is no longer the production of real goods and services, but rather the inflation of financial bubbles based on securitized assets. The argument was so absurd I at first thought the article was a joke. It wasn’t. The article circulated widely on Wall Street and reportedly helped inspire the mortgage securitization frenzy that crashed the economy in 2008.
3. Your fishery collapsed? No problem. A 1997 article in the culinary section of The New York Times urged readers not to worry about the collapse of Atlantic fisheries, because abundant supplies of delicious fish were being flown in each day from Chile and Thailand and were even cheaper than local varieties because of cheap labor. No mention of a global decline in fish stocks as the number of hungry mouths in the world continues to grow.
Since it evaluates all decisions based on financial returns to people who already have money, financial logic assures that whatever remains of Earth’s natural wealth will be controlled by the 1 percent, who are looking for the right moment to make a quick profit from a speculative sale.
Serious change in the relationship between humans and nature begins with the commitment to a new bottom line—one that recognizes that humans are living beings, and that converting Earth’s living capital into financial assets for the 1 percent is a suicidal act of collective delusion.
Asking how to allocate natural resources to maximize financial return is the wrong line of questioning. In the real world of Earth Community the question we should be asking is, “How do we best meet our human needs in a way that maintains or enhances the health and vitality of the natural systems on which we depend?” We would do well to answer that question by further asking, “What would nature do?” Or, more specifically, “What does the biosphere do?”
Life and Earth Community
The biosphere, Earth’s extraordinary, interconnected layer of life, is an exquisitely complex planetary-scale fractal structure comprised of countless trillions of individual organisms—each of which depends on and contributes to the life of the whole. It provides a natural systems model for a New Economy with the capacity to meet the needs of Earth’s 7 billion humans, bring our species into balance with Earth’s living systems, and create truly democratic societies.
Earth’s biosphere, the product of 3.5 billion years of trial-and-error learning, is global in scale yet truly local everywhere, and organizes from the bottom up. With its continuous repurposing and recycling, nothing is wasted. As a system, it has an extraordinary capacity to adapt to local conditions and optimize the sustainable capture, exchange, storage, and recycling of energy, water, and nutrients. This is the key to its impressive resilience and productivity. It meets the needs of all the world’s living organisms, without any equivalent of money, global corporations, central authority, or the destabilizing use of fossil fuels.
Because each local subsystem balances its consumption and reproduction with local resource availability, the global system maintains a healthy, dynamic balance with Earth’s total water, energy, and nutrient resources.
Providing for our human needs while bringing ourselves into balance with Earth, our living home, depends on creating a New Economy that works in symbiotic partnership with the biosphere’s structure and dynamics to optimize the health and well-being of all. This economy would consist of a planetary system of resilient, locally rooted, self-reliant bio-regional economies. They would be comprised of human-scale, locally owned enterprises that work in symbiotic partnership with their individual local ecosystems, meeting local needs with local resources. As each local economy comes into balance with its own place on Earth, the global economy will in turn come into balance with Earth itself.
This system would place decisions regarding Earth’s care in the hands of people who depend on the generative capacity of their local, natural systems for their livelihoods—now, and for generations to come. This creates a direct and natural incentive to assure the continuing good health and productivity of these systems. Either people maintain the productivity of their local fisheries, or face the prospect of doing without.
Local people will likely choose to assess the performance of their local economies using living indicators like the health and vitality of their families, communities, and natural systems—outcomes they actually want. One model might be the Gross National Happiness indicators developed and used by the nation of Bhutan as the basis for its economic policy making.
To navigate a transition to a New Economy we will need to create the frameworks and tools of a new economics that begins not with the study of money, markets, and pricing, but rather with the study and deep understanding of the living systems structure and the dynamics of Earth’s biosphere. This was to be the task of ecological economics before it became distracted by a futile effort to gain respectability among mainstream economists. The appropriate goal of those devoted to creating this new, ecologically grounded economics should be to gain the attention of real world policymakers and politically active citizens.
Rights of Earth Mother
The transition from treating Earth as a commodity to treating her as a sacred being with inalienable rights begins in our minds, as we embrace a new story of our true human nature and our place in the grand scheme of creation. Education, the arts, and religion all have critical roles.
The work of revising our legal frameworks is also underway, backed by a global social movement seeking to secure, in law, the inalienable rights of nature. More than 100 communities in the United States have passed ordinances granting rights to nature, and Ecuador has included language that recognizes the rights of nature in its constitution. Presumptuous though it may be for us to grant rights to our sacred Earth Mother, it is a necessary step in redefining our human relationship with her.
Those who live by the logic of finance will surely oppose efforts to grant rights to nature on the grounds that it conflicts with the natural rights and interests of the human individual. In reality, the presumed conflict is only another example of the distortions created by myopic illusions of the money world. In the real world, the rights and interests of nature align remarkably well with the rights and interests of future human generations.
The real conflict is not between humans and nature. It is between current and future human generations. When the actions of current generations reduce or destroy the generative capacity of Earth’s natural living systems for a quick financial return or gratuitous shot of material gratification, we do not borrow from future generations: We steal from them. Because of the profound implications for their well-being, this may be the ultimate crime against humanity. We are just beginning to realize it may as well be a crime against creation.
Given current environmental politics and the record of previous UN environmental summits, there is little prospect that Rio+20 will produce an international agreement of substance to guide us to a just and sustainable human future. We can, however, consider it a victory for people and nature if proposals by Wall Street interests seeking to advance the commodification and financialization of nature are clearly and publically rejected; and if the call for a new framework based on recognition of the rights of nature and acceptance of our moral obligation to our scared Earth Mother gains further traction.
Dr. David Korten (livingeconomiesforum.org) is the author of Agenda for a New Economy, The Great Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World. He is board chair of YES! Magazine, co-chair of the New Economy Working Group, a founding board member of the Business Alliance for Local Living Economies, president of the Living Economies Forum, and a member of the Club of Rome. He holds MBA and PhD degrees from the Stanford University Graduate School of Business and served on the faculty of the Harvard Business School.
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