The New Economy: Can We Design a Self-Correcting Society? by David Korten — Agenda for a New Economy

The New Economy: Can We Design a Self-Correcting Society? by David Korten Agenda for a New Economyposted May 02, 2011

I’m sometimes called an economist because I write and speak about economic issues. The discipline for which I received my academic training, however, is organizational systems design. I view the economy through an institutional design lens.

As a Harvard Business School professor in the early 1970s, I taught the art of structuring human relationships in corporations to maximize profit. Partly, that involves getting the incentives right; it also involves culture, authority, communication flows, and a host of other influences subject to management intervention.

The same intellectual tools can be used to design the institutional structures of societies—either to consolidate the power and privilege of the ruling elites or to share power and facilitate creative, democratic self-organization directed to enhancing a community’s well-being. Institutional systems can also be designed to maximize the rate of consumption of real wealth to create phantom wealth, or to meet the needs of all in balanced relationship with the biosphere.

A focus on designing economic systems to maximize private financial return has given us the Wall Street dominated system that drives a violent competition for resources; a global race to the bottom on wages, benefits, environmental standards; flagrant excesses for the few, misery for the many; and insecurity for all.

Worst of all, this system has no built in capacity to self-correct. Its decision makers are insulated from the social and environmental consequences of their decisions….

full article –

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