Beyond the Bailout: Play by Market Rules |
Thursday Dec 11 2008
By David Korten | Website
Reprinted from "Sustainable Happiness," the Winter 2009 YES! Magazine284 Madrona Way NE Ste 116, Bainbridge Island, WA 98110. Subscriptions: 800/937-4451
Once we extinguish the immediate fire, we can turn our attention to redesigning the potentially beneficial institutions of finance to align with the imperatives of sustainability and equity. Ironically, given the excesses committed by Wall Street in the name of market freedom, the economy we need to create looks remarkably like the market economy vision of Adam Smith, revered by many as the father of capitalism.
Smith envisioned a world of local market economies populated by small entrepreneurs, artisans, and family farmers with strong community roots engaged in producing and exchanging goods and services to meet the needs of themselves and their neighbors. His vision bears little resemblance to the Wall Street economy of footloose global capital, credit default swaps, reckless speculation, and global corporate empires.
As I elaborated in When Corporations Rule the World and The Post-Corporate World: Life After Capitalism, socially efficient market allocation depends on a number of important conditions that Wall Street and those economists devoted to the ideology of neo-liberal market fundamentalism routinely ignore. These include:
- Market prices must internalize full social and environmental costs.
- Trade between nations must be in balance.
- Investment must be local.
- No player can be big enough to directly influence market price.
- Economic power must be equitably distributed.
- Every
player must have complete information and there can be no trade secrets
(read: no government-enforced intellectual property rights).
Written by eldering at The Great Turning
Tagged with: local_market_economies market_rules
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