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March. 2007Edition 91

This is where we hope to keep you thinking.  The site does not focus on diversionary minutia.  You get enough of that  incessant spin coming from mainstream media.

 

How 50 million people are changing American society

by Alexander M. Dake

Paul H. Ray, market research guru coined the term Cultural Creatives: as part of a renaissance in American culture reflecting the desire to live more economically, environmentally, and spiritually sustainable. According to Ray, they are the ones coming up with most new ideas in American culture, operating on the leading edge of cultural change. They tend to be middle to upper-middle class. There are a few more Cultural Creatives on the West Coast than elsewhere, but they can be found in all regions of the country. The overall male-female ratio is 40:60. They are the fastest-growing demographic group in the U.S. and number approximately 50 million Americans (about 26 percent of the adult population).

Ray distinguishes Cultural Creatives from two other groups: the Traditionals, who represent a nostalgic image of return to small town, religious America, and number 48 million adults (about 24.5 percent of the adult population); and the Modernists, who represent a belief in the modern economy, urbanism, and industrialism -- in short, our current society. They number 80 million adults (about 47 percent of the adult population). Alexander Dake interviewed Ray about the current state of the quiet revolution of the Cultural Creatives.

AD: How did you “discover” the Cultural Creatives?

PR: When in 1986 I co-founded American LIVES, I was less interested in traditional market research and more in how America was changing. One of the first things we discovered in our research was that a clear cultural change was happening: not just change in one area of people’s lives, but in many areas. From environmental issues to consumption patterns, from media preferences to the purchase of food products. We also discovered that the people who were changing were a definite subculture and part of a longer-term pattern. Although most Cultural Creatives in our surveys thought they were alone or part of a very small group, it turned out that they represented a sizable and fast-growing portion of the American population, now reaching over 50 million.

AD: How do you explain this impression of Cultural Creatives that they are not part of a larger group?

PR: Cultures are generally self-maintaining, and the Cultural Creatives differ from the official culture of the U.S.: i.e., the modern culture, which is a culture of getting and spending, a culture of materialism, a culture of big government, big corporations, and big media. That official culture is adhered to by just under half of Americans. The other half of Americans doesn’t believe in it at all. Mainstream media usually describe Cultural Creatives as isolated individuals often labeled as tree huggers, protesters, New Agers, etc. When Cultural Creatives follow the news media, they see they are hardly mentioned, and therefore come to the false conclusion that they are only part of a very small group. Another reason why Cultural Creatives believe they are alone is that when you go to the workplace, you are supposed to check your values at the door. Cultural Creatives in the average workplace don’t express themselves as such. A third reason is that in the process of becoming a Cultural Creative, one frequently had to shed old friendships, old marriages, old careers, because their views were changing in ways others weren’t. This is a very individualized process, the benefit of which is that it really lets you change. The cost is that you believe you are unique and the only one going through this process.

AD: You indicate that there are 50 million Cultural Creatives in the U.S. and 80 million in Europe. What are the reasons for their rise?

PR: In part this is because our planet is in deep trouble. There is a daily drumbeat that we are moving into a crisis period for humanity. People who are good at synthesis, like most Cultural Creatives, see that if we continue our way of life we will be in deep trouble. At the same time there are personal changes happening at a psychological and spiritual level. Today, for the first time in human history, people who are interested in an inner life have access to every esoteric tradition in the world. Access to information about personal growth is enormous. Access to information about what is going on around the planet is never ending. In short, better information, large crises at the social level, and miniature crises at the individual level all contribute to more and more people being exposed to the opportunity to deal with personal change.

AD: Why are there so many women among Cultural Creatives?

PR: Women as both wage earners and homemakers feel the contradictions more in our society. They feel more subtle, institutional discrimination. If a society inherits dysfunctional institutions then it is often the people with intelligence, skills, and an alternative perspective who are going to come up with better answers, rather than the people who have inherited positions that were already favored. In these cases, it is women who will play an increasingly important role. Besides this, approximately 80 percent of the people in the Western world are concerned that their children will inherit a worse world than the one in which they grew up. People tend to do for their children what they wouldn’t do for themselves. Women, especially, will push for change and for a better world because of their children.

AD: You are currently researching how the political system is affected by cultural changes. What attracts you to this political research?

PR: I have been an activist all my life. I was involved in the environmental and peace movements in the 60s. I have always been interested in many different issues, from the impact to new technologies to how the economy works, from government politics to civil society. I am now connecting the dots between citizen activism, political activity, and change in business, as they are all part of one big picture. What I actually care most about is social change. Social change, however, is only possible through system change.

AD: What do you mean with systems change?

PR: If you are taking a system perspective of what is going on, one should ask what is our need as a whole system. As a planet, can we continue with 10 percent of the population having 80 percent of the resources? As a planet, can we survive if eco-systems all around the world are being destroyed? Looking at this big picture means changing the usual way of looking at the world and changing politics as usual. If all your time as a politician is spent on what bill is coming up or what political power struggle is being played out, you miss what it is all for. What I am trying throughout my life is to keep looking at that big picture.

AD: Can you describe the main points of your recent paper The New Political Compass?

PR: I explain that is not uncommon for political parties to go out of business. The fact that both the Democratic and Republican parties have lasted as long as they have in the U.S. is quite rare. Given the underlying structure of the electorate, it is very likely that either one or both parties will fundamentally change or break up. I describe a new way to picture political constituencies as a political compass with four directions instead of our outdated left-right description.

In the west of the compass, we see the political left, which is 12 percent of the U.S. population and 15 percent of likely voters. Directly opposed to them on their positions and values are the Cultural Conservatives (east on the compass). They count for 19 percent of the population and 21 percent of the voters. Those two left-right groups only count for 31 percent of the population, which means that almost 70 percent of the population is not included in this outdated description.

AD: What about this 70 percent?

PR: It turned out that two other groups could be distinguished: the Business Conservatives, representing big business and pro-globalization forces. They are in the south of the political compass and represent 19 percent of the voters and 14 percent of the population. More importantly, they represent 80 percent of the money, which is spent in politics. In the north, opposite the Business Conservatives in every sense of the word, are the New Progressives. They represent almost 45 percent of the voters and 36 percent of the population. New Progressives include Cultural Creatives and they are people who are shifting from the left to something new, without knowing exactly what that will be. It is clear that current politics do not supply what people want.

AD: What do people want?

PR: Well, the voters of the political north want politicians to take care of the issues that might destroy their children’s future: environment, education, health, women’s rights, etc. These issues might not be news to Western European voters, but they were to the political campaign organizations of Gore and Bush in 2000. None of those issues played a major role in that campaign. The real political struggle is not between left and right, but between people power vs. money power. Right now the U.S. Congress shows every sign of having been bought by those Big Business Conservatives and so is this presidency. The U.S. looks actually more like a plutocracy rather than a democracy. It is run by, for, and with big money.

AD: In The New Political Compass you describe a disconnect among the U.S. politicians of the last 40 years, of whom very few were involved or even aware of the various social movements and trends going on in the U.S. How is that possible?

PR: Many politicians are involved in a tough political conflict game. The rules of the game do not reward solving the big long-term issues. The structure of a conflict game rewards those who come up with small short-term incremental solutions, which are well inside the box of where compromise lies. The current political game is about finding common ground for deal making and splitting the difference. We currently have a political institution that in its ordinary operations is incompetent to tackle -- let alone solve -- the big issues.

AD: Considering the current electoral system, how do you see any fundamental changes materializing?

PR: Changes are possible. But a lot of political turmoil needs to be created by citizen movements. For example, all the social movements who are at the core of the political north need to work as one big movement of change. They could turn that into a new political party. They would need to find politicians who have defected from the old system as well as brand new politicians. In Europe you see social movements transforming easier into new parties, like the various green parties. But even in the European parliamentary systems there is resistance to taking up the big serious issues.

AD: So, a parliamentary system doesn’t seem to be the solution either?

PR: The current parliamentary system will not be sufficiently better than the American system to solve the issues. It still is part of modernism, and the problem of modernism and the structure of politics is that it assumes stability in the outer world that isn’t there. It assumes that things can go on as usual. A fundamental shift within a parliamentary system will still be necessary.

AD: When do you expect these political changes to happen?

PR: I like to look at it from the perspective of a geologist who needs to make an earthquake prediction. I do not expect it will happen in the next five years. There is probably a 50 percent chance that it will happen within 10 years. But I believe that within 20 years there is an 80 percent chance of a major political realignment. It is important to note that increased strain in the U.S. or the planet as a whole will influence this timeline. Certain experts have forecasted that there is a likelihood of 400 disasters to occur within the next 20 years, from major water shortages to a nuclear war in the Middle East, from an oil crisis to terrorists using biochemical warfare. If these disasters actually take place, that will greatly increase the push for change in the political systems.

AD: You usually seem to be an optimist, but these scenarios are not very optimistic.

PR: It depends on what timeframe you are using. I like to refer to Laszlo’s Generational Evolution Theory. Initially stable systems will experience increasingly stronger up-and-down fluctuations, until the whole system falls in a hole. Will the system then go into a dead spiral or will it rebound to a new higher level? Just like with personal crises, the old identity needs to be stripped away before moving to the next stage. In our political system that means that the old-line politicians need to be thrown out of office and that many old institutions need to fall apart. I am not very optimistic that in the short run we will be able to handle the crises very well. Still, crises are part of the process of stripping away the elements of our dysfunctional modernist culture. In the long run, I am optimistic that humanity will find its way to the higher level of a wisdom culture.

America’s Empire at a Crossroads

An Interview with Jim Garrison

Jim Garrison, president of the State of the World Forum -- a global network whose members include such distinguished figures as Mikhail Gorbachev, Oscar Arias, George Schultz, Jane Goodall, and Elie Wiesel -- has been engaged since the 1970s and 1980s in the citizen diplomacy movement to reduce nuclear tension between the United States and the Soviet Union. He’s refined his skills at facilitating private discussions among leaders across national boundaries and disciplines in several gatherings, of which the State of the World Forum and the Commission on Globalization have been the most recent examples.

Garrison has published several books, the latest of which, America as Empire: Global Leader or Rogue Power?, was published by Berrett-Koehler earlier this year. In it, Garrison urges his readers to acknowledge that America is an empire and asks what kind of empire America can and should be. Garrison is also the author of Paraview Press’ Civilization and the Transformation of Power.

Alexander Dake spoke with Jim Garrison about empire, an issue made even more important in light of the upcoming presidential elections.

AD: In your book America as Empire you describe America’s ascent from republic to empire. You see in the current situation the opportunity for the U.S. to become a transitional empire that will lead the world into liberal democracy. Could you explain that a bit more?

JG: First of all it’s important for Americans to internalize that not only is the U.S. the strongest nation in the world, but also the strongest nation in the history of the world. The U.S. currently controls more nations than any empire in history, both formally and informally. At the same time, history has moved beyond the nation state as the ultimate reservoir of sovereignty. That is a very important fact, because it means that even though the U.S. seems like a very mighty fortress, it rests on shifting sands. Still, the U.S. has had leadership before which made the best out of difficult circumstances and used those circumstances to build international cooperation and institutions based on American strength and vision.

AD: How do you characterize these times and the current state of the world?

JG: We are currently in the third major crisis of global affairs since the world wars of the last century. The world is interlinked by communication, trade, and travel in a way never attained before. The world is also beset by issues that can only be resolved globally: from ozone depletion to global warming, from overfishing to deforestation, from water scarcity to HIV/AIDS, from poverty and organized crime to failed states. The great tragedy in the world today is that never before has a nation been so strong as the U.S., never before has the world desperately needed dynamic leadership so much, and never before has that leadership been so conspicuously absent.

AD: When you speak of absent leadership you mean absent American leadership?

JG: Absolutely. If you look back in history, the first crises of world affairs were addressed and resolved by American leadership and American presidents. The initial surge of globalization was very unregulated, and it ended up in the calamity of the First World War. It was Woodrow Wilson, who after WWI made the first international attempt at global governance by establishing the League of Nations. After the world had descended into the Second World War, two other American presidents, Franklin Roosevelt and Harry Truman, used the sovereignty of the U.S. to build what I call Global Governance 2.0. Most of the institutions around the world that frame international norms and procedures today were actually established under the leadership of the U.S. -- the UN system and the Bretton Woods institutions: the World Bank and IMF, the GATT (now the WTO), and NATO.

AD: What are you looking for in current American leadership?

JG: I call for a new Roosevelt, somebody who sees that the task of the U.S. is to be proactive and fundamentally constructive in the international arena. The main task for U.S. leadership is not the war on terrorism; it’s not to lead the global economy. It is to build the next generation of global institutions that will begin to deal adequately with the range of global problems facing the world.

AD: It seems that the U.S. is doing exactly the opposite of what you are prescribing: the war on terrorism is the main policy component of the current administration.

JG: Indeed, so America is at a fundamental choice point. It is about how our country will be remembered and that will be determined by how we lead or not lead. If we could build the next generation of global institutions, we would make obsolete the need for empire at a national level, which is what the U.S. currently represents. The U.S. could go down in history as the final empire, which I believe is a much more elegant and historically momentous achievement than chasing around the world for members of invisible networks and building in the U.S. a national security state on the erosion of our civil liberties.

AD: What other lessons do you draw from your study of the history of empires?

JG: I discovered that certain empires could last an amazingly long period of time and others only an amazingly short period of time. The empires that lasted the shortest period of time have overaccentuated military supremacy. The empires that have lasted the longest -- like Rome, like Britain, like the Ottomans -- lasted because they combined military supremacy with building institutions that were perceived by the governed by and large to be fair. Wilson and Roosevelt, too, combined military and economic power with building international institutions and using international law, which were mostly perceived by the rest of the world as being fair.

AD: During your travels around the world, how do you view the current attitude of the international community to the current American policies?

JG: The international community shows an allergic reaction to this administration. The reason is not because this administration is conservative or Republican, but because it is deconstructing the international system as we know it -- an international system, as I just explained, which was built by previous U.S. presidents. This administration is marginalizing the UN, is disrupting the international rule of law, has invaded Iraq by violating international law, is seeding anarchy around the world, and is replacing international norms and procedures with what the administration calls the coalition of the willing. I think that this unilateral foreign and military policy and a complete obsession with the war on terrorism are causing a lot of anxiety and resistance around the world.

AD: Is this not too harsh of a view of this administration? People around the world have criticized U.S. administrations before, have they not?.

JG: First of all, I think what is going on among American allies is much more systemic and deeper than ever before. In the last 24 months the approval ratings of the U.S. have dropped dramatically overseas. Even in a staunch ally such as Canada, the approval rating of the U.S. has dropped by over 40 percent. Those polls are replicated in Europe, Latin America, and Far East Asia. Precisely at the point where we need a new Woodrow Wilson or Franklin Roosevelt, President Bush is spending more money on military expenditures than the rest of the world combined. The U.S. will spend next year over $500 billion on military procurement. In the meantime, all other major problems such as health, poverty, and the environment are not being addressed, neither here nor globally. It seems to me that the current administration is totally out of sync with a large part of America and the rest of the international community.

AD: Do you see any role for the international community or America’s old allies to influence America toward becoming the transitional empire you would like to see?

JG: It’s hard to say. Obviously in the upcoming elections, only Americans can vote. I think that, for example, Europeans need to follow their own principles and stand up against the Bush administration whenever they need to. Tony Blair is a demonstration of what happens to people who think they can use their special relationship with the U.S. to influence American behavior. Tony Blair has not influenced an iota of the Bush agenda. Rather, the Bush administration has manipulated Blair, and the UK and the world know it. I think Blair could have emerged as a real European statesman, but he didn’t understand the basic cynical motivation of the current administration.

AD: George Soros, someone you know well, has recently published The Bubble of American Supremacy, in which he takes a definitely partisan position, blaming the current administration and the Bush doctrine for taking the U.S. in the wrong direction. Do you agree that this is a partisan issue of Republican versus Democratic politics?

JG: I think it’s important to point out that Wilson, Franklin Roosevelt, and Truman were all Democrats. I think the Democratic Party has a deeper appreciation for the kind of multilateral institutions and the principles of multilateralism than the Republican Party. Republicans tend to emphasize military strength. Democrats reinforce the principles of collegiality. For example, under Bill Clinton, the U.S. experienced one of the most efficient U.S. economies in modern American history. At the end of Clinton’s second term, there was a huge government surplus and close to full employment, and by and large the world approved of U.S. policies. Then in less than four years of the Bush administration, we have gone to a hyper-militaristic mode, to some extent triggered by the trauma of 9/11, but largely based on a neo-conservative agenda. It is hard to ignore those historic differences.

AD: You speak of the necessity of new international institutions to deal with the current crises in the world. How do you see those institutions developing?

JG: Let’s just talk a moment about Iraq. It’s only a matter of time before the next Saddam Hussein, the next Adolf Hitler, the next Slobodan Milosevic arises somewhere in the world. The world community needs to use the failure of Iraq (or the failure of Kosovo, for that matter) to design a mechanism to ensure that the new Saddam Hussein is spotted early on, that the international institutions are alerted in the appropriate way, and that the international community can exercise the appropriate responses to ensure that we do not have more genocide or more massive erosion of civil liberties. The world did not respond in time to what was going on in the former Yugoslavia. The world watched Saddam Hussein for 10 years, and the international community did not react. In both cases the U.S. went outside the UN with various allies and took out Milosevic and Hussein. I believe that the invasion of Iraq was just as much a fault of an inactive and paralyzed UN as it was of a hyperactive and malevolent Bush administration. The essential point is that the international system designed 60 years ago is working less and less, and the U.S., as the founder of the UN, should make the UN relevant again for the 21st century rather than marginalizing it.

AD: In your book, you mention the establishment of the International Reconstruction Fund. What would be its role and what other kinds of institutions do we need?

JG: The more the world globalizes, the more human interaction takes place at a global level. We have to build those regulatory institutions at a global level that we enjoy at a national level. According to the IMF, one-third of the 200 nations in the world today are either failing or have already failed. Nations like Iraq, Afghanistan, Somalia, the Sudan, Yugoslavia -- the list goes on. We do not have any mechanism at the international level to help these countries. The international situation is eroding and getting worse. If we had an International Reconstruction Fund that had $20 to $30 billion at its disposal, it could start rebuilding these countries under international norms and procedures. Another example is the World Trade Organization, which works reasonably well. But it needs to be balanced with a global environmental organization. We also need the International Labor Organization to have as much efficacy and teeth as its counterpart, the WTO. We need a global Security and Exchange Commission to deal with international capital markets. For these initiatives to take form, we will urgently need visionary leadership from the U.S.

AD: It is clear you do not see that kind of visionary leadership currently in the White House. What would it mean to your ideas and proposals, or even to the current crises in general, if George W. Bush would be reelected in November?

JG: These ideas will be discarded by the new Bush administration, just like many other good ideas are being discarded right now. If the American people reelect him then I believe it will do irreparable damage to the goodwill and reputation of the U.S. abroad, it will do irreparable damage to democracy here at home, and it may be an administration from which neither the U.S. or the world will soon recover. The American people and the international community should be aware that George W. Bush won’t suddenly change his current policies and turn into a nice guy if reelected. A reelection will give him a mandate to deepen a neo-conservative agenda, which essentially is to establish military supremacy over the world for the next 50-75 years. That’s why I firmly believe that the upcoming election is the most critical one in our lifetime.

A Better Future with Globalization?

Interview with David Korten

Over the last decade we have seen tremendous economic growth and a technology boom in the US and Europe, but also growing tensions about the advent of globalization. Globalization means many different things to different people: the world becoming smaller through means of communication; a spreading of Western influenced entertainment and capitalistic culture; but also environmental issues such as global warming and a widening gap between rich and poor, North and South. One of the most vocal and intellectual opponents of the economic consequences of globalization is David Korten. Since Alexander Dake’s interview with Korten, demonstrations and activities against globalization have become commonplace at annual meetings of the international financial organizations and of international political summits. After September 11 the globalization debate entered a quiet phase, but maybe that is just the quiet before the global storm.

David C. Korten has 30 years of international field experience as a writer, teacher, and consultant on development management and alternative development theory, which he brings to bear in numerous works such as the well-known When Corporations Rule the World. He has Ph.D. and M.B.A. degrees from the Stanford University Graduate School of Business, was a faculty member of Harvard University's graduate schools of business and public health, staff member of the Ford Foundation and advisor to the United States Agency for International Development.Well-respected in the development community, Korten's publications are assigned reading in universities throughout the world. After fourteen years of residence in Southeast Asia, followed by a period in New York City, Korten and his wife, Frances reside in Washington State. There she is Executive Director of Yes, a Journal for Positive Futures, while he is the founder and president of The People-Centered Development Forum. Despite his impressive credentials as representative of the American economic and intellectual establishment Korten emphasizes that his many years in the developing world convinced him that the traditional economic model not only cannot solve the current worldwide crisis in economic and social development, but also is the cause of it.

AD: Are your attacks on capitalism and its consequences based on pure economic principles or are you using political ideology?

DK: Both, but there is also a spiritual perspective. And each of these perspectives comes to the same conclusion, which is that our global economy is out of control and performing contrary to basic principles of market economics. It is certainly against any political vision of a just world. From a spiritual perspective it is a denial of life and of the values of life and living systems. Actually I find the economic perspective the most interesting, because it attacks economics on its own grounds.

AD: Can you elaborate on the economic perspective?

DK: We are being told that globalism is the key to economic progress and efficiency and the triumph of the market over communism. My claim is that we do not have a market economy, but a capitalist economy. Capitalism and the market are presented as synonymous, but they are not. Capitalism is both the enemy of the market and democracy. Capitalism is not about free competitive choices among people who are reasonably equal in their buying and selling of economic power, it is about concentrating capital, concentrating economic power in very few hands using that power to trash everyone who gets in their way. That is not what Adam Smith envisioned. The first principle of the market economy is that it is comprised of many small buyers and sellers, which implies a substantial degree of equity. Another fundamental market principle is that costs are internalized in the producer’s price. The whole thrust of global capitalism is almost the opposite, by externalizing costs as much as possible: get as many public subsidies as possible, and pass off other costs to workers and the environment and anything else. This is not a market, and definitely not a democracy. The basic principle of democracy is one person one vote and in the capitalistic society, we have one dollar one vote. It is interesting to note that the 200 richest people have more assets than the 2 billion poorest.

AD: If you look at the US economy, which is your main target in your writings, it has experienced the longest economic boom in the last decade [which abruptly ended in 2000]. Mainstream economists use that decade and statistics from the UNDP that there has been a worldwide poverty reduction over the last 50 years as evidence that the capitalist system and globalism is working. What is your view on those “successes”?

DK: Global competition is about winners and losers. Till two years ago it seemed that the US was winning. Before that it appeared that Asian Tigers like Malaysia and Thailand were winning. If we go back some years Japan was the winning economic power. So, there is enormous instability in the global economy with a shift of winners and losers. It is a gross error to pick up on short-term statistics, to make judgment about the viability of one set of policies or another. If you look internationally over the last 50 years there have been improvements in the third world, but in the last 20 years the reverse has happened, with debt crises and increased poverty. The most dramatic indicator is the increase in inequality: the ratio of income of the wealthiest 20% to the poorest 20% was 30:1 in 1960; it was 61:1 in 1991; by 1994 it went up to 78:1. Moreover, statistics can be deceiving: the growth of jobs in the US in the 90s was due to many part-time jobs, with no benefits and generally low pay.

AD: Are you denying that the US economy experienced a real economic boom in the 90s?

DK: It depends on how you define an economic boom, but clearly only a small minority really benefited from that boom. If you look at the US economy over the last 15-20 years wages have been stagnating or even declining. Where there was an increase in US household income, that was because more people were working more hours, not because of an improvement in pay. Only the top 10% of the US working population actually improved its income. Wealth creation was even more skewed: between 1989 and 1997 86% of the increase in the stock market went to the top 10%, with 42% going to the top 1% alone.

AD: Are you attacking the mainstream economists purely on the basis of these statistics?

DK: No, because there is another distortion at work with economists. They assume that if the GDP is higher, the people are better off. That does not look at specific pockets of poverty in developing countries. My own experience in the third world was that even if people started to make more money, the cost of living and housing increased often faster than the wages. In order to find solutions to the increased poverty around the world, it is absolutely essential to keep the bigger picture in mind. Because many parts of the world are in such chaos, the US is perceived as a refuge. Money flows into the US, and inflates US assets, and allows the US to have a monstrous trade deficit. That means we are consuming more than we are producing. And what we are producing are predominantly financial assets, i.e. bubbles as we have seen in the Asia crisis and with the Internet and technology crash. When the bubble bursts, liabilities remain and a crisis starts. It remains to be seen how the US will go through the current period. But in the past, US companies have been able to increase their profits through downsizing in the US, through colonizing other people’s resources, and through the increase of globalization.

AD: Economists and financial analysts seem to have a bad record on predicting downturns or crashes, as we have seen with the Asian crisis and the Internet bubble. You have been quoted in the early 90s that you thought the Asian miracle to be superficial. Can you explain that?

DK: There was this dual economy developing in Asia. On the one hand, you have the sprawling airports, with duty free shops, luxury hotels and limos. That looks definitely like progress since the 60s. On the other hand, behind the façade, the majority of people struggled to get food on the table, have housing, transportation and schooling for their children. The more the modern economy grows, the harder life becomes for these average citizens: roads are built for cars, but the majority of people will never be able to afford a car; dams are built and thousands and thousands of people are being displaced and losing their livelihood; golf courses are built and only a handful of people will ever afford a membership. This problem relates to the question of money and to the understanding of the nature of money. Money is not wealth. Money is a claim on wealth. What we see with all these financial bubbles is that it is perfectly possible to make money without creating wealth. Money is a number. Real wealth is in food, fertile land, buildings, or other things that sustain us.

AD: But we need a measure whether it is money or statistics. How can we use those statistics if they are not really measuring what they are supposed to measure, i.e. wealth, economic well-being, quality of life etc.?

DK: First of all we should forget about GDP. Whether GDP goes up or down is irrelevant to the things we should be caring about. If our definition of progress is that the wealthy are getting wealthier, than we can measure progress in terms of corporate profits and stock prices. But we can also take the radical view that the test of an economy has to do with the extent to which it is providing everybody with a decent means of living. I find the so-called real world indicators, i.e. quality of air, water, plants, and animal life, also of great importance. This does not point to a socialist economy, but is about organizing the economy in ways that put people to work, give them the opportunity to build a livelihood, and increase the prospects of a beneficial future for them and their children.

AD: But again how do we measure quality of life?

DK: There are some initiatives about redefining GDP, but so far very little development. There is a movement which deconstructs GDP output: for instance the more guns you sell to children the more you grow, the more oil spills have to be cleaned up the more you grow, and that is supposed to be beneficial. Is it? The professional study of economics has become ideological brainwashing. It is a defense of the excesses of the capitalist system. It is clear that economists are making value judgments about these numbers. But when other more forward-looking economists try to develop new measurements, they are being accused by the mainstream of making value judgments. You can look at the state of the world’s fisheries, increasing deforestation, upsetting of the climate, the growing numbers of refugees. These are all indicators that help describe the full picture of the welfare of society and mankind.

AD: In your book Corporations Rule the World you describe financial transactions such as leveraged buy outs, mergers & acquisitions, asset stripping, currency arbitrage, etc. as part of what you call the financial rogue system. Proponents of these financial transactions, however, would say that these transactions help create more efficient markets, better prices for producers and consumers, and thus serve a positive function in our economy.

DK: The fact is that these bankers and traders are taking claims of wealth out of the system; they are not doing any productive work. In the field of currencies, currency arbitrage is actually a tax on people who exchange currencies for real reasons, such as travel, investments, etc. So what would be the benefit?

AD: Paraphrasing these proponents, they would say that the result is more stable currencies, instead of volatility. They also would claim that restructuring companies and selling assets results in stronger, more stable companies.

DK: You would need to look at each individual company to determine whether the company actually is becoming stronger. Obviously there are companies where management sits on its hands and something needs to be done. However, there are also companies with well-operating management, good company policies and responsible business practices. Still, if the stock price is low the bankers can make a case that that company is not well run. As long as you have a system that is based on the rational that if you are making money you are thereby making a contribution to society, these financial rogue practices will continue.

AD: What is your view on European societies, where they treasure their welfare state, but also have a strong internationalist tradition of support for international institutions such as the World Bank and the WTO?

DK: I would call this internationalism a kind of “naïve liberalism,” because the WTO and free trade in the end support the strongest forces, and that is Wall Street’s way of business. Europeans say they are proud of their social fabric, of strong rights for workers and the weak in society. What I would tell the Europeans, but also the Asians and the Latin Americans, is: keep the excesses of Wall Street out of your system. Wall Street sees a social fabric or social contract as inefficiencies, which need to be removed. In the US, most progressives start to see the differences between internationalism and economic globalization. Don’t misunderstand me. I am in favor of increased communication and cooperation between countries, but it is more important that each country becomes responsible for its own actions, its own communities, its own economies, before starting to integrate in large regional or global supranational organizations. From that standpoint, places like the US are too big. More humane societies are usually smaller, like the Scandinavian countries and Holland, where it is much easier to reach consensus and cooperation.

AD: What do you think then about further expansion and integration of the European Union?

DK: The EU will face problems similar to the US: an increasing gap between the citizens and decision makers in Brussels and a perceived or even real lack of democracy. The Euro is a case in point. Money is a mechanism for control. The further it gets removed from any kind of democratic process and the more it gets controlled by a small group of elite decision makers, the more it can become an instrument against democracy and free markets. We should be moving toward local currencies not global or European currencies. Not exclusively, but the bulk of our local economy should be covered by local currencies, which is more efficient than having global currencies which lose connection with reality in the markets, shops and communities of the people.

AD: You quote regularly Robert Kaplan [writer of the article The Coming Anarchy in the Atlantic Monthly] where he describes the situation in Africa with poverty, wars, chaos and diseases as the future for the whole Third World. Do you agree with his dire prediction?

DK: If you ask me to make a prediction that is one thing, if you ask me what the possibilities are, that is another thing. There is evidence of changes in perception by the people and even by several politicians. An example is the growing influence of the citizens groups (i.e. labor, environmental, churches, small manufacturers, consumer groups, students) that are against “free” trade and the unchallenged power of the WTO and the Bretton Wood institutions. This became clear in Seattle in 1999, Washington and Prague in 2000 and the subsequent anti-globalization protests. This is a real shift. It is somewhat reminiscent of what happened in the Soviet Union: internal pressure is rising and suddenly it can break through old structures. There is a huge shift taking place in the global awareness in the last 5 years with strong views about globalization and the power structures of major corporations. Look also what is happening in discussions about our food supply as evidenced by the mad cow disease or the GMOs and the acknowledgment that global warming is actually happening. More and more surveys in the US are indicating a change in values taking place among consumers, who become more concerned about quality of life, food, health and the environment. This has not yet crystallized in political trends or power shifts, but the momentum is building. If I would need to make a prediction I still believe Kaplan’s scenario is very plausible. It could become a scifi scenario where the world is organized in protected enclaves for the privileged people and an outside “Kaplan” world, where poverty, despair and disease flourish. The gated communities in the third world and in the US are already a sign of this development.

AD: Do you think the necessary changes will come from the people and not the political parties?

DK: There is no visible sign that the current politicians in the US are willing to see the need for change. There are actually very few US politicians who have integrity and vision. Al Gore tried to capture that position, but lost his credibility when he defended NAFTA against Ross Perot in 1992, and never managed to get his credibility back during his tenure as Vice President, let alone during the election campaign. It will take some time before a politician will capture the imagination of the American people and have the vision and understanding to do what is necessary for a better future for the people of America and the world.