Dear David:

Greetings. I’ve been through your essay several times. Inspiring…

There is so much there, and I love so much of it. I also believe it is a wonderful start for a collaborative effort among several key thinkers on a statement of the current predicament and opportunity. The wonderful thing is that, by addressing the big picture, you have created space for everyone to contribute.

Basically, you are creating a contrast from an age of Empire and one of community, emphasizing cooperation on all levels to support life, showing how there are biological examples for this transformation, pointing out signs that we not only have no choice but to move in this direction, but also that the technological and social signs (Cultural Creatives) have evolved to the point where the transformation is tangible. Then you begin to define what the change is–an area that is most critical for us to be focusing on  together –namely, defining the make-up of viable ecological, just and sustainable economies, beginning locally and linking and aligning them globally. So much of your text in this area is exceptional. I’m hoping you will elaborating particularly in the area of helping people to visualize the “the how and where to go” toward establishing the living economy.

The following are other key points others might help us elaborate.

  • Replacing hierarchy with more democratic, efficient and innovative networking modes.
  • Place-based, human scale, stakeholder owned, life affirming enterprises. I believe this critical area needs more development. I love the beginning of your section, Living the Future into Being, where you describe the seeds of the living economy taking place. If we can evolve this, with references to how these, now unconnected developments might become connected, intentionally, the vision for the living economy, with local roots, begins to take more form.
  • Local currencies. These may be critical. One way to link living enterprises with committed consumers is through their accepting, at least in part, currencies that are tied to certain values. Complementary currencies that are interest free, or carry a sustainability fee may be a key to strengthening local economies against the pull toward an uncaring globalism, and they foster cooperation over competition while fostering a better distribution (rather than a concentration) of resources.

Somehow, the local emphasis, which deserves further articulation (which I know you are ready for), needs to be balanced with global realities, global markets, and some of the questions you allude to but don’t fully answer: How do airplanes get built if not by very large enterprises? Also, I’d love for Elisabet to comment on your statement that “Mature ecosystems seek local self-reliance within a nested hierarchy. Is the “local” part of this equation universal? Is it essential and appropriate for humans?

[Korten comment: Creating rooted, substantially self-reliant economies is essential to restoring/building real human communities, achieving efficient adaptation to local environmental circumstances, and eliminating the substantial and needless environmental costs of cross shipping basic commodities around the world. In a world of living economies there will be trade, but probably a whole lot less than in the present world. For example, bottled water would not be traded back and forth between France and the United States. 

The appropriate goal at the global level is to create a framework that supports people at local and national levels in the living into being of local and national living economies. This calls for rules that favor human rights over corporate rights, local finance over global speculation, local ownership stakeholder ownership over foreign absentee ownership, equity over concentration, and local trade over global trade. The framework currently advanced by global corporate interests and by institutions such as the WTO, IMF, and World Bank that serve them is nearly the mirror image of the framework appropriate to living economies. The idea of nested holarchies — in contrast to hierarchies — is consistent with biology and with the principle of subsidiarity, which calls for placing decision making power at the level of the smallest holarchy feasible. That maximizes the potential both for appropriate local adaptation and democratic participation.

As for the question of how airplanes will be built, in a proper living world there will be a lot less physical movement of people and goods and substantially less need for airplanes, which are highly inefficient and environmentally destructive modes of transportation. Most long distance communication would be electronic. A much higher percentage of physical interactions and exchanges would be local — within the context of a rich international information environment. The preferred model for production of necessary large-scale capital goods would be a system of decentralized manufacturing networks through which stakeholder owned, human scale enterprises produce components for final assembly and marketing through larger facilities that they jointly own. This really isn’t that much different than the present practice of contracting out the production of components to small producers, except for the critical difference that ownership is distributed among the participating enterprises rather than being centralized in a controlling hierarchy that almost inevitably uses its power to maximize short-term profits for the center at the expense of the contractors. 

The starting point, however, for living economy initiatives is not to localize the production of airplanes. Rather it is to localize the basic necessities of daily life — such as food, energy, clothing, finance, local transport, education, and basic holistic health care.]

Perl: Also, what do you mean by stakeholders? Do you envision a new commons that is a trust for all, as distinct from individuals who are directly affiliated?

[Korten comment: By real stakeholders I mean people who have a direct non-financial interest in the enterprise and its operation, specifically workers, customers, community members, and suppliers. There surely would be commons, but commons must also be managed by some set of rules, which means for practical purposes they are held in common under the auspices of the democratic governments that fashion the rules by which they will be used. Reliance on impersonal aggregated pools of independently managed money for financing should be avoided to the extent possible as it inevitably creates concentrations of power delinked from moral sensibility and accountability that is a defining structural characteristic of the suicide economy. 

The central concern of the “Living Economies” essay is with how to focus business on the good of all. Linking ownership to real, actively-engaged people on an equitable basis is one structural key. The challenge in managing any commons as a shared trust to structure the decision making processes in ways that make them democratically accountable. Bear in mind that a defining difference between Empire and Community, Suicide Economy and Living Economy is the shift from hierarchy to networking as organizing principle.]

Perl: On the biological analogies, I’m hoping that we can get Elisabet to give us a tight description of the butterfly story, which you reference but don’t detail. To me, at least for a collaborative piece that covers so many other points, the butterfly example serves better than does the Type I, II, and III analogy. One is left with questions as to whether there are examples of all three types among mammals, what happens to Type II’s in our new world, and whether one needs (natural?) “devastation” of some sort to maintain new territory for Type Is. The power of the butterfly example is that the metamorphosis, the phase-shift, references a struggle between a dying immune system which goes destructive to its host, and a new one which is uncertain of success but increasingly takes presence, in our reference, the Cultural Creatives.

When you get into some points, like optimizing every resource, it’s the place to get the details and input from our natural capitalism, ZERI and others on the “how”. Then, you could tie that nicely into your wonderful section on the “satisfying way of living: secure, satisfying work relationship, breaking free from compulsive shopping to become conscious mindful consumers->global cooperation for love of life and nature. I’d love for you to consider expounding on the life, not money, values which drive a living economy. Perhaps Meg Wheatley might build on your powerful points about how an emergent self-organizing process of mutual learning, negotiation and adaptation “lives” a living economy into being.

[Korten comment: Interesting. I’ve not heard the butterfly example taken that far. Even so I remain of the opinion that from a systems perspective a functioning economy has a greater resemblance to an ecosystem than to a butterfly and the process of natural succession is the very foundation of the core strategic argument of the “living economies” thesis. Remove that and I think you remove the strategic frame and slip right back into the basically futile exercise of trying to jaw bone institutions imbedded in the emergent system of the suicide economy into reforming themselves from within.]

Perl continues: You conclude with three recommendations: Grow the web, ground it locally and walk away from suicide economy institutions. To make the last point viable, we need to establish the alternative sustainable/restorative economy which has strong local roots from which committed people can consume; right now, most of us have no choice but to purchase most of our consumables from companies that are largely contributing to the problem. To grow this living economy, a new level of commitment from producers who would sustainably create what aligned people would purchase/consume, we need to “grow the web”, or in my terms, garner an unprecedented commitment from consumers. For me, this leads to the notion of creating investomers, people who commit to consume from, and perhaps help capitalize, an array of enterprises, thereby allowing the enterprises to produce in ways that meet increasingly strong sustainability and justice standards; this ties nicely into committing to/participating in local initiatives (and currencies). And the commitment, I believe, goes beyond food, energy and daily products, to health care, banking, insurance, media, education, housing, etc. All of this needs a strong local component, which is consistent with chaordic organization, but there is a level upon which values based global coordination is required, and the thinking and infrastructure to empower that coordination is fortunately within our grasp (and network).

[Korten comment: Good point. I will add a fourth item buying local from living enterprises. There is also room to add separate essays going sector by sector, ultimately covering virtually every sector. I believe colleagues at Friends of the Earth in the UK are working on this. The idea of people holding ownership stakes in enterprises from which they buy is well established in consumer cooperatives. It is a sound idea wholly aligned with the idea of customers as stakeholder owners. My concern is that the exercise of ownership rights does not get overly consolidated and centralized in a pooled fund that begins to look like a mutual fund in which owners have no real idea what enterprises they own or what they do. The ideal in my view is direct ownership participation in specific enterprises.]

Perl: With gratitude and inspiration,


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Posted July 21, 2001