Wednesday, October 25, 2006

David Korten on how we measure wealth

This is a continuation of my transcript of David Korten's talk in Columbus on October 14. Part 1 can be seen here.

David Korten: Modern societies have, for more than 50 years, defined progress in terms of economic growth, and we've been highly successful at growing our economies. Since 1950, global economic output has increased by some seven times, and made a great deal of money for a few people.

Now, there's another side to this story. The Living Planet Index is a measure of the health of the world's fresh water, ocean, and forest ecosystems. That's the life support system of the planet--and arguably the foundation of all real wealth. Think about it, if there's no life support system, there's no life. And if there's no life, the whole concept of wealth loses its meaning. Now this index, as you can see, has declined by 37% in the past 30 years.

We see here the divergence, showing the indicators we use to convince ourselves that we are making progress and getting wealthier, and the true index showing that as a species we are collectively getting rapidly poorer. This difference, of course, creates massive distortion in our public policies.

Now, the good news in this, at least from the perspective of the planet, is that the species responsible for this devastation will be gone long before the index reaches zero.

Now consider, as we are depleting this planet, that 85% of what remains of our planet's life support system, is currently expropriated by the more fortunate 20% among us, to support often extravagent and wasteful lifestyles. Meanwhile, the poorest 20% struggle for survival on slightly more than 1%, and the middle 60% get by on 14%.

One of the many lessons that I learned in my years abroad is that much of what we call development is actually a process of expropriating the land and water resources on which the bottom 85% depend for their livelihoods, in order to make way for the dams, mines, shrimp farms, agricultural estates, golf courses, suburban sprawl, and shopping centers that primarily benefit the top 20%. Now to put this in simple language, conventional economic growth indicators in fact measure the rate at which productive resources of the poor are being transferred to the rich, and converted to garbage.

Now, it's an extraordinary thing that we measure our progress, not by our well-being, but by the throughput in our economic system, which is basically the rate at which we are throwing things away.

Alternate link for comments