Book review

2:   When Corporations Rule the World

David C Korten Kumarian Press, 2001

I have at last read the much-quoted, much praised When Corporations Rule the World by David C Korten, second edition, 2001, borrowed from the local library. I can strongly recommend it both to advocates of monetary reform, and to those sceptical of the need for it.

The range of topics covered, and the links between them, as well as the reforms advocated, are too numerous to cover in any detail in a short review, but linking them all is the manipulation of the debt-money supply; though this is not given the prominence in his narrative that it deserves.

Korten quotes abundant, powerful evidence of the use of political lobbying by corporations to buy favour for themselves, with rich rewards at the expense of society and environment.

He is well aware of the fact and the way that banks create money, and its use in corporate take-overs, in gambling in the stock exchanges and in derivatives and foreign currencies, with the result of ever-increasing extremes of wealth and poverty, and divorce of the use of money for ‘wealth creation’ from the real, productive economy. He notes, for instance, that "From $1.5 to $2 trillion dollars now change hands daily in the world's foreign exchange markets. Only some 2 percent is related to trade in real goods and services. In January 2000, before a market correction brought many high tech stocks back down near earth, 170 Internet firms that had gone public since 1995 had a combined stock market valuation of $600 billion on total revenues of only $8 billion."

He does not, however, primarily aim to reform this system, instead putting his main hopes in the rise of the global awareness of the iniquities of ‘corporate rule’ and the growing global movement for social justice or ‘living democracy movement’, aided by the modern ease of communication by telephone, fax and internet. In this he is in company with such as Bernard Leitaer and Thomas Greco, who advocate alternative currencies as fall-backs when the inevitable global collapse of the ‘house of cards’ which is the money system eventually occurs, as they regard it as being too strongly entrenched for reform to succeed.

His own ‘Agenda for Change’ includes ‘reclaiming our political spaces’, demanding that public elections be publicly funded, with limited total campaign expenditures and informative media coverage of all candidates for election; antitrust legislation to break up media ownership; and measures to reduce persuasive advertising and banning it from schools. He advocates a financial transactions tax and graduated surtax on short-term capital gains, and notes but does not emphasise the case for a 100% reserve requirement on ‘demand deposits’ (current accounts), referring erroneously to a ‘Henry C Simmon, in 1948’ arguing for it. (Frederick Soddy proposed it in 1926, Henry C Simons in 1933, and Irving Fisher published a book on it entitled ‘100% Money’ in 1935).

Further, he wants localisation of production and supply, tight regulation of financial derivatives, preferential treatment of community banks, rigorous enforcement of anti-trust laws, with worker and community buyout options, and tax shifting, from activities which benefit society to those which damage it. Welfare should be shifted from corporations back to people; and restriction is needed on the extent of ‘intellectual property rights’. He also advocates citizens’ incomes, progressive income and consumption taxes, and ‘pay equity’ – setting a maximum permitted ratio between highest and lowest pay within an organisation.

The growth in numbers of the ‘cultural creatives’ in the USA that he documents, and of the worldwide ‘living democracy movement’, are both hopeful developments; but missing from his analysis is the worldwide growth of debt (not just ‘third world’, which he does cover) due to the money system, and its dominating role in driving ‘economic growth’ as well as enslaving the vast majority of people to their ‘employers’.

Despite these reservations, I can strongly recommend this book to anyone else who has not already read it!

Brian Leslie