Valuable Main Street lessons

This is a teachable moment.

So I called David Korten because I knew he'd be ready with a lesson plan.

For years the Bainbridge Island author and lecturer has been challenging the present economic order."It is an illusion that if you are making money you are creating wealth," he said. "Real wealth is created by investing in the human capital of productive people, the social capital of caring relationships and the natural capital of healthy ecosystems."

That may sound to some people like feel-good, blue-state dreaming. But Korten sees it as a return to old-fashioned values.

Korten says he grew up with conservative values in Longview, where his father ran the family business, a combination music and appliance store.

An Air Force officer during the Vietnam War, Korten has an MBA and a doctorate from Stanford's business school and taught for several years in Harvard's business school.

What he rails about is not the bank on the corner, but the guy in a penthouse in New York buying and selling paper. His criticisms are shared by far more people now. Hardly anyone with a functioning brain still thinks the current system is fundamentally sound.

Korten spent 30 years in international development, moving from country to country and seeing the impact our economic system was having elsewhere. "That was my education in how our existing economic constructs don't work."

He came back to the United States in 1992, trying to understand "why the system tends to work in such dysfunctional ways."

From his exploration, he produced a book, "When Corporations Rule the World." And he realized it wasn't just poor countries that were being hurt by flawed institutions.

He also decided he needed to do more than criticize. Korten co-founded two groups that advocate for change, the People-Centered Development Forum and later, the Positive Futures Network, which publishes YES! magazine.

In the latest issue, he has an article titled "Main Street Before Wall Street."

"The only real justification for Wall Street is to support the activities of Main Street," he said.

Main Street is where people produce, distribute and consume real goods and services. It's where real wealth is created and where business activity, at its best, is rooted in community.

But today, where Wall Street and Main Street interact, Wall Street is a predator, Korten said. It buys businesses to break them up and consume their assets, and it turns home loans into fodder for speculators.

Even now, banks that operate the old way, taking in money and making reasonable loans to people in their communities, are doing OK.

Washington Mutual was a sound institution back when it really was a "friend of the family," smaller and focused on the communities it served. It stumbled when it became a subprime-loan player.

Will we learn some lessons from this mess? Only if we were willing to retool our institutions and our culture to produce a healthy economic system that works for all of us.

Cooperation is as much a part of our nature as competition.

Jerry Large's column appears Monday and Thursday. Reach him at 206-464-3346 or jlarge@seattletimes.com.