Thom was at the Dubrovnik Conference: Transforming Culture: From Empire to Global Community Dubrovnik, Croatia, broadcasting live from the studios of Radio Dubrovnik, Croatian Radio and interviewed fellow speakers Frances Moore Lappé and David Korten.

Thom Hartmann talks with Frances Moore Lappé and David Korten, 7 June 2007

Thom was at the Dubrovnik Conference: Transforming Culture: From Empire to Global Community Dubrovnik, Croatia, broadcasting live from the studios of Radio Dubrovnik, Croatian Radio, and David Korten and Frances Moore Lappé were with him in the studio.

David Korten, author of When Corporations Rule the World and The Great Turning: From Empire to Earth Community (inspiration for the conference title). He co-founded the Positive Futures Network, which publishes YES Magazine, and was a major contributor to Alternatives to Economic Globalization, a report on sustainable alternatives published by the International Forum on Globalization. He holds M.B.A. and Ph.D degrees from Stanford University Graduate Schools of Business, has taught at Harvard, and served as a regional advisor for USAID. His work in third world countries opened his eyes to the consequences of economic globalization. In his new book, Korten outlines alternatives for sustainable and respectful living on planet Earth.

Frances Moore Lappé is the author of 15 books, including the best-seller, Diet for a Small Planet. Democracy's Edge, which focuses on how to transform a "thin democracy" into a vibrant, effective and participatory democracy, and Getting a Grip: Clarity, Creativity, and Courage in a World Gone Mad. She and her daughter, Anna Lappé, founded the Small Planet Institute, a non-profit network for research and education. Lappé is a recipient of the Right Livelihood Award and is a founding councilor of the World Future Council.

[Thom]: And welcome back. 34 minutes past the hour. Thom Hartmann here with you broadcasting live from Dubrovnik, Croatia, and special thanks to the folks at Radio Dubrovnik and Radio Croatia, who are allowing us to use their studios, and to Kris LoPresto and Lauren Kirschner in New York, who, and Gerald, and all the folks in New York who are making all this happen, and making it work; the connection, and everything else, it's amazing technology. In the studio here with me right now are Frances Moore Lappé and David Korten and first of all, welcome, both of you. Great to have you here, Frances.

[Frances]: Thank you Thom, I'm very happy to be here.

[Thom]: And David.

[David]: Thom, again always a delight to be on my favorite talk show.

[Thom]: Thank you. I think you're going to have to get a little closer to the mike. You have to get, you know, within 3 or 4 inches of the mikes here.

[Frances]: I'll have to hug David, here.

[Thom]: There you go, yeah. We're sharing a microphone, microphones. Let me start out, David, with you. Both of you heard the conversation that I was having with Steve Bhaerman a moment ago, and during the break you mentioned that this whole idea of regulating economies, I mean, you David, you're the author of 2 great books, "When Corporations Rule the World", and your newest one, The Great Turning, that really get to the heart of these issues, as do yours, Frances, and I want to get to you in just a second on that. But your thoughts?

[David]: Yeah, well one of the most fundamental principles of real market economics, in contrast to the neoliberal theory, is the fact that to operate efficiently in the public interest, markets have to have rules. Specifically, they need rules to main a degree of equity, they need rules to secure the internalization of cost, so you're not just passing your costs off onto society, and they need rules to prevent monopolies, so that you actually have market competition. And of course, the market ideology of the free market, that very terminology, is to try and cement the idea that there should be no rules on the market, which means no rules for money or for people that have money. And it's a very interesting aspect of democracy because you've got this constant competition between the idea of a one person one vote democracy in terms of the political power of the vote, versus the issue of one dollar one vote democracy which is really the foundation of plutocracy.

[Thom]: Right. It's not democracy at all.

[David]: It's not democracy at all. And that, I think, is one of the things that we need to wake up to, is the fact that most of the governing systems that we call democracy are in fact designed as plutocracies and they're about rule by money. So the terms, even the term free enterprise, or the free market, these are really political terms that are trying to distract our

attention.

[Thom]: Well, there's no such thing as a free market. I mean, it's very simple. Markets are created by people, markets are created by institutions, typically be the institution of government, and they have very specific rules, and those rules very specifically work to the advantage of certain groups. So when Franklin Roosevelt came along with the New Deal, for example, he said, "we're going to change the rules of capitalism in order to save it from itself". I mean, it's imploding. Look at the Republican Great Depression of the late 1929, early 1930s. And in order to save capitalism from itself, these are the new rules, you know, to paraphrase Bill Maher, badly. So.

[David]: One of the ways I think about it is, if you take the rules off of the market, have a free market, essentially the same idea that you have, you very quickly create not a market economy, but a set of monopolies which are non-competitive, they're actually non-market. It's this interesting thing, that if you don't have rules on the market, you basically instantly lose the market.

[Thom]: Right, and it's not competitive any longer; it is predatory.

[David]: Absolutely predatory.

[Thom]: In that context, I would say that laissez-faire or naked capitalism or raw capitalism or unregulated capitalism is the ultimate predatory tool for the predators among us, and yet at the same time, a regulated form of capitalism like we have in the United States to a certain extent now, and we had to a much greater extent, arguably, in the 1950s and 60s, when the Sherman Anti-Trust Act was actually being enforced, to some extent anyway, and on and on and on, reduces the predation and increases the competition, and thus, you know, the rhetoric of competition being a good thing actually becomes meaningful.

[David]: Yes, absolutely. I mean, competition is absolutely essential to the, to an efficient market economy, but the basic idea that Adam Smith articulated was much more like a farmer's market kind of competition, for the farmers get together, people trade in a market that is competitive and works fairly.

[Thom]: It was your book "When Corporations Rule the World" where I first encountered a reinterpretation of Adam Smith that caused me to go back and, you know, in school I had read pieces of "Wealth of Nations", I had never actually sat down and read the book, it's pretty dense. But I went back and I sat down and I read it and well, give your, if you don't mind...

[David]: Sure. Well, it's interesting. Clearly Adam Smith's view of the market is a market of very small players and one of the extraordinary things, I mean, the people who really understand Adam Smith note that he really wrote the "Wealth of Nations" almost as a tirade against corporate monopolies of the time.

[Thom]: Yeah, specifically the British East India Corporation. I mean, this was published in 1776.

[cross talk]

[David]: Absolutely.

And the other, the other, if you read it carefully, he's very suspicious of any combination of economic power that goes beyond a one person firm.

[Thom]: Yeah.

[David]: I mean, even the guilds of artisans and so forth, if there was two traders getting together, that was a restraint of the market.

[Thom]: Yeah, and his, the phrase, "the invisible hand of the market place" appears only once in the entire book, and it appears in the context of essentially a warning.

[David]: Yeah. It's a,

well I, it's actually as I read that one phrase, it's saying that essentially because the investor, the small business person, is investing where he lives, because that's the most convenient, where he can keep track of it, he is actually, he is contributing to the wealth of his community, but I think it also involves kind of the deeper background of his other book, "The Theory of Moral Sentiments", which is the assumption that he's functioning as a member of the community and observing community values, and valuing community interests.

[Thom]: Yea.

[David]: So, he really creates the business to make his own livelihood, but thereby he is serving community.

[Thom]: Right.

[David]: But it's a very clear set of rules.

[Thom]: Yeah, and that book, "The Theory of Moral Sentiments", is something that Libertarians and Republicans would like to pretend Adam Smith never wrote.

[David]: Yes, well.

[cross talk]

[Thom]: 'What, community? There's no such thing as community'. It's, you know, 'selfishness rules'.

Frances Moor Lappé, your book's Democracy's Edge, and you have a new one coming out, "Getting a Grip" and many people recognize you for your first book, many, many years ago, "Diet for a Small Planet", and the work around those kinds of topics. Welcome.

[Frances]: Thank you so much, and thank you David, I so agree with what you just said. I would just chime in here that part of the language challenge, and the conflation or the, you know, the fusing of the idea of capitalism which I think of as return to capital, return wealth, returning to wealth, and the market and actually I think progressives, and I hear David speaking, and you can correct me if I'm wrong, but that we are really pro market and that a system that is a one rule market that returns wealth to wealth increases such, creates such concentration that an open competitive market is dead. And so I feel so strongly about this and I just wanted to weigh in a bit more on language, that even the term regulation, unfortunately, I know what we're saying here, but the term, I think, puts fear in the hearts of people because it's been so propagandized.

[Thom]: Right. 'What, the government going to control me?'

[Frances]: Yes, yes, yes, yes. Actually, I was just on "Hardball" on Friday, where, confronting a guy who'd written a book called, "Mommy, Help! There's a liberal under my bed".

[Thom]: Yes.

[Frances]: And the essence of this was that this lemonade stand, child's lemonade stand, was going to be regulated by the liberals who were going to come in and force them to sell broccoli, right? So that the term regulation I'm tying to...

[Thom]: Katherine Debrecht wrote that book. I debated her on this program.

[Frances]: Oh, wonderful, wonderful. Well, I tried to, myself, instead of regulate, talk about standard-setting, because I think that the idea, and this is really what we're talking about, the role of government as setting the standards, and I was struck that even Thomas Friedman, in the New York Times a couple of weeks ago said that what we need, after he of course contradicts himself, because at first he talks about just all we have to do is wed Mother Nature and Father Greed to end the environmental crisis, but then he goes on to talk about setting standards.

the government setting standards, and I think really then we're, it's a, that's really the spirit in which we're talking, and only as the government sets standards against monopoly, against the externalizing of the cost, and all of those things, can we have then an open market, a competitive market.

[Thom]: Sure.

And we should define the externalization of costs. This is a phrase that, you know, those of us on the inside of economics are very familiar with.

[Frances]: Yes, I know.

[Thom]: And a lot of people go, "what? what's that?"

[Frances]: It means everything from the incredible health costs now that we are experiencing because of the degradation of our diet. One in every nine health dollars is now related to obesity-related diseases. It means the pollution in our waterways then creating a dead zone in the Gulf of Mexico the size of Israel. All of these things that we are collectively saddled with.

[Thom]: Right, and the biggest point is there is an externalizer; in other words, for example the, I've seen statistics that a gallon of gasoline, if we actually had the oil companies pay for the cancers caused by the pollution caused by our burning gasoline, that those health care dollars would add four dollars a gallon to the cost of a gallon of gas. So there's an external cost of burning gasoline of four dollars a gallon. That cost gets externalized by the oil companies. In other words, it's picked up by we the people, it's picked up by taxpayers, by society, rather than the oil companies themselves. So they internalize the profits, you know, and what's his name, the last CEO, walks off with a 400 million dollar, you know, golden parachute, and they externalize the the expenses. We'll be right back from Dubrovnik, Croatia. Frances Moore Lappé and David Korten

with us on the Thom Hartmann program.

...

[Thom]: And welcome back, Thom Hartmann here with you. An all star cast today. A bunch of us speaking here at the Praxis Peace Conference in Dubrovnik, Croatia. And David Korten and Francis Moore Lappé with me and I know we have a number of callers who would like to get into the conversation and get in on some of these issues. First, George in Hollywood, hey George, welcome to the program.

[George]: Hello, thank you for taking my call. I first wanted to mention that, think about the idea of this Iraq war. Everybody said freedom is not free, and perhaps responsible is a better word to put in there, responsible enterprise?

Where you think of others beside just yourself. But that's all I wanted to say about that because you guys were just talking about it. I would like to talk about politics, what your previous guest was discussing a little bit?

[Thom]: Sure, what Steve Bhaerman was talking about.

[George]: Yes, Bhaerman. He did touch on the possibility that politics in itself is not a dirty word, and in this civilization we have, we are political; that's our nature. And any time anyone tries to squelch that, I think, is being, you know, anti-human. The, at what point, in your opinion, Thom, is politics a dirty word and should be, you know, shunned?

[Thom]: Yeah, well, my take on it is that people who try to define politics as a dirty word are the people who want to control the political discourse. And, you know, they try to shut it down. It's a variation on the old political correctness thing, but, you know, that's my take on it, George. I'm curious if Frances, you or David want to comment on that. I think, Frances, you had some thoughts on that.

[Frances]: I do, I do.

[Thom]: George, thanks for the call.

[Frances]: First of all, we have no choice: not acting, not engaging, does not mean that we have no power. Our absence gives power to someone else. And so, really the only choice we have is whether, how we engage, or how we have effect because as I say, our silence is also effective in a way we may not wish. I was, I've been looking at the effect of the clean elections practice in both the state of Maine and Arizona, and in Maine, for example, I just encountered a woman who had been a single mom waitress who is now a legislator in Maine and part of the effort there that has passed a really revolutionary, I think, law that has changed the logic of the economy where by corporations who produce electronic equipment, have to take responsibility, responsible enterprise for the recovery and re-use of that. And so here is an approach that actually allows regular folks, in this case a waitress, to become a representative of the people.

[Thom]: This the voter owned elections, the whole idea the public financing of elections.

[Frances]: Yes, yes, exactly.

[Thom]: As is done in Maine and Arizona and in some communities; where I live, Portland, Oregon for example.

[Frances]: Yes, in some non state areas, yes, yes.

[Thom]: Yeah. Yeah. Excellent point, excellent point. Jean in Napa, California. Hey, Jean, welcome to the program.

[Jean]: Hi guys. I wanted to, you're having such a great conversation. You just mentioned politics and I get, it's not simply because politics are not innately corrupt, corruption is what corrupt individuals choose to bring to politics and I think that this is what happens with our use of words. We apply attitudes and interpretations over their actual definitions, and that's what we have to get straight. We have to start using words you know, from their direct definitions, and that's why I appreciate so much this discussion. What I called about was the suggestion that we replace the word regulation with the word standards and standardization and I don't think that term would set us up safely with the right. They would just interpret that as mediocrity and middle of the road goals, so I don't think standardization is a good replacement. So I'll get off and listen to your discussion. Thank you so much.

[Thom]: OK.

Thanks Jean. Frances, that was your phrase.

[Frances]: Exactly. I wasn't using the word standardization and I agree, certainly, a hard core ideologue is going to reject anything that I say, probably, but I think to reach more Americans, I think the word regulation has that kind of frightening idea that somebody's going to put you in a straightjacket, whereas I think, my hunch is, that more of us understand the need to set standards, and we do it all the time in our homes, in our work places. And it is, I think, a very uplifting notion that we have a standard in terms of education or how we raise our children.

[Thom]: The quality of our food.

[Frances]: The quality of our food.

[Thom]: The cleanliness of, you know.

[Frances]: The cleanliness of our... So, I'm not saying that we never use the word regulation, but I find that when I speak that there is more of a resonance with people when they talk about for example I often use a case, a wonderful story from Brazil where a very large city, the fourth largest city in Brazil, cut infant death rate by 56% in ten years, and they did this by declaring food a right of citizenship and then setting certain, they brought the community together so government played the role of convener and then set certain standards for what food sellers who were taking advantage of certain plots of very cheap land in the city selling fresh produce to poor people but they had to set the standard price at a low enough cost that poor people could buy it, and it worked.

[Thom]: This is where I think that, for example, in Oregon we tried to, unsuccessfully, but tried to amend the constitution to say that health care is a right and, you know, that's the standard notion in virtually every other industrialized country, is that health care is a right. And that lack of believing, or of explicitly stating that health care is a right, for example, in the United States is one of the big problems that we've had so far.

David, you wanted to weigh in on this.

[David]: Yeah, I think that the term standards is fine. I don't have any trouble though with the use of the word rules.

[Thom]: Yeah.

[David]: I mean, in every other aspect of society we accept the need for rules. We have rules you'll not kill your neighbor, you'll not steal, you know.

[Thom]: Maybe we should call them commandments; the new commandments of capitalism.

[David]: Yeah, I mean corporations shouldn't kill, they shouldn't be, we have rules so they don't put out poisonous products, they don't put toxics into the environment, they don't steal by misrepresenting their products, and they don't externalize their costs by underpaying workers.

[Thom]: Yeah.

[David]: You know, you're going to get somebody's labor, you should be paying a living wage that allows them to support themselves.

[Thom]: Amen, amen. We will continue this conversation with David Korten, Frances Moore Lappé, Steve Bhaerman and others from the Praxis Peace Conference.