Mr. Professor!
I wonder how can such a small country like Hungary realize your conception? The USA can rule out foreign capital, but we can't. We must face the "revenge" of those who possess the global power, don't we?
It is a difficult issue for all countries. The starting point is to get clear on the kind of economy you want and to be clear on the implications of opening your economy to foreign investors and speculators. Then you can at least decide whether you want to provide various incentives and subsidies to attract as much foreign money and ownership as possible, or seek to the extent possible to favor local ownership. In making these judgments, I suggest you be clear that when people talk about "foreign capital" they are most often talking about foreign money, which is mainly useful in buying things from abroad. Very little of what we call "foreign capital" actually contributes anything to increasing the productive capacity of a recipient country. In many instances, what is called foreign capital becomes used as a form of consumer credit for buying imports, often at the expense of local producers.
What is your opinion about the theory of Silvio Gesell?
I am not familiar with this theory.
What is your opinion about the plan of Lyndon LaRouche's "Euroasian Landbridge" and the explosion of financial bubbles?
I am not familiar with the Lyndon LaRouche Euroasian Landbridge theory and or with his views on the explosion of financial bubbles.
The American youth of the 60's - in those days - recognized and condemned the economic and political immorality of their own country. Since then that generation has infiltrated into that power system without doing anything to make it more humanistic. Why did that happen so?
It is a very good question. Perhaps in their entry into the system they failed to recognize just how powerful the system itself is in shaping the behavior of those who work within it and were unprepared to resist it's enticements. There is evidence that in fact a very deep shift in cultural values is taking place in the United States and elsewhere toward more socially and environmentally compassionate values and that the roots of it trace back to the movements of the 1960s. It is not yet evident in the media or the politics, some of us believe that a potential dramatic spiritual and political shift is in the making.
Private property involves responsibility. Can this responsibility be coerced (i.e., can people/institutions be forced to act according to that responsibility), and if yes, how?
You are right in the sense that private property should involve responsibility. Part of our problem is a neoliberal ideology that maintains those who own private property have no responsibility to anyone than themselves and that the law has no business interfering with their presumed "rights" to do with their property as they wish. It is a recipe for disaster, as its current practice demonstrates. The social and economic efficiency of a market economy must be built on the foundation of an ethical culture and there must be enforceable rules to constrain those who prove unable to exercise responsible self-restraint in the interests of the community.
Mr. Korten! Henry Kissinger has recently written the following: thanks for the behavior forced by the IMF on countries, the brutal decline of welfare, the exponential growth of poverty and unemployment can be statistically calculated. Who will be called to account for this? Who and how will compensate the victims? Are those who have caused this able to change their way of thinking, can they change their behavior and can we trust them?
I am not familiar with the Kissinger statement to which you refer. I see little evidence of change in the thinking or behavior of the persons or institutions that have had the most active roles in creating the suffering and I would not advise trusting them. Many who have been involved, however, have simply been engaged in performing the jobs they are paid to do, without either conviction or malice. Fortunately, those who have done harm out of conviction or malice are relatively few. Hope for the human future rests with the possibility that the rest of us will eventually wake up to our complicity and chose a more responsible course.
Is it important to co-operate with radical ecological or other grass-roots groups already fighting for a different world?
I consider it very important. This is specifically why I devote a great deal of my time and energy to a group called the Positive Futures Network, which is about helping people recognize there are great many such groups and them to get involved. Check it out on the Web: http://www.futurenet.org.
To improve our situation people's responsible thinking is necessary. How can we bring that back?
The starting point is education as to what is actually happening and to the fact that a society cannot long survive without personal responsibility.
How can we persuade mankind to "create" given that nowadays the greatest virtue is "consumption"?
Consumption is a fabricated virtue constructed by the corporate advertising media to serve an end not our own. Many of us who live in consumer societies have come to realize that self-directed creation brings a far deeper sense of self and personal well-being than mindless consumption in response to the manipulations of advertising.
Considering the fact that global corporations, with the mass media in their hands, have such a huge power, how can we shake and wake up the masses of people?
We must proceed with a deep faith in the ultimate inner wisdom of ordinary people. The awakening is happening. We can each help advance it by being true to our own values and having the courage to speak the truth others feel in their heart so they no longer feel alone.
Do you think the foreign debt of Hungary can be rescheduled to let the economy have a minute to breathe?
Surely it can be. Whether it will be is a political question. I suggest that your first order of concern be with stopping the growth of the existing debt. Until you've brought the growth under control it is almost certain that any rescheduling or other debt relief will simply open the way to additional borrowing that will quickly wipe out any breathing space a debt rescheduling might provide.
What kind of fiscal policy do you suggest for Hungary?
That is to broad a question for me to attempt to address here.
How could you determine the optimal size of a corporation from the aspect of applying high-tech? Why doesn't the Anti-Trust Law help solve the "growth of enterprises" problem?
Most of the real high-tech innovation comes from very small firms. In terms of using high-tech, it rarely requires a large firm. I am part of a two person organization and we use a great deal of high tech equipment.
Perhaps the biggest reason Anti-Trust law is doing very little to limit the growth of firms is because governments no longer take it seriously. To the contrary, most buy into the argument that for a country to compete globally, it must encourage its own corporations to grow to a size that allows them to dominate foreign markets. In the United States the main test of Anti-Trust is whether size harms the interests of consumers. We have lost sight of the fact that large corporations become a threat to democracy and the self-correcting dynamics of a market economy.
To establish a genuine market economy wouldn't it be enough to make the decision making process of the large multinational corporations democratic? How would this process affect the criteria of economic efficiency?
The very idea of a market is that it involves the interaction of many individual decision makers making their own economic choices. It is possible to create a multi-national in which the individual units relate to one another as individual enterprises and treat each other exactly the same as they would treat any other independent enterprise in a market situation. The one difference is that the headquarters can at any time of its choosing over rule any decision made by an independent unit--even to the extent of disbanding the unit.
To be truly democratic and have a market economy, the appropriate action is to break the larger corporation into independent firms owned by their workers and other stakeholders and accountable to them for their operations.
Since the appearance of Tinbergen's econometrics we are more or less able to follow and control the main events of the economy. A solid goal is to avoid a world-wide crisis like the one in 1929-1933. Do you think it is possible to determine the minimum size of export-import activity that is necessary among countries led by legitimate governmental decisions?
It is very difficult for any government to control the national economy if its borders are entirely open to the free flow of goods and money. The first step toward reclaiming one's own economy is to recognize that economic borders are necessary. With regard to a minimum level of trade activity, I wouldn't frame the question in those terms. I would rather focus on two things. First, keeping trade balanced so that I do not develop either trade surpluses or deficits. Second, I would give preference meeting as much of domestic needs through domestic production as feasible and trade at the margin.
What can we do about the IMF loans being given today and inherited from the past? How can we break out from the circle?
Insist on the need and your right to regulate speculative flows of money in and out of the country and to insure that any foreign investment actually serves national priorities. Most of the Asian countries got into trouble by giving free reign to banks and financial speculators. Give priority to domestic production over imports to avoid building up foreign obligations. And make clear to foreign bankers and to the IMF that the Hungarian government believes in the importance of market discipline and will not assume the private debts of borrowers in default.
While recognizing that it is difficult, if not impossible, for an individual country to repudiate an IMF loan, civil society organizations can work to establish that most IMF loans fit in the category of odious loans that create illegitimate public financial obligations outside of normal appropriation and public oversight processes and that a country should have no obligation to repay them.
In your book you emphasize the importance of local economies and decentralization. However, in some cases efficiency calls for big, centralized organizations (due to the economies of scale). We know that efficiency is not always the result of creating big organizations but in many cases efficiency is indeed the result. How would you solve this problem?
There may be cases where there are true economies of scale of sufficient magnitude to justify having a very large organization. I suspect they are more rare than generally recognized. At present we have a system that simply assumes that bigger is better. I suggest we turn that assumption on its head and assume instead that for reasons of democracy and market competition smaller is better. Leave it to those who believe that in the case of a particular industry or technology big is essential to the public interest to prove their case.
How do you imagine the change of the capitalist system? If the change has to be done through political action, what can a single government do when corporations have greater power than any government? If a government introduces "anti-corporation" regulations, corporations move to other countries with better circumstances and, thus, lots of jobs will be lost. How would you stop the unhealthy competition of governments for business interests?
It requires re-establishing national economic borders and recognizing the right of a people through their government to regulate imports. This is best accomplished through cooperation among citizen movements in many countries working to reclaim democratic control of their governments and insisting that governments every where rewrite the rules of international trade and investment to protect the interests of people rather than the interests of corporations. This will surely include re-establishing the right of each people to manage their economic relations with other peoples, rather than giving over this function to global corporations.
Our world is becoming more and more open nowadays. Doesn't that process require the existence of multinational businesses as well?
In a global economy the largest corporations are transnational, rather than multi-national, as they do not recognize any national interest. That said I would turn your statement around. Open economies do not require transnational corporations. Rather transnational corporations require open economies that allow them to move freely without restraint to capture quick profits where ever an opportunity presents itself. The question is whether this kind of openness serves the interests of people and communities--or only the interests of the wealthy elite that transnational corporations predominantly serve. The evidence suggests the latter.
Hungary is striving for European Union membership. What is your opinion about the EU from the globalization point of view?
Given Europe's long history of warfare I can understand why European union is attractive for many Europeans. On the other hand, the move to the EU is a move toward the homogenization of national cultures and the centralization of power in institutions far removed from individual citizens. I sense also that the European central bank is likely to be more powerful than the European parliament, which means that power will shift from away from people and toward the central bankers. In the end, I suspect that European Union is likely to lead toward a consolidation of financial and corporate power and interests at the expense of democracy and the interests of ordinary people.
On the basis of present reality what kind of world do you envisage in 100 years? What will happen to China and to the USA?
I don't deal in predictions, only in helping people see their choices more clearly. I can say that if we continue on our present course, it is very likely that sometime within the next 100 years we will experience a series of major environmental disasters and a collapse of the institutions of civilization that together will threaten the very survival of our species. We need not, however, continue on our present course.
Currently many people live in a fantasy world which, they think, operates satisfactorily. (They swallow with what they are being fed and believe it.) What strategy do you suggest to approach those people to help them realize what they eat causes cancer?
Simply speak the truth as you know it at every opportunity and have faith in people's inner wisdom.
Your book is a very good conclusion, but what is the solution?
I've spelled out there a number of the actions that I believe will lead us in a more positive direction. You are obviously looking for something more, but I'm uncertain as to what sort of response you might find more satisfying. Take a look at my new book The Post-Corporate World: Life After Capitalism after it comes out in March 1999. It gives a lot more attention to solutions.
How can we achieve national development without national (domestic) capital at our disposal?
This is a longer discussion. For starters you might ask what you mean by national development. What is it specifically that Hungary now lacks for which you long? What is it you need to fill that void that you do not now have and can only have by buying it from abroad? Avoid vague words like national capital. The word capital is often used as a synonym for money. I presume you do not intend to say Hungary does not have enough Hungarian currency, because if that is really your problem it is easily corrected. If you need foreign currency, then it is presumably to buy something. So be clear on what you want to buy. Also, consider the possibility that Hungary is already quite developed in terms of most things that really matter. In many respects being more developed will largely mean have more pollution, traffic congestion, and garbage.
How do you evaluate the continuous expansion of the European Union? Note: striving for EU membership has been a central pillar of the policies of all Hungarian governments for the last decade.
See my answer to the EU question above. I think that once we make the transition from the goal of winning in the global economy to creating livable communities we will find our challenge is to break up the largest countries into more governable units, rather than to consolidate medium sized countries into very large countries.
What would you suggest the Prime Minister regarding Hungary's joining the European Union?
I do not have enough knowledge of the specific's of Hungary's situation and its relationship to the rest of Europe to offer a definitive recommendation. In principle, however, I would approach any decision to join the European Union with great caution and look closely at the option of maintaining Hungary's national independence. Joining the Union is basically to opt for an economic model dominated by the interests of global corporations and financiers. If you have aspirations of having a just, sustainable, and compassionate society I suspect the prospects are better if you stay out of the union.
How will the current financial crisis influence the future of the Multilateral Agreement on Investment (MAI)?
Certainly it should be clear to anyone who takes the trouble to look at the causes of the current financial crisis that the kind of financial deregulation that MAI would advance is reckless and fool hardy. Unfortunately, it seems that those who are promoting the MAI are so blinded by their greed and ideological commitment that they do not see this. Most ordinary citizens have a much clearer view of the reality and are able to recognize almost instantly that to move ahead with the MAI would be an act of collective insanity. The financial crisis has given substantial impetus to citizen groups to mobilize against the MAI in all its forms and to engage in public dialogues on the kind of economy they really want. As public awareness grows it should become possible to kill the MAI in all its guises and turn the process around to begin working for international rules that protect the interests of people and communities--exactly the opposite of the MAI and the various so called "free" trade agreements.
You lived half of your life in Third World countries, thus, you probably know very well the difficulties of obtaining rare books from the U.S. Will, by ANY chance, your next book be available in full length on the Internet?
A good and fair question, though hopefully The Post-Corporate World won't be a "rare" book until many years from now. The rights to put the book on the Internet belong to my publishers and unless they can find a way to
recoup their publication costs through its Internet publication, I fear the answer is no.
We fully agree, that an extraordinarily serious crisis is threatening the world and that the current system is responsible for that. However, we wonder if you can mention the positive features of the capitalist system, if there are any.
It is very effective in creating billionaires. Do be clear that I draw a clear distinction between a capitalist system and a healthy market system. The former is a form of social pathology and few pathologies offer advantages to those they infect. The latter has many advantages spells out in detail in my forthcoming book.
What are the driving forces of a true "market economy"? What makes it moral? This idea is not just a surviving notion of socialism, is it? This conception of having a Third Way is not naiveté, is it?
By a true market economy I refer to the kind of market economy described by market theorists going back to Adam Smith. As you may know, Adam Smith was a moral philosopher deeply concerned with the moral sentiments of humans. By my reading, he assumed that the market economy functions within the context of an ethical culture in which most people are inclined to deal with one another fairly and honestly. Market theory also recognizes the need for regulation and the necessary role of government in providing public goods and maintaining the rule of law.
A real market economy is about self-organizing processes through which people engage in mutually beneficial exchanges in pursuit of their individual and collective livelihoods. It is most definitely not about government ownership of all productive assets. Nor is it about government's centrally planning economic affairs. It is about people owning real shares in the enterprises they depend on for their livelihoods and organizing economic activities in response to their own self-defined needs and entrepreneurial drives.
Given the disastrous failures of ways one and two, I certainly hope that the idea of a third way is not naive. Indeed, considering the evidence that finding a third way is essential to our survival, it seems to me to be highly pragmatic. Do be clear what I'm talking about has no evident relationship to what Bill Clinton and Tony Blair have been calling the Third Way.
Does it worry you, Mr. Professor, that your ideas are often to be found in the programs of extremist politicians? What can be the reason for that? Is it possible that you have not yet experienced governmental support of your ideas because you have not sufficiently gone eastward? Unfortunately, these ideas are all too familiar to us here.
In my experience the substantial majority of people don't consider concerns for human freedom, democracy, equity, participation, personal and community responsibility, and care for the environment to be extremist. Nor are they uniquely Western ideas.
The questions are translated by Kálmán Dabóczi.