Davos used to be the winners' club. Throughout the boom
years of the 90s and noughties company chief executives would gather every
winter high up in the Swiss Alps to discuss in a lordly fashion the world
economy and how it could be revised to suit their objectives and views: more
globalised, more marketised. But in the five years since the collapse of Lehman
Brothers (whose boss Dick Fuld was a Davos regular), the World Economic Forum
has taken on a necessarily less triumphalist tone. It might now be called the
failures' club. Not the losers' club, you understand: even amid the slump, the
wealthy continue to do rather well – as evidenced by Berkeley economist
Emmanuel Saez's finding that the top 1% of Americans saw their incomes grow by
11.6% in 2010, even while incomes for the bottom 99% rose only 0.2%. But the
economic model pined after by the Davos set is now bust; any lasting fixes or
reforms will have to come from very different places and perspectives.
No doubt Klaus Schwab and his WEF guests are at least partly
aware of that. True, the Davos gatherings may bear the same foot-dragging
titles as ever (This year's being "Resilient Dynamism", whatever that
means) rather than the more appropriate "We Got It Wrong". But the
usual mix of businessmen (four out of five delegates are male) and financiers
and government ministers is now spiced up with trade unionists, anti-poverty
campaigners and dissident economists. Sure, this must be an attempt to borrow credibility,
but it is also a stab at greater plurality. Yet clubs – which is what the WEF
is, formally – are inherently unplural things, especially Davos, which charges
£45,000 for basic membership and one-time entrance and £98,500 for access to
its private sessions. It is all very well for Mr Schwab to inveigh against
inequality; it would be more meaningful if he pushed the bosses at Davos to
sign a joint promise to limit pay gaps in their own companies. Fat chance of
that.
And yet the agenda of extending markets and stripping
workers of pay and conditions pushed at Davos (and by countless other
organisations, such as the IMF and the eurozone) is finished. Five years on
from the Wall Street crash, the world economy is still palsied. The GDP report
released in the UK this Friday will underline the mess made by the
austerity-pushers, just as much as the economic wreckage on show in Greece,
Spain and Portugal. And the latest indicators of slowing expansion in China
should put paid to any vain hopes that other cylinders in the world economy
would kick in. The only way out of the doldrums will be for the west to accept
that this is a crisis of demand, rather than supply – one that can only be
countered by big spending on jobs and raising wages. Again, there is little chance
of such solutions emerging from the Davos set, or of serious proposals for real
industrial policies.
But there is a more fundamental problem, too. The programme
of corporate-led globalisation pushed by multinationals is surely also
exhausted. The term "Davos man" was coined by the political scientist
Samuel Huntington. According to him, the members of this global elite have
"little need for national loyalty, view national boundaries as obstacles
that thankfully are vanishing, and see national governments as residues from
the past whose only useful function is to facilitate the elite's global
operations". Yet in the crash, it was governments that had to step in and
bail out their national banking systems – and then try to reflate their
domestic economies.
And as this era becomes more clearly revealed as one where
economic growth is scarce, we can expect countries to try to export more and
more to other nations. This is what lies behind the talk of "currency
wars" and "trade wars" – and it is only just getting going.
There will surely be much more naked mercantilism on display in the next few
years. The Davos set will oppose much of this. But by pushing a phoney,
inequitable globalisation, they have created the conditions for the backlash
against their own ideology.
Wednesday, April 03, 2013
مصطفى حميدو | Mustafa Hamido
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