Last October as the Group of Seven, The World Bank and the International Monetary Fund gathered in Washington, the New York Times quoted a senior World Bank official as stating “ There’s no question the Washington Consensus is dead,” it “died at the time of the $700 billion bailout.”
Fast forward to Davos Switzerland (Jan 28- Feb 1), and the annual meeting of the World Economic Forum (WEF). While many of the bankers that attended the Washington meeting apparently stayed away, the somber mood in Davos was even more depressed as they mourned the collapse of the world economy.
It was good while it lasted, the food, the wine the parties. Had their economic bubble not popped last year, considerably more Chateau Petrus would likely have been uncorked in Davos. The opulence of old would have been flaunted and the parties would not have been kept hidden.
The World Economic Forum was founded on the dream of globalization, an unrestricted market economy and their unquestioned ability to bring prosperity to the world. While prosperity has increased, we must ask, whose prosperity?
Recognizing their shattered dream, Klaus Schwab, founder of the WEF noted “we are all in some way responsible for not recognizing the risks of a world completely out of balance.”
So, how about taking some responsibility for getting the world completely out of balance? How about some responsibility for developing and supporting economic principals that steadily widen the gap between rich and poor?
Chinese Premier Wen Jiabao blamed the economic crisis on US consumer splurge and irresponsible lending, the “lack of self-discipline and blind pursuit of profit.” True enough, but that irresponsible lending and consumer splurging also fueled China's economic boom. Why weren't they complaining as we sent our manufacturing jobs to China?
If only those in Davos had shown some sense of responsibility, an admission that they had failed the system instead of crying that the system had failed them. Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy in Singapore told the Associated Press, “Everybody's lost in Davos”.
Lost doesn't begin to cover it. Like some sort of neo-conservative automatons, they only see the path of globalization and unfettered free trade.
Pascal Lamy, Director General of the World Trade Organization noted that trade ministers are "under domestic political pressure and what they hear at home is that trade should go [down] the toilet with the rest of the Washington Consensus". Well, you seem to have completely missed the mark; listen to those at home.
While the 2,500 plus attendees at Davos may have been “lost”, the 130,000 gathered at the World Social Forum (WSF) in Belem Brazil understood the problem perfectly.
They had not benefited from globalization, they had lost jobs, seen their rain forest burned off and their staple food crops replaced by corn and soy for the world market. Year after year, the WSF countered the opulence and indifference of the rich who rode roughshod over the poor and working classes of the world.
In Zürich, French academic Alain Bihr told IPS News that the challenges facing capitalism are “unparalleled in its history”. If the capacity of the people for struggle and resistance is sufficient, “capitalism has reason to be worried.”
There is the opportunity of Belem. As for those at Davos, when they loose their yachts, their mansions and their stock options, most of the world won't care.