Farewell to the Davos Man? But I’m still hoping they’ll invite me…

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by Leon Hadar by Leon Hadar

For members of the 1960s generation it was the 1969 rock concert at Woodstock. If you were there, you were part of the countercultural "mini-nation" in which minds were open, drugs were all but legal and love was "free." Indeed, Woodstock became part of the cultural lexicon of the 1960s.

As Watergate is the codeword for the national crisis of confidence of that age, Woodstock has become an instant adjective denoting youthful hedonism and 60s excess. "What we had here was a once-in-a-lifetime occurrence," according to Woodstock historian Bert Feldman. "Dickens said it first: ‘It was the best of times. It was the worst of times’. It’s an amalgam that will never be reproduced again."

And then came Davos. For members of the 1990s generation, those who belonged to the Roaring Globalization Age, the annual meeting of chief executives of the world’s richest corporations, national political leaders, intellectuals and journalists, held in Davos, Switzerland, under the auspices of the World Economic Forum (WEF) would become a symbol of the greatest achievements (Microsoft and Intel) and the greatest excesses of the time (Bono and Angelina Jolie’s lips?).

In any case, if you weren’t there, well, you probably just didn’t make it. And I must confess that despite the fact that I’ve been a flaming free trader and bullish on globalization, I’ve never been invited to Davos.

I was one of the first of my generation to go online. I was a charter to Wired magazine. I called myself a "content provider" when other journalists were still referring to themselves as just . . . journalists.

And I’ve been what Robert Reich described as a "symbolic analyst" (guys who manipulate knowledge and information for a living, as opposed to people who work for a living) and belonged to the cosmopolitan "cognitive elite," imagining, in the words of John Lennon that "There’s no country. Nothing to kill or die for. And no religion, too. Imagine all the people Living life in peace . . ." and doing a lot of cool stuff on the Internet, watching CNN and MTV, and day trading . . . And Klaus Schwab still didn’t send me an invitation to Davos. Not that I was able to find my way to Woodstock . . .

But an old friend, Nicholas Berry, director of the Foreign Policy Forum, was more lucky. He has been a "Davos Man" (Samuel Huntington actually coined this term as a way of criticizing those Americans who don’t think that there is a "US," that is, a sense of national identity anymore) for the last four years. In his four years attending, a clear, near consensus on the "state of the world" emerged from each year’s program and participant discussions, he writes.

"In January 2003, the five-day WEF produced this loud theme: ‘You’re making a big mistake, United States, if you attack Iraq’," recalls Mr. Berry. "It was polite. It was prescriptive. And it was pervasive. Bush, of course, ignored the message."

"We told you so" rang through the Congress Center meeting hall in 2004. "Anti-Americanism – really anti-Bushism – became palatable among the vast majority of participants, 90 per cent of whom were non-Americans," according to Mr. Berry.

New agenda

US government officials who attended and spoke received little applause when they touted their aim to bring freedom and democracy to Iraq. Chaos, bloodshed, and bungled occupation were all too apparent. And American corporate executives focused on business – as they usually do – and made the point of staying away from politics. "The brighter world economic picture contrasted sharply with the gloomier political one."

Iraq started to fade in 2005, as it became clear that trying to sway the United States was a lost cause, and the participants turned to their own agenda, the slogan being "time for businesses and governments to get on with their own work and pursuing their own interests."

This year, as Mr. Berry points out, the program and conversations produced a clear theme: "Energy is big, China and India are rising, and the United States is sinking."

The decline in the US role affecting the state of the world arose because China and India are on the move, with the GDPs of both giants growing at record rates. China and India are more dynamic and confident compared to the unpopular United States and President Bush.

The mess in Iraq, the Hamas victory in Palestine, and the nuclear crises involving Iran and North Korea only helped to accentuate the eroding US influence and prestige, dramatized by the fact that none of the top Bushies attended this year’s WEF (although Condi Rice did a teleconference during which she repeated a few clichés and platitudes).

But perhaps Washington’s cold shoulder towards Davos (reflected in the minuscule American media coverage of the event) has to do with more than just a failed Bush administration foreign policy agenda.

Economist Stephen Roach, who attended Davos this year (and every year), suggests that perhaps the Internet is now posing serious problems to economic growth in the United States and the rest of the developed world, and as a result, could be igniting anti-globalization sentiments even among the members of the "cognitive elite" and the "symbolic analysts" who were expected to be the main winners of globalization in the industrialized West.

"The win-win endorsement of globalization – that the development of poor countries is a huge plus for rich, developed countries – was first coined in Davos," Mr. Roach recalls. "Alternatively, there have been anti-globalization protests associated with this event for years."

But this year it was different. The debate has moved from the outside to the inside. "Serious challenges to globalization are now being openly aired in the rooms and corridors of Davos’s fabled Congress Center."

And the reasons behind this shift are not hard to fathom. One of the "wins" in the win-win of globalization has failed to materialize. Job creation and real wages in the United States and the other mature, industrialized economies have seriously lagged historical norms. It is now commonplace for recoveries in the developed world to be either jobless, or wageless – or both.

No easy way out

Even Mr. Roach, an ardent pro-free market proponent, is not very optimistic. "The toughest part of this story is that there may be no easy way out," he notes.

E-based connectivity has introduced the possibility of offshore outsourcing and wage compression in once non-tradable services industries. While five years ago, the globalization of the information function was confined to call centers and data processing, those pressures are now affecting workers in software programming, engineering, design and the medical profession, as well as professionals in the legal, accounting, actuarial, consulting and financial services industries.

Hence the old fears of the zero-sum outcome have crept back into the discussions at Davos, according to Mr. Roach. "Gains in the developing world are increasingly feared to come at the expense of the developed world," and there are growing pressures in the United States to punish China and other emerging economies, he said.

So if Roach is right, it does look kind of depressing for the Davos Man who will probably be soon replaced by the Mercantilist Man who would try to exploit the fears of the economic losers, riding on the waves of the anti-globalization wave. Maybe. In any case, it seems to me that all the cheer-leading in support for globalization in Davos was nothing more than an opportunity for a few powerful guys and gals to do some networking. Or to paraphrase an old song from the Woodstock era:

He’s a real Davos Man, Sitting in his Davos Land, Making all his Davos plans for nobody. Doesn’t have a point of view, Knows not where he’s going to, Isn’t he a bit like you and me? Davos Man, please listen, You don’t know what you’re missing, Davos Man, the world is at your command.

Not any more, man. But, hey, I wasn’t invited and missed all the fun…

They laugh, but don’t appreciate our sense of humor. They want to be free, but don’t share our concept of liberal democracy, a set of values and institutions that can only develop through a long process of trial and error and in a hospitable environment. Perhaps the time has come for Washington to adopt a more realistic approach and stop looking for democracy in the Middle East while pursuing a policy that secures the real interests of the Western democracies in the region.

After all, liberal democracy, like humor, is not an export commodity. And, unlike humor, it’s a very serious business.

Leon Hadar [send him mail] is Washington correspondent for the Business Times of Singapore and the author of Sandstorm: Policy Failure in the Middle East (Palgrave Macmillan). Visit his blog.

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