Too Little Fear?

On the front page of today's Wall Street Journal, Marcus Walker writes from Davos that "this year, many of the business and political leaders who gather ever year at the World Economic Forum are questioning whether globalization is good for the ordinary wage-earning people they employ - or in many cases, no longer employ - at their companies." Adds Walker: "A new refrain is emerging in Davos this year: Globalization isn't working for everyone."

Nonsense! That globalization doesn't help everybody is certainly nothing new to the Davos community. The global fellowship or elite, if you prefer, who gather here every January would be remote (and dense) indeed if only now - seven years after anti-globalization activists disrupted the World Trade Organization ministerial conference in Seattle - have they grasped that globalization is not fair. Everybody knows there are winners and losers. The real issue is whether there has been, to paraphrase Larry Summers at last year's Annual Meeting, "too much hope and too little fear."

It may be that 2007 is the year that fear overtook hope in Davos. That may not necessarily be a good thing. But more prominent voices are articulating what we all know to be true – that globalization has a dark side.

With this in mind, my vote for star panellist at yesterday's sessions goes to US pundit and blogger Arianna Huffington. In the US update session, she spoke of the economic hardships confronting middle-class Americans. The pressures are so hard that many are using credit cards to pay for the basics of living. Yet the US is such a consumptive society, that Americans don't have enough space in their homes to keep all their stuff. Self-storage is apparently one of the fastest growing businesses in the US. (I can believe it, being myself a user of self-storage facilities in three countries.)

People are looking for moral leadership, Huffington said. "There is a longing for a fundamentally moral discussion about poverty and injustice." People are sick and tired of spin; what they want is authenticity from their leaders. That is a plea that should go to all participants. There is a Davos spirit, but no single Davos view. The idea that suddenly the Davos Man has discovered that globalization can burn is ridiculous. A more pertinent question in this non-flat world is whether what we hear here in the Magic Mountain is authentic, the views not just from those inhabiting the peaks that globalization has pushed up but from those driven into the valleys of despair that globalization has also created.

Comments

[Stephen Beer]

Globalisation (in terms of increased trade) should increase a country's welfare but we must be alive to the painful adjustments that take place. Unless appropriate policies are implemented, to promote investment, training, equality of opportunity, the pain of the adjustments can lead to restrictions on trade, which in turn lead to constraints on growth.

[Claus Christensen]

Globalization leads to wealth - it's classic Adam Smith: Division of labor, specialization and a more efficient utilization of the resources. Competition is part of globalization and if a country decides to have huge deficits, consume instead of investing, it will lose its competiveness. But globalization is not the problem - it's part of the solution. The US schould invest more in exporting companies, education, renewable energy and thereby solve the problems using the benefits of globalization.