TIMES ONLINE – Leading Article: Two arguments dominated the World Economic Forum — the long-term question about the nature of capitalism and the immediate question of bankers and their pay
In the 1960s the developed world and the developing world started an argument about capitalism, to replace the one that they had been having about nationalism. The argument is still going on but, to judge by the World Economic Forum last week in Davos, the sides have changed.
The possibility of a third way between capitalism and Soviet communism bewitched the leaders of developing countries as they first exercised independence. Rather clumsy mixed economies resulted, with disappointing growth. Meanwhile, the capitalist countries grew in confidence, which seemed amply justified when the Berlin Wall fell and the GDP claimed by many Soviet satellites turned out to be fictitious.
Yet in Davos, the developed world had lost the optimism of that heady time. The financial crash has left it pessimistic, groping for a way forward. President Obama’s Administration is too wrapped up in domestic difficulties to show up at the forum and tell others what to do. The most senior Western leader to speak, Nicolas Sarkozy, filled the vacuum with a very French call for a departure from global capitalist orthodoxy. Yet all this did not mean that capitalism lacked any optimistic leadership in Davos. Those that flew from East to West were brimming with confidence in their countries and in capitalism. Those that flew from West to East to be in the Swiss Alps arrived in a state of self-doubt.
A new and unexpected division has opened up in the debate about capitalism. The old rows between Left and Right, between the advocates of free markets and the advocates of socialism, are over, as the market evangelists predicted would happen. Yet their assumption that liberal democracy would sweep all before it no longer looks robust. Instead, liberal democratic capitalism finds itself in a surprisingly tough competition with nationalist authoritarian capitalism. For leaders in Asian and African countries, the Chinese model seems increasingly attractive. And advocates of this model lack the Western self-doubt. The depressed countenances of Europeans when discussing the climate change failures in Copenhagen contrasted strongly with the nonchalance of the Chinese Davos delegates. And Google is more worried about China than China about Google. >>> | Monday, February 01, 2010
