What the World Economy Needs Now is Not Davos But New Alternatives
By Curtis F.J. Doebbler
Professor of Law, An-Najah National University, Nablus, Palestine
ccun.org, January 25, 2009
This week hundreds of business leaders and others interested in
the world economy will flock to Davos, Switzerland—one of the most
expensive cities in the world—to sip wine, smoke cigars, dine on
exquisite cuisine and discuss the world economy.
government will host this meeting of the rich and powerful by canceling
the human right to freedom of expression of anyone who wishes to
demonstrate against the World Economic Forum whether peacefully or
otherwise. The Swiss hosts will also vet anyone coming to make sure that
they have the requisite cash to participate in this forum and are
staying at one of the exclusive hotels or residences. Even people living
in Davos have trouble moving around their city.
residents of Davos don't have to put up with the inconvenience of
dedicated, mainly young, people calling for a different approach to
world economics, they will be hosting people like John Thain, the former
Bank of America head of investment banking, securities and wealth
management. Although he was recently fired from his post and his failing
former employer doesn't want him to go to Davos, he has insisted on
being there anyway. And after laying off 5000 employees, Microsoft
magnate Bill Gates will be in Davos to explain how our current economic
model can still be made to work, despite the most recent evidence of its
There will be a chorus of pro-western economic policy
adherents—the same one's tat we have heard for the last decade or their
like-minded successors—singing the traditional song about how economic
growth is an end in itself to accomplished for the betterment of the
For some of the rich and famous, however, the tune being
sung at Davos is apparently enough to make them sick. Australian Prime
Minister Ruud has canceled and new American President Obama is sending a
junior envoy. It is also not clear that some of Latin-Ameerica's
leaders, who are credited with soem fo the most astute
economic policy steering of the ir countries, even by the Davos crowd,
will grace Davos with their presence. In any event, controversial, but
still oil rich Venezuelan President Hugo Chavez did nto even consider
coming to Davos.
It is true that the Russian and Chinese
leaders are attending, but it seems their motivation is more aimed at
signing an agreement on sharing their natural resources in an equitable
manner. Such equitable sharing of resources run contrary to the Davos-think
that suggest that resources should be exploited for profit and little
Despite some interesting developments that may take place
on the sidelines of the Davos 2009 World Economic Forum (WEF), to many
observers this meeting and its attendees are losing their relevance.
This is not only because of their extravagance, but also because of who
they really represent.
Most of the people at Davos are the same
people who caused the economic problems that are rocking the world.
While many of them have managed to survive the economic downturn
reasonably well because of their already privileged social and economic
status, they are the ones who are responsible for the suffering of the
billions of of people who are suffering because of an economic
system they constructed, maintained and still control—abet with somewhat
less ability to manipulate in the way they had become accustom.
Why would anyone trust the people who got them into a very serious
problem, to provide them the way out of the problem? Wouldn't you want
fresh advice from new faces, perhaps by the critics of the
problem-causers? Not the WEF. For them it is business as usual, even if
that business is failing miserably.
Part of the problem is that
those who are in Davos either haven't understood the message that is
inherent in the suffering of the so man people in the world. These world
leaders and the world—especially western—media still turn to the same
old guard because it makes them feel secure in the world in which they
live. Moreover, these failed guardians of the world economy still chant
the same mantras that they have been chanting for decades in the hope
that we will again adopt their hailed system of laissez-faire economics
in which governments keep their hands off a system that merely
perpetuates already existing inequalities.
The myth of equal
opportunity for all the underpins traditional economic wisdom, has been
shown not lead to an improvement for the half the people in the world
who live on less than two Euro-a-day. In fact, as the past several
decades have unambiguously proven, the current inequalities grow wider
almost every day.
Currently the United States GDP is more than
four and half times greater than the average GDP of all the countries in
the world. That meas that even if the American economy keeps devaluing
as it has during the past year, in about a decade it will still be much
stronger than the economies of any developing country. This takes into
account, of course, that the economies of developing countries, which
themselves have bought into the western model of laissez-faire
economics, will be proportionately affected by the world economic
The fact that the gap between rich and poor is
widening in many parts of the world is—according to many of those who
will be in Davos this week—an 'unavoidable' consequence of our world
Nevertheless, nobody in Davos will be
admitting that perhaps there are alternative means for people to live
with each other that do not depend on adherence to the failing world
economic order that the Davos crowd created and is committed to
perpetuating. Even more strikingly, few if any, of the Davos crowd will
admit that the nations of the world have already agreed to a world
system of governance that requires almost all countries, no matter what
economic policies they pursue, to protect some basic rights of everyone
under their jurisdiction.
Among these basic rights are social
and economic entitlements that governments have represented to their own
people, and to the world, that they will protect no matter what policies
they pursue. These in include providing basic housing, the highest
standard of health care possible, access to education, and an adequate
standard of living to everyone for whom they are responsible.
The majority of the current economic thinking ignores the binding
character of these rights. It denies that governments are not entitled
to negotiate away these rights. It ignores the fact that governments
must ensure these rights to the best of their abilities and before other
negotiable issues like military spending or the bailing out financial
institutions is undertaken. And much of the current economic thinking
touted by the crowd in Davos, ignores the fact that every government in
the world can provide these rights to those who find themselves under
their jurisdiction...if they only want to do so.
for most of us, the people who have been influencing how governments
determine their economic policies don't think that guaranteeing the
above social and economic rights for everyone is necessary or even good
for the economy. Instead they point to the need for competition and how
it teaches people to fend for themselves. They claim tat this
self-dependence is better for the world then a social system where
people can trust that their government will distribute wealth so as to
ensure that everyone has their basic rights satisfied. They don't
usually mention the huge head start that they and their paymasters have
over the voiceless majority of people in such a competitive system.
The myth that we all have equal opportunities to become rich and
successful is as false as the promise of unlimited development in a
world of finite resources. The World Wildlife Fund has been pointing out
for years that if everyone in the world uses the amount of resources
that the average American uses, we will exhaust all the world's
resources—including our clean air and our potable water—in just over a
Ironically, many of the longer existing indigenous
civilizations in the world showed more respect for their environment and
the natural resources around them then modern societies today. The
United States is one of the most striking examples, where three hundred
years ago the native American Indians were using their natural resources
more efficiently and effectively then modern American society.
There will be no representatives of indigenous people in Davos.
As the demonstrators, who will have ignore the Swiss ban on their
freedom of expression to get their message across this year have shown
in past years, there is an alternative to the world economic order
celebrated by Davos. Representatives of these voices will not be allowed
into the meetings in the extravagantly decorated and the hyper-security
controlled meeting room of the WEF. Instead they will be forced into the
streets and forced to brave the threat of prosecution for any attempt to
express their views in public.
Despite the draconian crack down
on the human right to freedom of expression being imposed by the Swiss
authorities and despite the fact that their message will be largely
ignored by world leaders in Davos and the western media covering them,
the message that these demonstrators have for the world may be more
relevant than any other message concerning the modern world economy.
Many of these alternative voices start from the premise that
economic growth is not an end in itself. Pointing to the economic and
social rights mentioned above they call for a more equitable
distribution of wealth and for governments to take interventionist
action to secure a basic social and economic safety net for their
people. Somewhat ironically, this is something that governments are in
fact doing, although to a much lesser extent than these alternative
voices would wish and without the long term commitment that they are
being urged to adopt for such policies.
Obama's estimated 95 billion dollar public spending pledge on social and
economic infrastructure is at least a nod in this direction. And
countries from the Middle East, African and Asia are now commonly seen
as responding to the current economic downturn by strengthening public
services rather than privatizing them as they had been urged to do for
the last decade.
The alternative voices counter those who say
that government should let the free market function, by pointing to the
current failures and adding that if a government does provide basic
social and economic security for its people, it has no value. This is an
argument that few in Davos want to hear.
alternative voices also point out how for decades the western model of
laissez-faire economics has failed at least half the people in the
world. They demand not only that this must change, but that the past
suffering of so many people must be redressed. At one extreme they call
for the redistribution of wealth, but in most cases they are merely
calling for nuanced changes that will provide more help to those
who have suffered by limiting the excesses of those who have benefited.
Among the international economic policies they urge are those that
demand that rich states honor the pledge they made almost three decades
ago to provide .07% of the GNP to overseas development assistance to
poorer countries. As American economist Jeffery Sachs has pointed out,
if developing states were to abide by this commitment, the United
Nations' minimum set of development objectives, known as the
Millennium Development Goals, could be reached by the target date of
2015. Less than a hand full of states have every met this target and in
2008 only Norway did so.
There are even alternatives that will
be represented in Davos, but are unlikely to get much of a hearing
despite the fact that governments are being forced in the direct that
they advocate. A prime example of such policies is the prohibition of
interest (riba) that is a fundamental part of Islamic banking. While
western governments have annually denied the workability of lending
money without getting interest from those who have to pay back the
loans—up front fees are not prohibited by Islamic law—the economic down
turn has forced many western governments to move in that direction by
drastically cutting their lending interest rates to almost zero.
Ironically, even as governments of have done this, the financial
institutions that lend to the public have maintained interest rates.
While Islam sees such interest as evil, there to be increasing good
economic reasons why lenders should not require those who borrow from
them to pay back the money with interest. Still most of those in Davos
will not be willing to admit this.
While there may be some value
facets to be learned from those who have run our world economy into the
ground, does it really make sense to focus attention on their views to
dig us out of this rut? Commonsense would seem to dictate an negative
answer to this question. Perhaps it is about time that the Davos crowd,
their rich Swiss sponsors, the mainly western media that so dutifully
covers the Davos party, and especially the policy makers who need to
make the best decisions for their people not a few elites, start to look
Maybe we should pay more attention to the next
series of World Social Forums that will be held around the world this
spring, where alternative ideas will be on display or to the people
expressing these ideas on the streets of Switzerland, if they are not
arrested for doing so.
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