At Davos, the globalizers are gone
For 40 years there's been a consensus view at the Davos World Economic Forum that globalization's increasingly free cross-border flow of ideas, information, people, money, goods and services is both irreversible and a powerful force for prosperity. As with meetings of the G7 group of industrialized nations, there was broad agreement on the proper role for the state in the performance of markets. Sure, a French cabinet official and an American investment banker might spar over the relative merits of state paternalism and Anglo-Saxon labor laws, but the bargaining table was still reserved for champions of Western-style free market capitalism.
Davos has always had its critics. For those who believe globalization empowers the rich at the expense of the poor, the forum exists to allow the wealthy to pretend they're at a film festival. There are the Hugo Chavez/Mahmoud Ahmadinejad-type critics who insist that Davos represents post-modern imperialism with an alpine backdrop. There are the NGO critics who argue that the forum is more about partying than problem-solving. There are the conspiracy theorists who charge that Davos is simply the spot where Council on Foreign Relations commissars and their bosses at the Trilateral Commission make plans for the future and make time on the slopes.
But for the first time, some of the most powerful folks inside the Davos event are challenging the value of globalization. These aren't the have-nots of years past. These are the men and women driving some of the world's fastest-growing economies.
This massive change has its roots in 2009, when Davos served as the world's single most important multilateral gathering. The discussion was much franker and more open here than anything on display at the London and Pittsburgh meetings of the G20, the United Nations General Assembly or the climate change conference in Copenhagen. At Davos, leaders from the public and private sectors gathered for open discussion of the still-developing crisis, as a financial tsunami created a heightened sense of unity.
Now the sense of crisis is gone -- and so is the unity. Sure, there are still plenty of delegates warning of the lasting effects of the financial crisis and global slowdown, plenty of anxiety that jobs aren't coming back quickly enough and that the worst is yet to come on sovereign debt defaults. But other delegates have moved beyond fear of what has already happened to anticipation of what's to come. They're talking about a wave of populism and protectionism -- and the momentum behind the drive by some governments to use state-owned companies, privately owned national champion firms, natural resources and sovereign wealth funds to dominate markets for political advantage. This talk of a need for new barriers and of the virtues of state-managed capitalism suggests that Davos -- and the global economy -- have turned a corner, and that free market capitalism now has new competition. We survived the shipwreck, and now we're free to go our separate ways.
Indeed, this edition of Davos leaves me wondering whether the new G20 era will eventually render this gathering obsolete. Next year, when U.S. and European delegates diagnose what ails the global economy and prescribe free market remedies of various kinds, they will face the skeptical smiles of others who believe the free market has failed and that the state should play a leading role in national economic performance.
There will be little left to agree on beyond the beauty of the backdrop.
Ian Bremmer is president of Eurasia Group and author of the forthcoming book, "The End of the Free Market: Who Wins the War Between States and Corporations?"