Swiss peaks and slippery slopes

Morality was on the menu at this year's Davos summit

The Economist online

BANKER-BASHING and worries about the inability of the world’s systems of governance to tackle increasingly pressing global problems were the underlying themes of the annual World Economic Forum (WEF), held last week in Davos. The best attempt at setting a more positive agenda for reform, albeit delivered in a speech that struck many in the audience as eccentric, came from Nicolas Sarkozy, the French president, who called for a more “moral” form of capitalism. While everybody seemed to agree with that broad goal, there was little agreement on how to get there.

Moralising Sarkozy

Davos is usually a time for contrarian thinking by the business leaders, politicians, academics and social entrepreneurs who gather there. This year seemed only to confirm pre-existing trends. The economic recovery will be slow in the rich world. Solving problems such as climate change and poverty remains fiendishly difficult. The emerging economies are bouncing back strongly. Technology is the most upbeat industry, banking the least. Here are the highlights from this year’s forum:

Capitalist of the week: Stephen Schwarzman, a private-equity tycoon and boss of Blackstone Group. He made little effort to contain his glee at the profit opportunities he has found during the economic crisis, and his hope that Barack Obama will press ahead with his latest banking reforms—which should help private equity by harming the public capital markets.

Absent friend: President Obama’s popularity may be plummeting at home, but Davos Man and Woman still love him, even though this year representatives of his administration were painfully thin on the ground. The only leading member to show up was Larry Summers, Mr Obama’s chief economic guru. Mr Summers struggled to convince his audience that the president’s sudden embrace of the “Volcker rule” to reduce systemic risk in banking was an “evolution” of policy rather than a panic-driven exhumation of his own rival as presidential adviser, Paul Volcker. Next year, when Mr Obama may need the love more than ever, perhaps he should do his State of the Union speech earlier, then take Air Force One to Switzerland.

Absent fiend: Everybody wanted to give a good kicking to Lloyd Blankfein, the boss of Goldman Sachs, but he sent his deputy instead. The bank bosses who did turn up, such as Josef Ackermann of Deutsche Bank and Stephen Green of HSBC, could not stop talking about the need for banks to rediscover their social mission—so there was not much fun to be had kicking them.

God is back: Is the moralisation of Davos a first step towards a more moral capitalism? Last year’s final session featured Archbishop Desmond Tutu. This year Rowan Williams, the archbishop of Canterbury, delivered the closing homily, urging the audience to “live responsibly in the present”.

Billanthropy still rules: Heeding the archbishop’s words, Bill Clinton and Bill Gates again set the do-gooding agenda. Mr Clinton announced a partnership between his Clinton Global Initiative, the WEF and the United Nations to rebuild Haiti better than it was before the recent earthquake. Mr Gates pledged a further $10 billion to provide vaccinations in poor countries. This was a generous way to mark the 10th anniversary of GAVI, a vaccination alliance created at Davos in 2000, which is now recognised as one of the most effective public-health initiatives yet seen. Given the general feeling of impotence in solving other big problems at this year’s Davos, Haiti offered an opportunity for people to feel there was at least something useful they could do.

Simon Cowell would be proud: Davos has got talent. There were plenty of stunning musical performances after hours. Among the biggest stars was Odiva, a South African singer-dancer who performed at the closing gala. Also notable were the band at the McKinsey party (which was much better than the Google party this year); and, in the early hours of Sunday morning in the Hotel Europe’s piano bar, Randi Zuckerberg, the “director of creative and buzz marketing” at Facebook (co-founded by her brother Mark). She belted out superb versions of “Son of a Preacher Man” and “Killing Me Softly”, with backing vocals by Wikipedia’s founder, Jimmy Wales.

Warning shot: The Chinese were out in force—with Chinese state television prominently located opposite the entrance to the forum’s main venue, the Congress Centre, making the Americans and Europeans nervous. But the clearest warning to the industrial nations from an emerging economy was delivered by an Indian. Azim Premji, the billionaire boss of Wipro, a business-process outsourcing firm based in Bangalore, said that if the rich world decided to start a trade war by interfering with trade in services, India and China were ready to respond with restrictions on manufacturing imports. Nobody can say they weren’t warned.

The voice of youth: This year’s Davos featured a smaller proportion than ever of elderly white men in suits. There was a debate on female genital mutilation because Julia Lalla-Maharaj, founder of End FGM Now, a lobby group, won a contest on YouTube. Along with the archbishop, the closing session featured six young “global changemakers” who are achieving significant impact through social activism. Although Davos is hearing a wider range of voices than before, Mousa Musa, a 17-year-old disability activist from Iraq, spoke for many when he questioned where all the fine words and sentiments heard at Davos were leading to. Where is the action, he asked? “Will we be saying the same thing next WEF?”