The self-styled masters of the universe, who have brought the world so much economic grief, have been meeting in Davos for their annual carnival of self-congratulation called the World Economic Forum. But their usual hubris was tamed by a little humility, their insufferable sense of righteousness was accompanied by some reflexivity as they deliberated the agenda for "shaping the post-crisis world." The glitter of the past gave way to gloom as the ostentatious parties were toned down by a widespread sense of alarm and the relative absence of stars that decorate these events. But some observers [1] were still taken aback that there appeared to be little collective guilt or individual contrition among the movers and shakers of global finance and business and politics.

They had to sit through the indignity of being lectured by leaders of regulated state-capitalist or semi-socialist and so-called emerging economies who blamed them, the captains of capitalism, for greed and ineptitude and bringing the world to the brink of economic catastrophe. The Russian Prime Minister, Mr. Vladimir Putin, gleefully recalled: [2] "I just want to remind you that, just a year ago, American delegates speaking from this rostrum emphasised the US economy's fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist. In just 12 months, they have posted losses exceeding the profits they made in the last 25 years. This example alone reflects the real situation better than any criticism."

The Chinese Prime Minister, Mr. Wen Jiabao, was equally blunt. Without mentioning the United States by name, he blamed the crisis on [3]: "inappropriate macroeconomic policies of some economies and their unsustainable model of development, characterized by prolonged low savings and high consumption; excessive expansion of financial institutions in blind pursuit of profit; lack of self-discipline among financial institutions and ratings agencies and ensuing distortion of risk information and asset pricing; and the failure of financial supervision and regulation to keep up with financial innovations, which allowed the risks of financial derivatives to build and spread."

In what became the mantra of the conference, repeated by so many others from parts of the world tired of American and British capitalist fundamentalist sermons, the premier called for the restructuring of the world economic system by deepening international economic cooperation and promoting a sound multilateral trading regime; reforming the international financial system and establishing a new international order; strengthening international cooperation in financial supervision and regulation; effectively protecting the interests of the developing countries; and collectively tackling global challenges from the environment to energy to food security.

The UN Secretary General, Ban Ki-Moon [4], fervently appealed to the Davos elite not to forget the world's poor in this moment of crisis. "Last year, we gathered here to declare 2008 the year of the bottom billion," he reminded them. "These are the poorest people who live on less than a dollar a day, who are vulnerable to every shock that comes. As we struggle to cover these and other challenges we must not waiver in our commitment to the poorest of the poor. We must stand by those who are most vulnerable."

His predecessor, Kofi Annan added the caution that [5] "the world's economic problems cannot be allowed to eclipse other key priorities -- including a global food crisis and the need to protect people from climate change." He underscored the challenges facing the developing world including Africa [6] which was likely to see falls in commodity prices and capital inflows from foreign investment, developmental assistance, and remittances. The former Nigerian Finance Many other leaders from the global South underscored the gravity of the crisis for their countries and the need to manage it carefully to minimize the risks and establish a more robust and equitable global order that would benefit them in the future. The former Nigerian Finance Minister, Ngozi Okonjo-Iweala [7], made similar observations and noted that the problems were indeed worse and would last longer than experts had originally imagined.

Not to be outdone, the leaders of Britain and Germany [8] called for "tougher control of the international economy in a critique of what Europeans see as the dangers of U.S.-style capitalism." The German Chancellor, Ms. Angela Merkel [9], blamed the crisis on "irresponsible speculation" and lack of regulation and transparency in financial markets. She preached the virtues of German system--the so-called 'social economy', which unlike the failed Anglo-Saxon model, mixes capitalist and strong social safety net and regulation.

Chancellor Merkel argued against protectionism and urged the creation of a new international regulatory body, a UN Economic Council, modeled on the UN Security Council created in the aftermath of the horrendous tragedy of the Second World War. Similar sentiments were echoed by the British Prime Minister, Mr. Gordon Brown [10], who warned against resorting to protectionism, and for the overhaul of international financial institutions, noting that institutions such as the World Bank and the International Monetary Fund created more than sixty years ago were now "out of date" [11].

The chastened captains of capital listened as the house of cards they had built and out of which they had benefitted so mightily was lambasted for its systemic failures, inefficiencies, inequities, and unsustainability. They even sought redemption in popular causes which they had previously shunned as dangerous weapons of assured wealth destruction by embracing a green new deal for the post-crisis world [12]. But there was tempered hope in Davos from the least likely quarter: among experts on the Africa panel [13], who projected that the continent would weather the storm better than most regions this year. A report issues earlier this month Africa Progress Panel [14] headed by none other than Kofi Annan even claimed Africa could in fact help reboot the global economy. This holds a kernel of truth: long-term global growth will depend on the development of the global South, not demand from the over-indebeted and overstuffed consumers of the global North.

As has become customary, the Davos jamboree was greeted by protestors in Davos itself [15] and in Geneva [16] where protests were held despite a ban imposed by the local authorities. More importantly, as has become customary, another gathering was taking place in the Brazilian city of Belem, the less glamorous but more inclusive World Social Forum. The Forum drew about 100,000 people including the presidents of Brazil, Bolivia, Ecuador, Paraguay, and Venezuela.

Reporting on the Forum, Rory Cory [17], writes: "The theme of the ninth World Social Forum was ‘another world is possible', but in light of the financial crisis spreading through western economies, the unofficial motto was ‘we told you so'. US economic blunders had created the mess and only ‘21st-century socialism' could fix it, said the Venezuelan president, Hugo Chávez [18]. ‘Misery, poverty and unemployment are on the rise, and it's mostly the fault of global capitalism.' The forum had to seize the initiative and offer solutions, Chávez told cheering crowds. ‘In Davos the world that is dying is meeting, here the world that is being born is meeting'....

The Ecuadorian president, Rafael Correa, one of a new wave of leftist leaders, said the neo-liberal idealogues in Davos had failed. ‘They are the ones responsible for the crisis. They are not the ones to give us lessons.' With Paraguay [19]'s bishop-turned-president, Fernando Lugo, Correa led an audience in an ebullient chorus of songs, including Comandante Che Guevara, a tribute to the Argentinian revolutionary. Bolivia's [20] Evo Morales, the Andean country's first Aymara president, said social movements must ensure priviliged elites no longer accumulate capital without considering the human cost.

The Brazilian president, Luiz Inacio Lula da Silva, a moderate leftist, has previously attended Davos but this year shunned it for Belem and brought with him a dozen cabinet ministers. His government would invest in industry to create jobs rather than throw public money at banks as Europe and the US had done, he said. ‘I believe the crisis is much more severe. We don't know how deep it will go.' Latin America still winces at the painful humiliation of the World Bank and International Monetary Fund ordering austerity measures in the 1980s and 90s. ‘Now, I expect the IMF to go to [the US president, Barack] Obama and tell him how to fix the economy,' said Lula."

As the pirates, sorry masters, of the universe who have been trekking to Davos every year since 1971 seek to regroup and reorganize the world in their image, this transformational moment offers the crowds who gather at the Social Forums a unique opportunity to reshape architecture of the world economic system to make it more equitable and more sustainable, to ensure that it brings both growth and development for the many, not just the few.

First Written January 31, 2009