Wednesday, January 25, 2012

Davos: A clarion call for "transformation" of capitalism....long overdue and needed

By Heather Scoffield, The Canadian Press, in Globe and Mail, January 25, 2012
DAVOS--The founder of the annual World Economic Forum retreat in this Alpine town, Klaus Schwab, has appealed to global movers and shakers for a “great transformation” that would challenge the basic tenets of capitalism.
Other leaders of global organizations, including Bank of Canada Governor Mark Carney, have issued a joint “call to action” asking country leaders to fuel growth and jobs in a way that confronts chronically high youth unemployment, is environmentally sustainable, and also deals with inequality.

And Mr. Harper heard a similar message from some of the Canadian business leaders in his roundtable meeting on Wednesday afternoon. He was told that doing business is not just about making money but is also about bolstering Canadian society, confirmed participant Monique Leroux, chief executive of Desjardins Group.
But the opening speech of the forum on Wednesday was all about status quo.
Throughout the recent bouts of financial crisis, “our market economy has proved itself,” said German Chancellor Angela Merkel.
She said Europe is inclined to work together to resolve the continent's sovereign debt crisis, but she stuck to her script and did not commit major new money for a rescue fund.
“I think we have shown in many ways that we are serious,” she insisted.
But she told the forum she did not want to make promises she couldn't keep — despite intense pressure from Canada and the rest of the world to inject large amounts into the bailout.
She did suggest Germany would play an active role in keeping the eurozone afloat, but said finding solutions would take time.
“We are no longer deluding ourselves.”
Officials said Mr. Harper kept up the pressure on Europe in a bilateral meeting with Denmark's prime minister, Helle Thorning-Schmidt, who holds the presidency of the European Union this year. He warned her that Europe's failure to act boldly is harming the global economy, officials said.
Is there any chance, even a miniscule one, that the combined chorus of the voices of Schwab, Leroux, Carney and Obama all singing from the same song sheet, and not only singing the same melody but also the same words, will be heard in Davos and beyond?
The words of Ms Leroux from Desjardin Group, "doing business is not just about making money, it is also about bolstering the Canadian society," sum up the plea for a different, more socially responsible kind of capitalism. And if those voices are not drowned out by the aardvarks like Harper and Manley and Flaherty and Boehner and Cantor and Romney and Gingrich, then, possibly those millions of Canadians and Americans who are living from pay cheque to pay cheque, or are actually drawing money from the state just to keep their family afloat, might possible find the bottom rung on the ladder, and start the long climb back to the middle class.
And such a dream would generate millions in tax revenue for the "state" and help to pay down the debt and the deficit, and reduce the need for radical surgery in an austerity program which both American and Canadian neo-cons would prefer, to any tax increases for their billionaire and millionaire friends.
For the Prime Minister to be in Davos taking credit for the fact that the Canadian economy did not fall into as deep a recession as some other countries, when his government did not establish the foundations, and the rules and the regulations that prevented such a deep recession is the height of presumption. And for John Manley, the former Liberal Deputy Prime Minister to be beating the drum for Harper as one of his chief cheerleaders, is nothing less than shameful. Canadian banks and lending institutions were completely separate and apart from the financial services sector for decades. And even when they were permitted to enter the insurance and investment fields, they were still governed by regulations that prevented the kind of scandalous "credit default swaps" designed by the doctoral graduates employed by the Wall Street cabal, whose executives did not understand the full implications of the instruments designed on their payroll.
Harper is riding a tiny wave of international smiles, and he rides that wave with the kind of smugness that befits the cat who has just swallowed the mouse. But like the cat, the flavour and the nourishment will not last, and neither will that wave of smiles and invitations.
Capitalism does indeed require transformation. And Schwab is right to be calling for social responsibilty as an integral part of the transformation.
And only those who are listening, and thinking through the implications of his call for transformation will ride the wave of capitalism's next chapter. I do not hear representatives from the Canadian chartered banks, the original six, singing from that same songsheet that is in the hands of Ms Leroux, where each of us could be considering taking our banking Desjardins Group....where at least the chief executive "gets" the message that has been the song of the winter of our discontent, composed and sung in the major cities around the world by the Occupy movement.
Canadian reporters covering the Davos meeting of world business leaders would do well to publish both the Schwab speech and the many and diverse reactions to his courageous and creative and timely overture to the conference he inaugurated, in the Canadian media for the next few days and give Harper's speech the backpage coverage it deserves.

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