Tuesday, January 25, 2011

Shared Norms For A New Reality

I was hoping to attend this year’s annual meeting of the World Economic Forum at Davos, Switzerland, but I seem to have misplaced my invitation. What a pity, because this year’s theme sounds pretty deep, “Shared Norms for a New Reality.” Looks like I’ll have to follow the proceedings from afar, which will be a bit limiting because the press is barred from covering some of the events. So we won’t get to keep up with all of the action, such as one panel discussion featuring the President of Goldman Sachs, Gary Cohn: “The International Financial System: Back On Track?”

I guess secrecy is going to play a role in the new reality just as it did in the old, and not all of the new norms will be shared.

At least I’ll be in good company, because “none of the U.S.’s main financial regulators, such as Securities and Exchange Commission Chairman Mary L. Schapiro or U.S. Commodity Futures Trading Commission Chairman Gary Gensler are on the list of participants.” Fancy that. Maybe they’re busy this weekend. Maybe they just don’t ski. It’s a brand new reality out there, so who can say? Regulators are no fun to party with anyway.

So what’s this new reality they’re talking about? Things seem pretty much the same to me. Gravity is still operating. The same laws of physics still seem to apply. Life is just like it always has been, a few spots of color on a field of gray. Eat, sleep, go to work; eat, sleep, go to work; eat, sleep —hey, look at that, I got laid! — go to work. (Life, said H.L. Mencken, isn’t so much a tragedy as a continual process of standing in line.)

Nevertheless, the greatest minds of contemporary civilization plus Bono are gathering at a posh Swiss resort to have seminars on just this very topic, so something must be in the works.

Something is. Here’s the founder of the World Economic Forum, Klaus Schwab:

WEF founder Klaus Schwab explained that this new reality means understanding the impact of globalization and the Internet. “We are now living in a completely digitalized world and a completely globalized world, so we have to find some new mechanisms and values to deal with this post-digitalized and post-globalized world,” he told CNN’s Richard Quest.

He stressed the same problems of unemployment and inflation exist but “we deal with those problems in a completely new context.”

“For example, you have the shift in the geopolitical and geoeconomic center from north to south, WikiLeaks, I could go on and on.”

I think I know what he means but I’m not quite sure, which suggests a good theme for next year’s meeting: “Moving Toward a Post-Jargon World, Free of Meaningless Verbiage Designed to Bullshit and Confuse People.”

Digitalization and globalization are, I presume, code words for technology and free trade, both of which have put a lot of people out of work, diminished living standards, poisoned the environment, and created an astronomically wealthy elite who are deliberately attempting to subvert and destroy democratic institutions all around the world, most of which, especially here in the US, are empty hulks already.

That, as I see it, is the “new context” he’s referring to in which to deal with things like unemployment and inflation. Fair enough. The problem is that most of the elites who are attending this pretentious ski trip are completely in thrall to the free trade/free market ideology that created the mess in the first place. They have no intention of questioning their basic assumptions on economics or how the world should work. In fact, they have no desire to solve any of these problems anyway, none. For them the party’s just getting started, and what they’re really seeking is a way to keep it going despite the obvious disasters it has produced.

You’ll never guess how some of them propose to do it:

Nestlé CEO and WEF co-chair Paul Bulke explained the post-crisis reality will require a complete re-think of our priorities and value systems to address the current volatility and uncertainty in the world.

“In the short term we must manage the debt crisis, we can’t continue living beyond our means,” he said in an interview posted on the WEF website. “We have to organize ourselves in response to new challenges and refresh our regulations, especially in the developed world.

But over-regulation is not a good option. You cannot regulate honesty for example. I’m a true believer in a principled approach to business, rather than an excessively rule-based system which will only asphyxiate initiative and growth. [italics mine]

“The wiser choice is to agree to share norms for our new reality based on strong and explicit global principles -- the very ingredients needed to fuel development.”

Surprise, surprise. The solution to the problems caused by free market capitalism is more free market capitalism. Brave New Reality demands that we live within our means, i.e., we must cut social spending and impose austerity measures, and avoid an ‘excessively rule-based’ system that stifles initiative and inhibits growth, i.e., we must deregulate businesses and lower taxes.

Somewhere along the way, businessmen will agree to become honest and behave themselves as a matter of general principle, a shared norm. It’s no accident that this fellow refers to himself as a true believer.

The free market cultists have the ball on the goal line, and now that the defense is weak and injured they’re trying to jam it into the end zone.

But none of this really matters anyway. The real purpose of this bogus event is to make deals and schmooze with the rich and powerful. It’s all about “chasing successful people who want to be seen with other successful people. That’s the game.”

$52,000 gets you basic membership, another $20,000 gets you in.

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