AMERICANS don't need to be triumphalist about their economic model any more. They know they are on top, and everybody else does too. I've been coming to the World Economic Forum annual meeting in Davos, Switzerland, for five or six years now, and every year the dominance of all things American in business, markets and economic policy becomes that little bit more all-embracing.
With the US model now reincarnated as the dot.com revolution, or the "new economy", final victory was this year made complete. American executives, entrepreneurs and policy makers have been centre stage throughout the sessions at this exclusive business conference, held in the snow-bound Alpine ski resort of Davos.
No one can doubt the supremacy of their economy, their technology and their companies. Even the Europeans have come largely - albeit reluctantly - to agree that the American approach of open markets, flexible labour and free trade seems to produce more innovation, more jobs and more prosperity than any of the alternatives. The American way is the best way, possibly the only way, is the message that echoes along the corridors of the WEF's labyrinthine conference centre.
In the self satisfied environment of this dazzling concentration of business leaders, only the still recent events of Seattle, when riots brought trade talks aimed at further liberalisation of international markets close to collapse, serves as a reminder that not everyone agrees. Among policy makers, real concern was expressed about the alienation over the process of globalisation felt by parts of the developing world, and by some groups within prosperous Western countries. Tony Blair, the Prime Minister, referred to "an enormous job to do to convince the sincere and well-motivated opponents of the World Trade Organisation agenda that the WTO can be, and indeed is, a friend of development, and that far from impoverishing the world's poorer nations, trade liberalisation is the only sure route to the kind of economic growth needed to bring their prosperity closer to that of the major developed countries."
There was a similar message from President Bill Clinton, who urged business leaders to fight the backlash against free trade and open markets with a new inclusive approach to commerce and wealth distribution. Those that fear the process will lead to a deepening of inequalities between richest and poorest must be listened to, the President said. "The consequence of opening up the dialogue and dealing honestly with these issues will show that in the new economy, we can have more growth, and more trade, as well as better treatment of those in work and more sensible environmental policies", Mr Clinton insisted.
Business leaders expressed dismay that they had failed to get the free trade message across with sufficient vigour. Lewis Campbell, chairman of Textron, said; "We have to admit that we have not created a guiding coalition to make global free trade a reality. Too often we use factual dry arguments, but our opponents use emotion - fear of losing jobs, destruction of environment, or dominance by impersonal global machinery in which they have no say."
Mike Moore, the new director-general of the WTO, agreed. "There is enormous anxiety out there and for some reason the WTO is copping the blame for everything that goes wrong. Globalisation has become the "ism" to hate, that's the problem," he said.
However, the problem exercising European business and political leaders most is closer to home - how to catch up with the booming new economy of the US. Europe is growing again, and despite the embarrassing collapse of the euro in the currency markets, there is a renewed sense of confidence and a determination to change. I think for the first time since I've been coming to these meetings, there is an overwhelming consensus around the need for root-and-branch structural reform and - perhaps as significant - for a change in culture and approach among businesses. In marked contrast to previous years, little time or space was given to the idea of "the European model" as a viable alternative to America's vibrant free market economy.
Tony Blair captured the mood when he stressed that unless continental Europe took advantage of the single currency as a platform for free market reform, it would get left behind in the new economy. "So far, not all the advantages enjoyed by the US of the new economy have crossed the Atlantic," the Prime Minister said. "There is relatively little evidence that either productivity growth or inflation in continental Europe has yet been affected by the digital revolution, despite the fact that Europe actually leads America in some crucial new sectors, including wireless telephony".
Mr Blair said he wanted to see the Lisbon summit in March mark a definitive turning point towards reform. "Does Europe continue with the old social model, that has an attitude to social legislation and welfare often rooted in the 60s and 70s, or does it recognise that the new economy demands a redirection of European economic policy for the future?"
One businessman who seems to embody Europe's very own new economy and rising sense of self confidence is Hasso Plattner, chief executive of the German software group, SAP. Mr Plattner has lived and worked in the US, and understands as well as any the rigidities that are holding Europe back in the new industrial age. Since I couldn't put it better myself, I'll let him speak. "We have a wonderful opportunity in Europe, but there have to be changes. There's a lot of unemployment in Europe, but in the hi-tech sector we have no such problem. Rather, it is the reverse difficulty of insufficient numbers of people with the right skills. When Americans come out of university, they are younger and more business savvy than in Germany. Nor is there any way that an industry such as our own can exist on a 35-hour week. You need to work 60-hour weeks to stay in the game, and only the young can or are prepared to do that.
"In the US there are stock options and shared ownership of a company. Even the secretary in a young start-up has the opportunity to become a millionaire. In the US there is also an attitude that says a company must grow as quickly as possible - its growth must not be impaired in any way.
"The US has big advantages over Europe; one language, one legal system, one tax system, and its labour force can move easily between states. In Europe we have to overcome our language, community and cultural barriers so that labour can be more mobile. In the new economy, people have to be mobile.
"The US also has a different cultural approach to business - a drive and aggressiveness which is sometimes absent in Europe. In Germany we have a problem with negative thinking, which can produce high quality on the one hand, but is a stumbling block on the other. We try to find ways why things may not work, rather than having the attitude that we can make it work so let's get out and do it.
"It is a myth that the US is a low tax country. It is not. But they do have a money making culture which the tax system doesn't stand in the way of. In the US they have a flat-rate capital gains tax of 20 per cent. In Germany it is 61 per cent. This does not encourage people to drive their companies forward."
It is hard to disagree. Perhaps surprisingly, it took the ever persuasive Lawrence Summers, for the first time in Davos in his enhanced role as US Treasury Secretary, to sound a note of caution about the US's now unassailable position as role model to the rest of the world. When first in Davos 10 years ago, he recalled, there was a strong conviction about the decline of the US economy and the superiority of some other economic models, particularly those of Germany and Japan. Few people are given the gift of prophecy, but this is as good an example as they come that trends and impressions, however compelling they seem at the time, have a nasty habit of reversing, sometimes sharply.…