Magazine article The American Prospect

A Tale of Two Cities: Davos and Porto Alegre Square off on the Global Economy. (Gazette)

Magazine article The American Prospect

A Tale of Two Cities: Davos and Porto Alegre Square off on the Global Economy. (Gazette)

Article excerpt

TWO POLITICAL MOVEMENTS representing distinct visions of the global economy will hold their annual conventions the last week of January. The World Economic Forum--an organization of some 1,000 multinational corporations--will meet in Davos, a picture book ski resort in the Swiss Alps. The forum was organized 30 years ago to provide a discreet hideaway where businessmen-without-borders could socialize and strategize with one another and selected heads of state. Over the years, Davos has become less an exclusive retreat to do business and more a quasi-public conference on how to make the world safe for multinational capital. This year, more than 500 government officials, media pundits, leaders of churches and nongovernmental organizations (NGOs) such as the Red Cross, and "leading thinkers" will share cocktails and ideas with the captains of global capitalism.

Meanwhile, some 7,000 miles away, a much larger group of environmental, labor and other social activists will gather in sunny Porto Alegre, a bustling commercial city in the flat, cattle-raising landscape of southeastern Brazil. The World Social Forum was first organized in 2000 as a counterpoint to the World Economic Forum. Porto Alegre was chosen because it is in the Third World and because the local government--run by Brazil's Workers' Party, whose leader, known as Lula, has just been elected president--offered to host it. Two years ago, 4,000 registered delegates showed up, and another 16,000 people came to listen to the discussions. Last year there were 14,000 registrants and 35,000 observers. For this year's conference, organizers had 24,000 registrants by Dec. 1.

Although the party of Porto Alegre has larger conventions, the party of Davos remains in power almost everywhere. Its neoliberal model, which makes freedom to invest the supreme political value, has been for 20 years the agenda of the International Monetary Fund, the World Bank, the World Trade Organization, the U.S. Department of the Treasury and other governing institutions of the global marketplace.

But inside the cozy chalets of Davos, the triumphalism of the past is likely to be muted this year. The world's economy is entering the third year of economic slowdown, and there's no consensus among the multinational elites on how to revive it. Japan remains in the grip of its deflationary spiral, tight-money central bankers are choking Europe's growth and much of the developing world is staggering under unpayable debts. The prospect of war in Iraq and at least a short-term unsettling of global oil prices add to the jitters. Doubts about the Bush administration's competence notwithstanding, Davos looks to the United States for salvation--hoping that U.S. consumers will continue to defy the laws of economic gravity by spending more than they earn in order to absorb the rest of the world's excess production.

The uneasiness among the Davos constituency reflects more than businesscycle anxiety. Despite the rapid U.S. expansion of the 1990s, the neoliberal model has failed to deliver on its promises to accelerate Third World growth, improve the distribution of income, and usher in an era of freedom and democracy. Indeed, almost half of the world's 50 poorest countries saw a drop in their per capita incomes over the decade.

Misgivings can now be found even at U.S. universities, where thousands of foreign economics and business students have been trained in neoliberal thought. …

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