The CEOs of three-quarters of the world's 100 largest companies have just completed an uncomfortable weekend at the tiny Swiss ski resort of Davos, while their companies' share prices nosedived on global stock markets, amid concern that the U.S. economy was staggering towards recession.
The Alpine village, which is virtually inaccessible to anyone without a helicopter, is ringed with barbed wire and tight security arrangements for the World Economic Forum (WEF) in late January every year. This 37-year-old private gathering brings together dozens of heads of states, hundreds of government ministers and a smattering of activists and celebrities to join the chief executives for a series of discussions and workshops, as well as private parties thrown by companies such as Google with the help of the world's most famous disc jockeys.
The price of attendance isn't cheap: each CEO spends roughly $60,000 a year to attend. But once they have made it onto the invite list they can look forward to schmoozing with their peers in Davos and hobnobbing with celebrities. This year they had a chance to meet Tony Blair, the former British prime minister; Al Gore, the former US vice-president and Nobel Prize-winner; and Bono, the Irish rock star and debt campaigner. Past gatherings have also given CEOs the opportunity to play chess with Antoly Karpov, the former Soviet champion, and to take a twirl on the ice with Russian skating stars.
Some CEOs have occasionally delighted in doing the incongruous: Rupert Murdoch, the billionaire owner of News Corporation, did a stint as a waiter at one party this year.
But the 2008 gathering was fraught with irony for the CEOs and the bankers who have financed them. Wrote Bruce Nussbaum of Business Week: "Last year, an army of slick-haired, Wall Street private equity and hedge fund guys turned up to show the doubting Europeans the clever and kindly face of American market capitalism ..... (t)o the Europeans who complained that private equity and hedge fund wheeling and dealing were distorting economic growth, they gently suggested that the Old Country was out of touch with the new reality of financial innovation."
This year the Wall Street whiz-kids had to eat humble pie. "Turns out the Europeans were right," wrote Nussbaum. "The subprime junk packaged and repackaged as top prime credit collapsed and is taking the rest of the U.S. economy (and perhaps the world economy) down with it ..... (s)o if the slick-haired guys can still afford to hop their private jets to get to Davos this year, they're going to find a lot of really angry Euros armed with really strong euros."
Indeed, Lionel Barber, editor of the Financial Times, suggests the Davos tradition of celebrating globalization has come to an uncomfortable halt: "In the past few years, globalization has enjoyed virtually unqualified applause from the power-players inside the Davos conference rooms, whatever the noisy protests outside in the snow-clad streets -- the triumphalism has disappeared, replaced by a pervasive uncertainty."
One of the world's best-known CEOs, Microsoft chairman Bill Gates, admitted to fellow participants that he had become skeptical of the very notion of capitalism. He told the Wall Street Journal that he had seen the failings of capitalism first-hand on visits to places such as the South African slum of Soweto, and had discussed them with dozens of experts on disease and poverty.
At one of the most widely attended events of the week, Gates called for a "creative capitalism" that uses market forces to address poor-country needs that he feels are being ignored. "We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well," Gates said. "I'm an optimist, but I'm an impatient optimist. The world is not getting better fast enough, and it's not getting better for everyone."
And billionaire George Soros, who made his fortune speculating on global currency exchange rates, took the opportunity of the WEF to call for major new regulations and oversight over financial markets. Soros said that the failure to restrain the free market has caused "not a normal crisis but the end of an era."
Not all CEOs agreed. "People have to keep in mind, throughout history we have always had cycles, people shouldn't be surprised," JP Morgan CEO James Dimon, co-chair of the WEF, told the closing debate.
Dow Chemical CEO Andrew Liveris went further when he told Reuters: "What's going on now should not have a 'Chicken Little' atmosphere. The sky is not falling."
Public Eye on Davos
While the CEOs finally acknowledged that a rising tide might not lift all boats, and that capitalism could indeed have a downside, Swiss activists showed up outside the WEF to "name and shame" companies with particularly egregious records of violating environmental and human rights.
Oliver Classen, the spokesman of Berne Declaration, a non-governmental organization in Zurich, announced in a press release: "Our message is: Global players watch out. We're watching you. We are a threat to their reputations. They know that, and they should behave accordingly."
Together with Pro Natura, the Swiss branch of Friends of the Earth, Berne Declaration organizes an annual counter-event called the Public Eye on Davos where anyone can vote to rank companies with the worst reputations.
This year Public Eye voters singled out Areva, a French multinational that has mined uranium for 40 years in the African nation of Niger, a former French colony.
Areva subsidiaries Somair and Cominak were condemned by Almoustapha Alhacen, president of Aghirin'man, the organization representing affected workers. He reported numerous "suspicious deaths among the workers, caused by radioactive dust and contaminated groundwater" above internationally accepted safety levels.
Alhacen says that mine workers are given inadequate information about the health risks of open-air storage of radioactive materials. The activists allege that the company evades paying for workers' medical treatment. They claim the company hospital issues false diagnoses for sick workers, and signs death certificates blaming AIDS when workers die of cancer.
For The Love of Money
Yet despite the doom and gloom inside and accusations of abuse and hypocrisy from outside, the parties barely slowed in Davos.
Disc jockey Norman Jay (also known as the Minister of Sound) flew in from Australia to spin records at the biggest party of the weekend, thrown by Google. The invitation-only event was attended by Lauren Bush, niece of President Bush, Sheikh Salman bin Hamad Al Khalifa, the crown prince of Bahrain, Jordan's Queen Rania and U.S. Congressman Tom Davis. A Wall Street Journal blogger announced that party-goers danced the night away to songs like "For The Love of Money" by the O'Jays.