Politics & Policy

Davos Journal, Part VIII

We’re in the homestretch now — I can feel it. For the previous installments of these notes from the Annual Meeting of the World Economic Forum in Davos, Switzerland, follow these links: Parts I, II, III, IV, V, VI, and VII. Ready for No. 8?

Gordon Brown is on the stage of Plenary Hall in the Congress Center. He’s the new British prime minister — or he still feels new to me. The ex-PM, Tony Blair, is a “co-chair” of this meeting, as I’ve mentioned. But now Gordo has the stage all to himself — with WEF chairman Klaus Schwab, that is.

Introducing Brown, Schwab says that the WEF’s slogan used to be “Entrepreneurship in the global public interest.” (It is now “Committed to improving the state of the world.”) Schwab says that Brown is running a prime ministership “in the global public interest” — which is very high praise indeed. He further says that Brown is the man behind “the transformation of the U.K. economy.” And he congratulates him on his “global engagement.”

At the mike, Brown apologizes for being late, for his plane had some delays. Everyone can relate to that. Brown is very polite — as Britons tend to be, or certainly used to be — and he speaks a very interesting, pleasing English: Touches of Scotland are in it.

In the first part of his address, there is not a word that you and I — Reaganites, I mean — could disagree with. Brown says that we’re in a testing time for the global economy — “a testing time for all of us who believe in a globalization that is about open markets, free trade, flexibility, inclusiveness, and sustainability.” There is a “real danger,” he says, that we will fall for “three familiar responses,” responses we’ve seen all too often before.

The first is to resort to “heavy-handed regulation.” (That is, to do so when times are tough.) The second is to resort to protectionism. The third is to be paralyzed into inaction. And here Brown quotes Churchill: on the “resolve to be irresolute,” etc.

Here in Davos, people like to talk about the dangers of overpessimism. But there is a danger of overoptimism too, says Brown — overoptimism about what can be achieved. He says we should avoid “overemphasizing the silver lining at the expense of some of the clouds” — rather like the policeman who, on looking at the body of a casualty, says, “The first two wounds are fatal, but the rest aren’t so bad.”

I’m glad to know that line, from Brown — have never heard it before.

Instead of regulations, says the PM, we need transparency. Instead of protectionism, we need free trade. And we need some new institutions, or some rejiggering of established ones.

The international institutions now at our disposal, says Brown, were created in 1945, when the world was much different. There were many fewer countries; economies were sheltered. Think of the IMF, the World Bank, the United Nations — all institutions built for the problems of the 1940s. Are they equipped to address the problems of 2008?

Brown says that we lack “proper mechanisms” for dealing with conflict-ridden states, or failed states. Nor do we have mechanisms for dealing with non-state terrorism. We’re not properly prepared for dealing with “global pandemics,” either.

And we have not yet woken up to “the sheer power of the Internet.” You go to China or India, Brown says, and there are millions who are using the Internet, or are about to use it. These people have considerable new power — powers of information-gathering, powers of self-expression.

But back to the United Nations: You can’t have a situation, says Brown, where you have failed states and it takes years or decades to do anything about it. He cites Rwanda, Bosnia, Somalia, Darfur — and “problems ahead in Zimbabwe and Burma.” (Ahead?) “If we don’t have international organs capable of dealing with these problems, the world will look askance at claims that the U.N.” is capable of much of anything.

Hear, hear.

Brown has an idea (several): Why can’t the World Bank become a world bank for the environment, as well as for development? And we need an IMF more like an independent central bank. And a U.N. that can really get to grips with modern problems. (To my ears, Brown is saying, “Adapt, or get out of the way.”)

World poverty, says Brown, is an “emergency.” (Was it ever anything else?) “If you look at what’s going to happen this year, food prices will be going up dramatically.” The U.N. has these Millennium Goals — for getting kids into school, cutting back on infant mortality, and so on. But there’s no chance of meeting those goals, says Brown, on present trends. And “people should not be asked to wait 50 years for action we promised them in 2000.”

Here’s a cure for poverty (say I, the chronicler): a free economy, the rule of law, clean government, a disinterested judiciary . . . Is that too simple? If it is simple, it is not wrong.

Having delivered his address, Brown sits down with Klaus Schwab, the chairman. And Schwab asks him about “corporate responsibility” — or “corporate social responsibility,” or “corporate philanthropy,” or “corporate citizenship,” or whatever you choose to call it. This is a big, big theme here in Davos — almost up there with Climate Change. To listen to Davosers, you would think the purpose of any business is charity, or humanitarian deeds.

When some of the CEOs talk, you get the impression that they think of themselves as running the Red Cross — rather than, say, IBM. Of course, some observers have a cynical view: They think the CEOs put on the Albert Schweitzer act just to buy a little peace. Maybe there’s a psychological combination at work.

In any case, Prime Minister Brown tells a story. Henry Ford was to come to Britain in the 1930s, to set up factories. And a certain mayor thought it would be a great opportunity to get some Ford money. He wired him: “Would you give us 10,000 pounds for an old-people’s home?” No reply. Then another telegram: “How about 5,000 pounds?” Still no reply. Finally, the mayor hit on something crafty (and dishonest): He simply announced that Ford would donate 10 grand.

And when Ford arrived in Britain, he had no idea what to do, having been outsmarted by the mayor. So he said to the mayor, “I will give you the money, but I have a condition. You have to put at the entrance of the old-people’s home a Scripture: ‘I was naked, but you took me in.’” (That Biblical phrase is loose.) “Took me in” — get it?

Brown has a lesson: “That was the old corporate social philanthropy — grudging, an afterthought. Now corporate philanthropy and corporate social responsibility are at the core of business.” Blah, blah, blah.

Friends, if you’ve been reading these Davos Journals over the years, you know my view: Businesses should conduct their business well — make the best possible widgets, provide the best possible services, etc. And they should do all they can to enrich their shareholders. The more money these people have, the more they have for charity. But corporate charity, rather than individual?

I submit to you that Henry Ford did a lot of good; that he rendered a great service to humanity. Not through his charitable dollars, but through his cars. He put an automobile within reach of ordinary men and women. He, indeed, revolutionized the world. I doubt a thousand philanthropists put together could do as much.


‐Once the Brown-Schwab colloquy finishes, a group joins Brown on the stage, for a discussion of corporate social responsibility. Would you like a little taste? I won’t be long.

John Chambers, head of Cisco, has a simple, straightforward message, which he delivers with confidence: You can make a difference in society — through corporate philanthropy, he means — and benefit your business at the same time. Corporate philanthropy is good for business.

Peter Sands, of the U.K.’s Standard Chartered, has something interesting to say: Engage in philanthropy, yes. But pick the object, or form, of your philanthropy carefully. No one can do everything. Your corporate philanthropy might as well be relevant to your business.

Indra Nooyi, the woman who runs Pepsi, is smart as a whip. That’s obvious. She refers to corporations as “little republics,” that “wield a lot of power.” “We are bigger than some national economies.”

Corporate philanthropy inspires a business’s employees, she says; it touches their emotions. It imparts a feeling of “shared vision.”

Nooyi considers herself at least as much a social leader as a business leader. “If societies succeed, companies succeed.” True enough, in a way. “And we all have to act in enlightened self-interest. We want to be good, not just in a business sense but in a moral sense.”

Great. But, um: Can you make a Diet Pepsi Cherry? That tastes good? (I’m sure that Pepsi makes such a product; I mean no disrespect. I’m just being cheeky — while conveying a worthy point.)

When another panelist begins to speak, the cameras begin to click and whir. Why’s that? Ah, it’s Queen Rania of Jordan — you can’t blame them.

She says, “To me, the question is, ‘What can businesses do to help advance the agenda of your country?’ To me, corporate citizenship is about humanizing globalization. For the last couple of decades, the world economy has integrated at an accelerating pace. In the process, we’ve left many people behind, and we’ve neglected our environment. I think that, increasingly, business leaders are trying to right those wrongs.”

Government alone cannot solve social problems, says Rania. And here she rattles off statistics: on infant mortality, school attendance, etc. Thinking about the problem of girls out of school, she says, “I wonder how the guys at Google would combat that.” Yes, how would they?

In the Arab world, Rania says, people still turn to government for answers. “The problem is, people are not 100 percent aware of what corporations can do for us.” Nonetheless, there have been many initiatives, and they are “gaining traction.” What’s more, “a lot of the social values that underpin these initiatives are deeply entrenched in our system.”

The queen of Jordan talks like an MBA — “value added,” and so on. She is a Davoser — “Davos woman” — to the core.

‐Two Americans are having a conversation — chortling to each other. This is a typical Davos conversation. One says that, if Obama is the Democratic nominee, he will be hit for lack of experience. But, says the other, “Dick Cheney has a lot of experience. It’s just that he has never learned anything.” They both go ha ha ha.

And I’m thinking: Cheney knew more when he was playing football and chasing chicks in Wyoming than these two bozos ever will.

Anyway, on that bitter political note — I’ll see you tomorrow, for our wrap-up, including the foreign ministers of Turkey and Iran. And some surprise Republicans.


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