[David Ignatius] Seeds of change for globalization

DAVOS, Switzerland ― The organizers of the World Economic Forum were self-critical enough to organize panels this year on such dark topics as “Is Capitalism Failing?” and “Global Risks 2012: The Seeds of Dystopia.” And these were just the latest in a series of annual ruminations here on the troubles of the globalization movement the conference symbolizes. 

It’s hard to be a convincing Spenglerian amid so much good food and drink, not to mention money. But let’s ponder one aspect of what might be called the “Davos Dystopia” ― namely, the way in which the elite networking it represents has unintentionally worked to undermine social cohesion out in the larger world. Even as the elites have become better connected, resentment toward them has seemed to grow back home ― fueling discontent.

The gloomy Davos sessions were a recognition that 2011 was the year of the protester ― from Occupy Wall Street and the tea party to the Arab Spring to riots in London and Greece.

So how does it work, this cycle of simultaneous globalization and disconnect? What you see here are some of the smartest business and political leaders in the world gathering to discuss common problems. It’s a heady feeling, to see so much global talent in one place. And increasingly, this elite shares connections with great global institutions ― universities such as Harvard and Stanford, companies like Google and Microsoft, global financial giants like Goldman Sachs.

It’s an inclusive elitism: The magnet draws the rising tycoons from developing countries and fuses them with the once-dominant Americans, British, Germans and French. That’s the most likable feature of the forum, the way you see Chinese and Indians and Egyptians and Pakistanis shuffling down the streets in their snow boots, along with the Swiss hosts. They are part of the connected world, just as much as the old-line bankers and CEOs from the West.

But let’s think for a moment about the flip side of this process. As the “best and brightest” from the developing world plug into the global grid, they inevitably unplug from their local political, business and cultural networks. It’s a subtler version of what used to be called the “brain drain.” The entrepreneurs keep their businesses at home, where they are making their money, but they and their children join the global elite in a web of Four Seasons hotels and Ivy League tuition bills.

And back home? The anger begins to boil. Rage against the elites is a global phenomenon these days ― as powerful in America as it is in Egypt. People resent a system that offers increasing returns to power and privilege, and they take to the streets in protest. In regions such as the Arab world, where the elites have been especially disconnected from the masses, the rage can explode into revolution.

Why do you think Chinese leaders are so nervous? They know that a billion people out in the hinterlands are watching elite Chinese on television, and envying the newly rich from Shanghai and Guangzhou who buy Louis Vuitton luggage for their trips abroad. That’s why the Chinese talk so much about “balanced growth” ― to spread some of the new wealth, and ease resentments against the rich in the coastal cities.

The people who are filling the power vacuum, as the corrupt local elites fall in Egypt and Tunisia, are the ones who would never have been invited to Davos before. They are from excluded organizations, such as the Muslim Brotherhood. But their very separation from the global elite was one reason the insurgents could ally so effectively with the public: They never disconnected from the local grid; they remained in the mosques and souks among the masses.

But here’s the most interesting part ― and the reason why the globalization process retains its dynamism. It happens that some of the leading revolutionaries of 2011 were at Davos last week, too, as if to claim their seats. Among the most interesting discussions here was one that included Abdel Moneim Aboul Fotouh, a former member of the Muslim Brotherhood who is now running for president of Egypt, and Rached Ghannouchi, co-founder of the al-Nahda movement that won power in Tunisia.

It’s this process of self-renewal that allows a system to survive. The old Egyptian crony capitalists with their big cigars were gone from Davos this year, replaced by Muslim Brothers. And their message to the bankers and tycoons was that the new Egypt and Tunisia welcome foreign investment. Hopefully, the insurgents can find a way to be plugged into two grids at once. 

By David Ignatius
 
David Ignatius’ email address is davidignatius@washpost.com. ― Ed.

(Washington Post Writers Group)