Davos: a winter wonderland?

Last Modified: 27 Jan 2008
By: Faisal Islam

"'Please, oh corporate titans' I thought to myself, 'don't put your hands up'." Faisal Islam blogs on the Davos free market party.

'You got a fifty dollar bill put your hands. Put your hands up,' went the lyric to the Fatman Scoop tune being blurted out at a swanky Davos do.

'Please, oh corporate titans' I thought to myself, 'don't put your hands up'. But sure enough, up went a forest of hands and cufflinked wrists, flashing imaginary fifty dollar notes hiphop-styleee.

While that might suggest overwhelming corporate confidence, the tone of chatter at Davos was markedly more insecure. The stock market and credit market convulsions, Socgen's rogue trader, and the very real prospect of a US recession set a bad tone for Davos Man and Woman.

'The French economy won't be affected, but when a bank can mislay $7 billion, there are very few certainties left,' one of France's leading businessmen told me. It's fair to say that there was a fair amount of off-the-record sniping from industrialists at the expense of 'greedy' bankers too.

Yet the real question at this Davos, is 'who calls the shots'? The suggestion that multinational international capital lords it over the nation state has long been a popular theory. What was clear at this Davos, is that the State has struck back.

Sovereign Wealth Funds hovering up stakes in private banks. State energy companies becoming the world's biggest. There's government stepping in to bail out bond insurers and implore banks to clean up their act on accounting transparency.

There's more than a whiff of economic nationalism in the fierce debates around these issues, and I sensed some concern amongst the beneficiaries of free-flowing global capital, that the world is becoming less enamoured of free markets.