Friday, February 6, 2009

Mountain Redesign: What "Davos Man" Should Be Doing

Originally published in The Huffington Post on January 28, 2009.

The Economist has published an essay on the World Economic Forum in Davos entitled "Mountain Reboot", which says, in part...

It is generally agreed that the system needs rebooting. The Davos agenda, entitled "Shaping the Post-Crisis World", is laden with soul-searching discussions about the mess, from the brainstorming session on "What Happened to the Global Economy?" and an "interactive dinner" called "36 hours in September: What Went Wrong", to CNBC's debate, headlined "No Way Back".

... and sums up this year's event as follows:

Mr Schwab (the World Economic Forum's founder) is likely to be delighted that this year's Davos will feature a record crop of heads of state and politicians. This marks the latest stage in the evolution of the World Economic Forum from a gathering of European businessmen trying to figure out how to get more trade liberalisation into the leading talking-shop for the global elite. Although it is not a decision-making body, the true test of the Forum's value will be whether the week's chatter will lead to action. Having led the world into its current mess, will Davos Man and Woman find a way to lead it out again?

The essay's title -- "Mountain Reboot" -- implies that the system that has crashed just needs to be restarted, like an old computer. This is the wrong metaphor. We don't have a system that needs to be restarted. We have an obsolete system that needs to be redesigned!

I wish the organizers of Davos had invited some engineers and architects to lead the "What Happened to the Global Economy?" brainstorming session, because when something collapses on its own -- as capitalism has -- engineers and architects know to look at the principles used to design the system in the first place and see which of those design principles are the reason for the collapse. Replacing those principles with new principles that work... that will prevent a future collapse... is what they do. (I used to be a civil engineer. That's why I know this.)

Taking this approach, I see that the current system was designed when the world consisted of separate, independent nations that could survive in an environment in which they competed with each other for dominance of the world (putting aside that some of them would be destroyed during the occasional war). "Balance of power between nations" was the catch-phrase. The current system was also designed when "never ending consumption and growth" (including never ending growth of profits) was an essential part of the business world's foundational beliefs.

We now know that "competition for dominance" and "consumption / growth" are obsolete principles.

Why? Because we truly are now in an interdependent world (both economically and regarding the challenges we face, like global warming). And because sustainability -- (the wise use of what we have, including the free energy supply from the Sun) -- has replaced never ending growth and consumption as how we now know we need to live.

It is time for our economic system to catch up with our physical, technological, and sociological realities. The gross mismatch between a competition and growth driven economic system -- functioning in a world that knows we are one human family that needs to live together in peace (and finally has the technological ability to do so) -- is why capitalism has crashed. Capitalism as currently designed must be replaced, not "fixed"... not "rebooted".

Just as you must switch from a car to a boat when you begin traveling on the ocean instead of dry land, our world's leaders must organize around designing and implementing a new economic system appropriate to this totally new world. This is what Kofi Annan knows we need. He has written "At Davos, our business and political leaders must show they understand that our world has shifted for good and that we have to change with it or perish."

Perish we will, if we think using an obsolete system will enable us to travel in the new, "one world" waters we find ourselves in now.