STOCK MARKET WATCH -- Tuesday, 24 January 2012

[Demeter]

29. Davos 2012: Has capitalism got a future?

http://www.bbc.co.uk/news/business-16670718

Has capitalism got a future? Is it fit for the 21st Century? And if it has and is, how must capitalism change? The organisers of this year's World Economic Forum (WEF) have put some pretty crunchy questions on the agenda. But as more than 2,600 of the world's richest and most powerful people come to the Swiss mountain village of Davos to discuss the state of the world, is it a topic that they want to talk about? For some, these are clearly the right questions. "Is capitalism working? Will we grow again? Is the Western model still working?" asks John Griffith-Jones, the UK and Europe chairman of accounting giant KPMG. "I'm really interested in hearing people talk about that," he says. Mr Griffith-Jones talks of the need to find a "concept of responsible capitalism" and worries that even if Davos man and woman find a consensus, it will not be one that is very clear to people in the wider world. The founder and driving force of the forum, Prof Klaus Schwab, is even blunter. "Capitalism in its current form no longer fits the world around us," he says....Prof Schwab speaks of a "dystopian future", where political and economic elites "are in danger of completely losing the confidence of future generations".

Indeed, a global survey released just days before the start of Davos, the Edelman Trust Barometer, suggests there has been a sharp drop in public trust, not just in in business but especially in governments around the world...Global leaders know they will have to work hard to regain the trust of the people they govern...Mr Jones is worried that key issues such as youth unemployment and global warming could be pushed to the sidelines. Being fixated on the crisis could also make companies overlook the fact that doing business is changing in very fundamental ways. Mr Jones calls it the "age of damage", where "social media create a world of radical transparency"..."Whether you are the head of an Arab country, the boss of BP, a misbehaving fashion designer or a footballer," he says, "basically what we are seeing every single day is the power of people to make leaders behave the way they want them to be."