Tuesday, January 22, 2008

Snowboarding On The Cusp Of Economic History ... While Desperately Awaiting Sen And Stiglitz's More Holistic Indicators Of Economic Progress

"Is economic history about to change course? Among the chieftains of politics and industry gathering in Davos for the World Economic Forum on Wednesday, a consensus appears to be building that the capitalist system is in for one of those rare and tempestuous mutations that give rise to a new set of economic policies.

As the prospect of a U.S. recession overshadows a tense and drawn-out election campaign in the world's most emblematic market economy, a corrosive cocktail of factors is eating away at old certainties: Power is steadily leaking from West to East. Income inequalities are rising in rich countries.

And signs of a protectionist backlash are multiplying as worries about climate change, the rise of state-run investment funds and the bursting of the recent credit bubble give novel ammunition to those in the West who question free markets and clamor for more shelter from globalization.

What exactly will emerge when the dust settles is hard to predict, economists and executives say. But this much seems clear: With the frontier between state and market once again up for grabs, the era of easy globalization is over - and big government in one form or another is back....

When students of economics open their history books in 2030, they might read about 2008 as the year when the groundwork was laid for a re-regulation of certain markets, a more redistributive tax system and new forms of international policy coordination, economists say.

"We are seeing the seeds of a new paradigm," said Kenneth Rogoff, a professor at Harvard University and former chief economist of the International Monetary Fund, who will be at Davos this year. "Whoever wins the U.S. election will have to pay more attention to equity. And whatever comes out of the next climate change agreement will be international economic cooperation on a scale never seen before." ...

Others say an even deeper review might be called for. Nicolas Sarkozy, the French president, this month commissioned two Nobel economists, Amartya Sen and Joseph Stiglitz, to help devise a more holistic indicator of economic progress than growth in gross domestic product, which fails to account for issues like income inequality that have been at the heart of the globalization debate.

"Economics is not just politics," Sen said. "There is more to human progress than aggregate statistics of growth. We have to ask the right questions and concentrate on what matters to people." ...

Katrin Bennhold "On the cusp of economic history" International Herald Tribune January 22, 2008

"The Hotel Schatzalp lies 300 metres above Davos in a splendid south-facing situation. The hotel, built in art-nouveau style from 1898 to 1900, was originally intended as a luxury sanatorium and was regarded as one of the most advanced of its kind in the region. In his novel «The Magic Mountain», written in 1924, acclaimed German author Thomas Mann devotes several passages to the Schatzalp Sanatorium.

Since 1953/54, the Schatzalp Sanatorium has been run as a first-class hotel.

The «Alpinum Schatzalp» is another of Schatzalp's superb attractions. Visitors to this beautiful botanical garden can admire more than 3'500 alpine species from mountains of all over the world (Switzerland, Pyrenees, New Zealand, China, Nepal, Tibet, etc.).

Sledging back to Davos on the thrilling 2.5 km sledge run which is well prepared and offers yet another appealing attraction."

Photo and caption credit: (c) Davos Tourismus. All rights reserved. With thanks.


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