*{It's not the economy, it's the society [http://www.weforum.org/site/knowledgenavigator.nsf/Content/It's%20not%20the%20economy%2C%20it's%20the%20society?open&topic_id=300250000&theme_id=300]

            28.01.2000

            Annual Meeting 2000}

            The twin forces of globalization and the market economy are irreversible, but this process is creating tremendous pressures on society. How do we balance globalization with social structures and - more to the point - balance the relationship between globalization and government actions?

            Bulent Ecevit, the Prime Minister of Turkey said that thanks to mass education and democracy, people more than ever feel entitled to shape society. But with the advent of globalization, people feel that they are losing control to an impersonal and freewheeling system. He is optimistic that people will figure out a way to deal with the pressures of globalization. "Globalization is a product of human inventiveness," Ecevit said. "Its most positive aspects have contributed to the incredible dynamism in the world economy. At the same time, the disparities in the distribution of wealth have been augmented." Ecevit emphasized that the mass protests at Seattle during the recent meeting of the World Trade Organization bode ill for the market economy. The protests, he said, prove that the market economy has to be supplemented by social policies. "Markets by their very nature cannot deal with issues of morality and social justice."

            Kurt Biedenkopf, Minister President of the Free State of Saxony, Germany, said that while the majority view is that globalization is an inevitable process, very little thought has gone into what exactly is being globalized. "Information, knowledge and capital are areas where globalization is natural," he said. "However, there are other areas, for example societies, that are defined by language, culture and history, where globalization will not take place." Citing the example of Germany, he said that over 50% of the non-market processes were controlled by the state. The same held true in most western European nations. "The real issue is that the inequality between a minority group of industrialized countries and the rest of the world is increasing. We should look at the consequences of this increase and figure out ways to cope with the problem."

            Louis Schweitzer, Chairman and Chief Executive Officer of Renault, France, offered a business leaders' perspective of how globalization is changing the political and social landscape. He said that while most countries today recognize that an efficient economy is a prerequisite for growth, it is equally true that a free market and an efficient economy does "not lead to happiness". He said that a purely free-market economy is like allowing a fox free into a henhouse. "The hens don't enjoy it. And this may not be good for the fox either, because after eating all the hens, the fox may eventually die of starvation," he said. Schweitzer acknowledged that a Darwinian process drives free markets, where only the most competitive firms survived the race. "I can accept that companies can disappear in this process. But this should not extend to human beings. Equal opportunity is the fuel for economic growth. The business sector recognizes that political leadership is needed in areas such as education and health," he said. He added that corporations should not interfere in the democratic process and this raises the issue of how much political funding is acceptable.

            Christine Todd Whitman, Governor of New Jersey, said that the process of globalization has led to a challenge of expectations. "A French philosopher once said that the problem with our present time is our future is not what it used to be. Similarly we don't know where technology will take us," she said. Todd Whitman pointed out that the world had taken tremendous strides in improving income distribution. Average income, she said, had trebled over the last 50 years and the number of people living below the poverty line has fallen to 10% from 20% in 1975. Even in America, she said, great disparity existed despite the fact that 18 million new jobs had been created. "Important steps need to be taken. But we cannot turn the clock back. The superiority of the free trade system over protectionism is recognized. So in the new economy, we have to ensure that everyone has access to education".

            George Soros, Chairman of Soros Fund Management, USA, drew a distinction between our role as participants and citizens. "In the market system, we can do very little to change the rules," he said. "When competition becomes intense, when you are fighting for survival you can only bring about change as a member of a society." Soros said that political and social life would change if citizens were guided by the common interest. "The two roles have to be blended," he said. "It has now become an acceptable standard that politics is also business, that politicians will cater to those who will fund them. The inevitable question is how can I be concerned with social good, when others are pushing their agenda for selfish reasons." Soros feels that as a starting point, people should place the interests of society above their own to bring about meaningful change.                 

                  *{Contributors:       Biedenkopf Kurt
                  Chan Ronnie C.
                  Ecevit Bulent
                  Schweitzer Louis
                  Soros George
                  Whitman Christine}