Davos Turns Gently to the Right – WSJ

These ideas that China s economic model was sound, that American-style capitalism had failed, that governments could plan a successful energy transition at a reasonable cost, that business needed to move beyond profit-seeking to embrace a variety of social goals, and that pursuing a radical social agenda was a good business decision had congealed into the new conventional wisdom.

Twenty twenty-four could be the beginning of the backlash.

There were no marches for Adam Smith or posters of Milton Friedman at Davos this year, but the applause for the combative defense of free markets by Argentina s new libertarian President Javier Milei was more than polite. Citing the contrast between ages of stagnation and the miracle of accelerating progress in the modern era, Mr. Milei reminded his audience that far from being the cause of our problems, free-trade capitalism as an economic system is the only instrument we have to end hunger, poverty and extreme poverty across our planet.

His words resonated because, as one heard in panel after panel, the empirical foundations of the fashionable statist view appear to be crumbling. For now at least, the China miracle seems to be over. Beijing isn t only suffering one economic shock after another. Its worst problems demographic decline, a property bubble, overinvestment in manufacturing, and fear of arbitrary state actions against both foreign and domestic businesses are the result of government planning gone wrong. As China doubles down on repression, its economic problems get worse.

Fifteen years after the financial crisis, meanwhile, tightly regulated Europe has fallen behind the U.S. Using chained 2015 dollars to minimize the effect of currency fluctuations, total European Union gross domestic product in 2008 was 81% that of the U.S. In 2022 it was 73%, hardly an argument for the European way.

via www.wsj.com

I wouldn’t trust them for a second.