Some of the world's top CEOs are admitting that capitalism is worsening inequalities, but they say it's better than any alternative.
The defensive salvos by chief executives kicked off talks at the World Economic Forum in the Swiss ski resort of Davos on Wednesday. Europe's debt crisis and a looming slowdown in the developed world are casting a cloud over this year's gathering of 2,600 elite business and political leaders.
“Capitalism may be the worst form of systems, except for every other system,” said David Rubenstein, co-founder of the Carlyle Group, the Washington-based global asset management firm.
With protesters camped at an igloo near the snowy meeting venue, pressure is on the VIPs at this year's forum to take workers' fears into account as they discuss the world's economic problems. The Occupy movement and other protests have drawn global attention to anger over inequality, stubbornly high unemployment in many areas, and increasing poverty.
Those from the corporate world shifted some blame onto governments.
Reform is “not just about corporations and greed. It's about decision-making,” said Alcatel-Lucent CEO Ben Verwaayen. “Why does it take Europe (and its leaders) two years to come to a conclusion that they knew they had to face anyway?”
He didn't elaborate but appeared to be referring to the acknowledgment of the severity of the crisis and need for bold action, and the leaders' decision to bring economic management of countries that use the euro closer together.
Brian Moynihan, CEO of Bank of America, which was forced to back down from plans to start charging a $5 debit card fee after protests by Occupy and others, said banks have “done a lot” to reduce excesses and said that boom and bust cycles are a part of the capitalist structure.
But, others argued that the process is not inevitable — and that government should take a stronger role in regulating how companies do business.
The chief of the International Trade Union Confederation, Sharan Burrow, said “we've lost a moral compass” and said that if governments don't invest in social protections now, “nobody will like the social unrest that will follow.”
The CEO of accounting giant Deloitte, Joe Echevarria, talked about developing “compassionate capitalism.”
“You're going to have to deal with regulation — balancing the need to protect society along with stifling growth,” he told The Associated Press in an interview at Davos. “I think that has to manifest itself through the choices that governments and businesses make.”
While the bigwigs debated at Davos, key Greek bondholders were holding closed-door meetings in Paris to discuss how — and whether — to continue talks central to Europe's debt crisis, a person close to the bondholders said.
Later Wednesday, German Chancellor Angela Merkel may chart her course for Europe's crisis in her keynote speech at the Davos forum.
Surveys ahead of the meeting showed pessimism among world CEOs and plunging levels of public trust in business and government leaders, feeding the overall sense of fragility in the U.S. and European economies, and concerns that it will bring the whole world's economy down.