TIMOTHY GARTON ASH

From Thursday's Globe and Mail

January 29, 2009 at 12:00 AM EST

Davos Man, "the most highly evolved mammal on the planet," should say sorry for the economic mess he's got us into, according to a trenchant piece in the Times of London by British Conservative MP and journalist Michael Gove, on the eve of this year's World Economic Forum in Davos.

There is something both predictable and ridiculous about the blame game currently being played, with politicians blaming bankers, bankers blaming regulators, regulators blaming politicians and so on. If we need to spread the wealth around a bit more, as Barack Obama famously remarked to Joe the Plumber, then we also need to spread the blame around a bit more - and more discriminatingly.

Those of us who are not financial experts are only beginning to understand what went wrong in what George Soros has described as a super-boom followed by a super-bust. On the evidence we have so far, the following could plausibly be asked to interrogate themselves on their share of the responsibility. With the exception of the first and last categories, the words "some of the" should be inserted before each heading. My list is, of course, merely indicative.

Crooks: Bernie Madoff is alleged to have been a crook, fraudster and confidence trickster. That type will always be with us. The relevant question is how they are able to get away with so much for so long.

Bankers: Some respected and law-abiding bankers took huge gambles and made horrible miscalculations at our expense, walking off with multimillion-dollar bonuses while leaving shareholders and taxpayers to pick up the tab. Others did not.

Regulators: There's a lot of failure to go around here. "Is that a typo?" one official at the U.S. Securities and Exchange Commission reportedly asked, when faced with the $50-billion estimate for Mr. Madoff's losses. "Isn't that number meant to be $50-million?"

Politicians: It's very well for politicians to rail against "Wall Street" and "banksters," but this happened on George Bush and Gordon Brown's watch.

Economists: Here's a guild from which we might usefully hear a little more self-criticism - especially from the quantitative economists whose mathematical models helped to lead investors astray. In what sense can economics still claim to be a science if its predictive capacity is so low?

Journalists: Yes, a few warned, as did a few exceptional economists, like Nouriel Roubini. But it's only now that your average reader of the business pages is in a position to understand how risky his or her investments were. Did business journalism fail us?

We, the people - some of us, anyway: piling up household debt, especially in Britain and America, on the back of inflated house prices that gave the illusion of security; not asking sufficiently probing questions about where our pension funds were invested.

The system: Blanket charges against some denatured, depersonalized "system" usually betray incoherence wrapped in indignation. But there is a sense here of a global financial system that had become so large, complex and untransparent that it was beyond the capacity of even the largest actor in the markets to understand, let alone control.

The first conclusion that I draw is about knowledge and transparency. What many of these categories have in common is that those involved did not see and understand enough about what was really going on. There were too many black boxes and unopened Russian dolls, such as those repeatedly repackaged "collateralized debt obligations." Even Mr. Soros, the legendary master investor, is reported to have been wary of derivatives because he didn't "really understand how they work."

Now you may say: "Well, if Soros couldn't understand, how on earth do you expect me to?" But you can also turn that around the other way and say: "Follow the Soros rule - don't invest in anything you don't understand." If enough individual and institutional investors made that paradigm shift, this would have the beauty of using market mechanisms to discipline markets. Offer more transparency or you don't get my money. This is not a substitute for better regulation, but would be a formidable complement to it.

My second conclusion brings us back to Davos Man, a term of art coined by the late Samuel Huntington to describe a member of a new global elite, liberated from national loyalties and contemptuous of national boundaries - a kind of ruthless cosmopolitan. Davos Man was always what social scientists call an "ideal type."

In practice, Davos is a meeting place of diverse business, political and media elites. Many of the multinational companies, banks and media concerns represented here do have global business plans and strategies, yet even they often remain rooted in a national business or media culture.

As for the political leaders who come to Davos, most are still firmly based in national politics. They present their national views and interests to an international audience in the most cosmopolitan terms they can. But they always remain acutely conscious of how their words will play through national media back home.

The biggest danger to the world's economic system today is not a surfeit of Davos-type internationalism; it's the strengthening of economic nationalism. Davos has always been just part of a larger effort not to supplant international competition but to place it within a stronger framework of international co-operation.

Now we are at a crossroads. One road leads back to economic nationalism, protectionism and beggar-thy-neighbour policies. Another leads forward to more international co-operation, including more regulation and transparency. Without a conscious effort, the dynamics of both democratic and undemocratic politics, which remain national, will lead us down the former road.

Inside Davos Man, his predecessor and possible successor is struggling to get out. If you don't like what you've seen of Davos Man, wait till you see Nationalist Man at work.

Timothy Garton Ash is senior fellow at Stanford University's Hoover Institution and professor of European Studies at Oxford University.