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Eric E. Schmidt

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Davos Confidential

Posted: 02/11/10 01:04 PM ET

It's easy to sneer at Davos as a place where the rich, powerful and famous come to talk to each other and arrogantly put the world to rights. But there has been little sign of arrogance at recent gatherings. Nor any settled view of how to overcome the challenges our world faces. If there is a global conspiracy underway at Davos, no one has yet let me in on the secret.

Instead Davos mirrors the uncertainty in the world in general. The real story this year was not arrogance but anxiety over how we could channel turbulent global forces in a more positive direction so that everyone gains. It's a rare chance for people -- whether political or business leaders -- to check their more narrow interests at the door and discuss these challenges from a broader perspective.

So we heard real and widespread concerns about the direction of the American economy and, for the first time, the danger of stalemate in our political system. There was intense discussion, too, about the eurozone and levels of debt. Here, too, there were concerns about politics, the lack of clear direction and lowest common denominator decisions.

Set against this sober assessment of the future of liberal democracies, we have to come to grips with the new strength and success of those countries which don't fit neatly into the traditional Davos model. China, of course, tops this list.

Its economy continues to power ahead, generating jobs and innovation, competing increasingly not just on price and scale but on quality. The question is the sustainability and wider damage of an economic boom fueled by an undervalued currency. There were fears, too, of the impact of the massive surpluses it has built up. The United States is by no means the only country whose debts are held in Asian hands.

Given China's success and the way power and wealth are shifting east, Google's recent announcement on China generated a lot of debate at Davos. It was a decision seen as both courageous and foolish, often at the same time. Weren't we quitting the Yukon just as gold was found? It's a good question. But in the end, you have to do what you believe is right.

It is the chance to discuss such difficult choices and the wider challenges we face with people from different continents and industries in an informal and open way which makes Davos so stimulating. You are certainly never bored. Where else could you take part in a discussion on "'The Bard and the Buck' -- today's financial economy through the plays of Shakespeare".

Davos, of course, has its own place in literary history. It was the setting a century ago for Thomas Mann's The Magic Mountain. In his novel, the Alpine retreat is a cloistered and peaceful haven which becomes a laboratory where the intellectual forces which were to shape the twentieth century are shaped.

I am certainly not making the same overblown claims for Davos today. Nor could anyone describe it, over these intensive few days, as a peaceful haven. The protesters and helicopters alone make that impossible.

But in the time I have been attending -- and despite this recession -- we have seen prosperity increase, poverty reduced, democracy spread and a growth of global opportunities.

Access to knowledge has been democratized beyond imagination allowing the powerful to be held more easily to account. Businesses are much more aware of the need to look beyond the balance sheet and their responsibility to the wider society.

These successes all rest on principles central to Davos. Principles such as the benefits of free trade, free societies and free speech and, above all, open collaboration between business people and politicians who recognize that with freedom should come responsibility. Yes, the world has critical challenges, especially in 2010, but I believe that in these Davos values lie our solutions. It's this hope and optimism that will ensure I keep coming back as long as I am invited.

 
 
 
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HUFFPOST SUPER USER
politicky
just follow the $$$
03:06 PM on 02/16/2010
“it’s like twitter, facebook and michael arrington had a drunken 3-way. twitter gets pregnant. 7 months later there’s a premature delivery and the afterbirth ends up in your gmail inbox.”

— The best description of Google Buzz I’ve read so far (via)
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09:40 AM on 02/16/2010
ceo of a corp which is attempting to manipulate itself into a shadow gov. in this country---------dangerous man and dangerous corp.
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HUFFPOST SUPER USER
Middle Blue
What's a micro-bio?
01:52 PM on 02/14/2010
@Eric - Please, help the nation to become more competitive and prosperous with your spare time.

Thank you,
The Rest of America
12:57 PM on 02/14/2010
Our current version of America is a Christian nation, run by lobbyists, forwarding an anti women's rights, anti equality, racism, gun toting mentally imbalanced pharmacutical junkies, homophobic, anti culture, anti diversity, trying to create a scenario where 95% of Americans are in forced indentured servitude. Meritocracy is frowned upon, and the consistent redistribution of wealth to the rich has reached its 30 year pinacle. Capitalism has gunned down democracy...that is not what I'd call a 'liberal' democracy.
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HUFFPOST SUPER USER
Middle Blue
What's a micro-bio?
01:50 PM on 02/14/2010
I think you need to clarify this -- This is YOUR view of America, from the perspective of the keyboard at a computer somewhere with heat, light, food, a 24 HR mart nearby with inexpensive fuel....

Why do you enjoy all of that? How can you, when you think the country is such a horrid place?

Please, be my guest, move to France, see how you're treated -- If you prefer, London.
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brooklyncitizen
Soror quaerens lucem
09:24 PM on 02/14/2010
at least he'd have free health care in France or London.
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HUFFPOST SUPER USER
FredBrighton
up the establishment!
08:17 AM on 02/15/2010
Must be an American... If you had paid attention in class you would have learned that people in the 21st century do not simply "move to France..." as you say. Just like America, there are quotas for immigrants in all countries. You have to apply for consideration etc. You have to have a job there. So just because a person remains in the country of their birth does not mean we should give it a pass. I'd suggest you read Howard Zinn's magnificent People's History of the US but you won't read it. The facts are in the official government papers, easy to find. Our country was founded on a policy of genocide and religious intolerance. Our Big Businesses have helped finance people like Adolph Hitler. Our factories have destroyed the ecology of the air and water. Our military has destroyed (so far) 3 countries, murdering hundreds of millions of civilians. Our government asserts the right to hold people from anywhere in the planet, indefinitely, without charges, without lawyers, without hope. The numbers could go on and on but right now America is the biggest threat to life on this planet and only those of us aware enough to know this, even if we are at home near a convenience market as you say, are in a position to oppose the greed which drives the American corporate machinery. You support the madness.
06:46 PM on 02/14/2010
Contrary to MB's com ment, I think you pretty much nailed it. I'd like to comment further, but evidently I'm not permitted to do that.
12:46 PM on 02/14/2010
There are liberal democracies?! Please give me an example of one country that you would consider a 'liberal' democracy
01:24 PM on 02/14/2010
Last time I checked we weren't a democracy at all, but a republic.
HUFFPOST SUPER USER
rockyroad
05:28 AM on 02/14/2010
What? Do the Davos attendees get kid gloves?

Taxpayers fund their ski vacation but noone can comment on the devestation they've wreaked here in on main street USA?

Yeah, that's our government protecting the interests of the well-funded against the best interests of the public on whose dime the government, the well-funded and their fun are being funded.

You ALL work for us . . . you forget . . . for now.
HUFFPOST SUPER USER
rockyroad
05:12 AM on 02/14/2010
Eric,

Wow, Davos! Business is slow. I'll be defending the home front with the Feds all week but aside from that there's no business . . .. hope the snow and accommodations are good . . . I need some flex time . . . mortgage, tuition, health insurance . . for twenty-two years, my family has been nothing if not team players. Kids don't really need educations . . . we're moving back with my parents. Good. Kind of like the Great Depression.

Break a leg!

Call me.
01:48 AM on 02/14/2010
Self-determination is a theory that used to fit well with the 'idea' of America. It held that a person could control or change their destiny. Despite the obvious flaw in the theory, that of disregarding the amount of plain old luck that has been proven to go into a persons success or failure, it worked because people were able to achieve it. They were able to make it come true. The height of this was the prosperous period of US history 1944-1964, and that prosperity only came about because of gov't programs The GI Bill, The New Deal, etc. They created a situation where it made sense for people to work their butts off. If they did they would acquire a certain status in society (not the humiliation it now does) and a future-enough earning power to start a family and buy a house (with a five yr mortgage) Since then however, the ability for people to create their own destiny, such as it were, has been steadily diminishing. Bottom line is that until we return to a place where people can build a future on an ordinary job, and thus re-acquire that self determination that our fathers knew, or thought they knew, you ain't gonna get people to lift a finger. It doesn't make sense for them to.
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HUFFPOST SUPER USER
robotfog
Victim of Technology
11:21 AM on 02/14/2010
I know. Not everyone wants to be rich and famous. A lot of us just want to lead quiet and decent lives while we go about doing our jobs with reasonable pay and hours.
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HUFFPOST SUPER USER
FredBrighton
up the establishment!
08:25 AM on 02/15/2010
"you ain't gonna get people to lift a finger. It doesn't make sense for them to." Oh, I must oppose that sentiment. It is possible for people to work because work feels good. It is great to go out and work hard to grow your own food, or build a stone wall, take care of your goats... Artists work because they must create. We drag our cameras with us everywhere, stay in the studio til dawn and occasionally manage to sell something. People lift their finger when they feel good about themselves, when they want to stay a part of their own lives by growing good food, for instance. It's like children reading good literature during their summer vacation. Sometimes people do things, the right things, because it makes them feel like they are part of the life around them. When you toss in money it sometimes destroys that synergy and makes people sit on their behinds until the wages rise.
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Marcus01
It all just seems like it's real
12:08 AM on 02/14/2010
If it's good for the government and the corporations that own it, then it's good for America because it will continue to provide an endless stream of opportunities to fleece the public.
Linda from Deerfield
Paying attention
08:03 PM on 02/13/2010
I sincerely hope, Mr. Schmidt, that the humility, earnestness, principles, and responsibility that you see are not due to rose colored glasses.
06:31 PM on 02/13/2010
Doubtful Mr. Schmidt will read nor address my comment:

Q. "how we could channel turbulent global forces in a more positive direction so that everyone gains."

A. Spend two weeks in a homeless shelter (Detroit, Chicago, Oakland) clothes from goodwill, no cell phone, money, bodyguards, or current life accouterments. Find a job, stand in line for food stamps, unemployment, subsidies and see how that works out. See how comfy you are? Feel the impact of the traffic metrics, data driven evidence, behavior scoring, best practices, algorithmic processes, largess of government, and the peering eyes of technology into your every tick determining your worthiness.

In the past, many businesses in this country were the product long hours of sweat equity growing of an idea - companies from the bottom up. Others started in mail rooms and through hard work, worked their way up. The results were good stewardship for the humans who worked for them which is starkly amiss in today's business culture. A paradigm shift needs to occur in the hearts and souls of those at the top. Until you experience the full weight and impact of the decisions made at the top, it won't change.

You want to fix some of these issues Mr. Schmidt, you let me know. Because I am heartbroken to see what we are doing to each other on this planet when there are many good solutions, real solutions, most of them common sense.
10:27 PM on 02/13/2010
lessgovernment --- I applaud you for a well-written response !!!

Googol -- one followed by one hundred zeros ... this company is founded by the dreams of perverse wealth-creation with no social responsibility.
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HamletsMill
All Myth is Astronomy
01:36 AM on 02/14/2010
Very well said, sir. Fanned.
03:28 AM on 02/13/2010
Re Davos:
There is a fundamental unavoidable duality in all of nature encoded in the laws of physics e.g. at it' s most elementary level the electrons(along with nucei) dictates that our biochemistry behave both as particles and wave.No one as yet has discovered why? The Heisenberg "uncertainty principle' is only part of this reality .Apply these fundamental laws to macroeconomics and we must have the duality of "good and evil".Simply put it is moronic to believe that free enterprise capitalism (or any other- ism)is always good for society.Did anyone at Davos discuss the evil of "greed" that almost caused the banking system to collapse and the so called free enterprise system failed and in the US required TARP funds? Can a further collapse avoid a revolution by the masses as they lose homes jobs and savings due to the con game of globalization?.
Aside it really in our national security interest to provide free internet access to technology to governments who seek to do us harm but not doing so prevents another budding genius for realizing their full potential -Damn that duality ;)
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MyTake
Release the Hydrogen Economy now!
05:55 PM on 02/13/2010
Way too much logic here........good post.
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HUFFPOST SUPER USER
FredBrighton
up the establishment!
08:39 AM on 02/15/2010
There are no revolutions without the chance of success. People do not commit mass suicide, at least not in the US. In the past we could have revolutions because people worked with their hands. Farmers dragged oxen, beat horses, plowed fields, killed chickens. We got our hands bloody on a daily basis. Today's citizens have only seen violence on TV, unless they volunteered and in that case they will most likely side with the government they fought to "protect". Masses of people will not take to the street any more than dairy cattle stampede. Americans are, in fact, very lazy, very ignorant, very arrogant and greedy. That sort of person will not lay down their life for their neighbor or for some vague ideal like "liberty". What will change our government is when the world stops accepting dollars as a currency. THAT will attract our attention. We are the greatest threat to human life on the planet. People like that do not care about "the little guy" other than to tell lewd jokes about him.
03:00 AM on 02/13/2010
Re Davos:
Did anyone of importance discuss that greed and deregulation brought the international banking system to the verge of collapse.Put another way "free enterprise capitalism" is an oxymoron that is fuel for the economically ignorant.We forget quickly" but did not Paulson write a one page memo requesting billions of tax dollars which also released him from personal responsibility for the dispensing of the taxmonies" .Given the above facts "what reasons can be offerred to prevent a violent revolution?"
06:56 PM on 02/13/2010
Schmidt assumes that we need to improve on the status quo, that our futures should be decided by the unholy marriage of government power and corporate self-interest:

"Principles such as the benefits of free trade, free societies and free speech and, above all, open collaboration between business people and politicians who recognize that with freedom should come responsibility"

As we've seen so clearly in the last decade, this collaboration has given us too-big-to-fail financial institutions that empty national treasuries and hold the population hostage to unfathomable debt.

Media corporations collaborate with government to consolidate TV, radio and newspapers into a small number of empires that bombard the population with their homogenized worldview. Schmidt espouses "free societies" and "free speech", but these are the first casualties when corporations and governments collaborate.

Maybe there should be less collaboration and more regulation, prosecution and incarceration to ensure powerful interests don't trample on our free societies.

Schmidt and Google are right to stand up to political censorship on the web. They are right to challenge entrenched interests like Microsoft and the telecoms to foster innovation over monopoly control.

But I wish Schmidt wouldn't put a big, naive happy face on Davos. The last thing we need is more collaboration like we've had over the last decade.
04:08 PM on 02/12/2010
"Its economy continues to power ahead, generating jobs and innovation, competing increasingly not just on price and scale but on quality. The question is the sustainability and wider damage of an economic boom fueled by an undervalued currency."

Please enlighten me on the perils of an economic boom fueled by an undervalued currency.
I would be much more alarmed about an economic boom fueled by an overvalued currency.
01:58 PM on 02/12/2010
No disrespect, but it is a place of the rich and famous to come together and put the world to rights. I'm 25 and politically involved in every single subject that affects our world since since I could remember.

A couple of years ago, a more younger and naive me, read about Davos and taught to myself what would be the chances of me being there and give some of my ideas. Which btw I've been told are great ideas to combat poverty, hunger and focus more on efficiency.

What I came to find out was not only do you need to be invited to attend but the fee was also about $ 10000. Now you tell me, how should I , the next generation who wants to contribute and be part of the problem solving of today, should take this?
02:41 PM on 02/12/2010
Keep blogging and keep getting your ideas out there and maybe you'll get your chance. You've got my attention.
04:23 PM on 02/12/2010
Thank you, I find your post very encouraging.
03:35 AM on 02/13/2010
You should earn your way! Not every opinion is worth hearing and in fact may be repetition of some elses.Do you have any published articles and I don't mean in tweets or facebook
11:56 AM on 02/13/2010
Earn my way ? I'm not asking for a position of chairmanship or some sort of handout. I want my opinion as part of the human race to be heard. That's what all of us want. Young, old, male, female, white, black, straight, ga.y..I don't need to earn a seat at the table were the policies that effect the world are being shaped. It's my, just like everyone else's, birth right.

I find it a tad hypocritical of you to ask if i have any published articles which aren't written on facebook or twitter, when you yourself are stating your opinion on a blog. Or are the opinions of thesis writers the only one's that count.Millions of people use these type of sites to express their opinion. Don't patronize us.

Funny, when the high and mighty, the ones that claim they know it all and are defined by doctoral title know the answers to the world, have been running things for centuries now and guess what ? They couldn't fix a thing. We have more corruption, more starvation more inequalities.They couldn't even predict this global crisis and the ones that did were mocked.