DAVOS, Switzerland -- Among the less helpful ideas that has managed to endure despite a reappraisal of economic wisdom is the notion that faster-growing countries -- principally, China and India -- would prove so robust that they alone could propel the planet. They could spare the globe a synchronized economic downturn, even as Europe, the United States and Japan remained mired in stagnation.
Economists came up with an appropriately silly name for this idea: decoupling, as if the former union between the rich and developing worlds had yielded an amicable divorce. But here at the annual World Economic Forum in Davos, this concept seems to have been finally laid to rest. A common-sense view prevails among the economists, government officials and international business executives gathered here, albeit one that can only be described as dispiriting: When things are bad in many places, pain spreads without respect to national boundaries. The world's economy is indeed global. There is no getting off this ride.
Dennis Nally, chairman of auditory and tax advisory giant PricewaterhouseCoopers International, laid out the details of a global survey of chief executives on Tuesday evening, describing a broad view of trouble laying in wait on nearly every shore, from continued anxiety over the fate of the eurozone, to weak growth prospects in the United States and a cooling economy in China. Only 15 percent of the roughly 1,200 chief executives surveyed in some 60 countries expect the global economy to improve this year.
"CEOs, bottom line see the year ahead as being very challenging," Nally said. "Confidence levels are down." (Though not, apparently, at PricewaterhouseCoopers, which poured Laurent-Perrier champagne to journalists gathered in a room garlanded with orchids at the Belvedere Hotel, the Romanesque fortress that stands guard over the town's main promenade.)
"It really points to the issue of how interconnected the global economy really is," Nally said.
But just as one form of decoupling has been laid to rest, another form is quietly emerging, one that ought to be capturing primary attention among policymakers: In many of the world's major economies, growth and unemployment are no longer connected. The world's most successful companies have proven adept at wringing profits out of lean growth prospects, and they have mastered the art of boosting revenues without adding workers.
Indeed, even as the CEOs in the PwC were fretting over the fate of the global economy, 40 percent were anticipating growth in their own revenues in the coming year, a testament to what is becoming the defining business skill of the age: How to make money even while billions of people don't have any.
This is worrying in the extreme, and not only for people who depend upon paychecks. If this disconnect continues unchecked, the globe will increasingly be divided into haves and have-nots, each inhabiting starkly different realms.
In the United States alone, millions of people unable to earn their way will essentially find themselves tossed out of the economy, and rendered dependent upon handouts and luck in place of decent jobs. People of means will increasingly take refuge in gated communities and exclusive clubs where they are able protect themselves from the resulting social upheaval.
How are businesses supposed to succeed in such a climate? For now, many are prospering by aiming their goods and services at consumers with spending power, while cutting costs. But unless every company plans to transform itself in Luis Vuitton and BMW -- brands that capture premiums from the slice of the world that can shell out for luxury -- firms will eventually run out of customers able to absorb their wares. In the end, the ability to consume depends upon the ability to work.
For now, however, companies are busily putting off that reckoning, as underscored by the Pricewaterhouse survey.
The people running the world's most prominent companies are well aware that much of the planet is effectively in trouble, with even former bastions of super-growth succumbing to slowing. Among chief executives with business in China, confidence declined by 21 percent compared to the year previous, the survey found. In India, confidence plunged by a third.
Yet these executives remain confident in prospects for their own firms -- a testament to their successful adjustment to the times to seem permanently lean. Two-thirds of those surveyed said they planned cost reductions this year. One third planned to outsource some part of their production.
Why would they do otherwise? Banking on sustained economic recovery would be akin to betting on profits falling from the sky. Many of the discussions at this year's global gathering are about the supposed breakdown of capitalism, the rise of economic inequality, and the need for new models that can broaden the benefits of what prosperity can be delivered. A shared sense of dysfunction is palpable.
Whole sessions are devoted to the consequences of China's economic slowdown and the dislocation that will result inside a country in which hundreds of millions of formerly poor farmers have become dependent on jobs in coastal factories, which are feeling the effects of diminishing spending power in the lands that buy their goods -- Europe, the United States, Japan.
Over lunch with a room full of journalists on Wednesday, George Soros described the enduring crisis in Europe in terms unlikely to provoke good cheer in Brussels, with members of the eurozone refusing to marshal the resources necessary to dispel worries about their shared currency. The only policy so far capable of garnering consensus has been the perpetual embrace of growth-killing austerity.
"This outlook is truly dismal," Soros said. "Without a clear game plan, Europe will remain mired in a larger vicious circle, in which economic decline and political deterioration continue to reinforce one another."
All of this grief is unavoidably global in scope. If Europe remains weak, so presumably will orders from Europe for Chinese goods. If Chinese factories slow further, so will demand for steel, which spells less demand for iron ore harvested in Brazil, Australia and India, and less need for heavy equipment forged by Caterpillar at its factories in Illinois and around the globe.
And yet the best companies have already mastered this dynamic, stockpiling cash, holding back on hiring, squeezing greater production out of fewer hands.
It is an equation that is working well for successful corporations and their shareholders, and badly for everyone else.