DAVOS, Switzerland
A CENTURY and a half ago, the Swiss Alps experienced a storied tragedy. An international team of seven climbers, linked together on a rope, ascended the Matterhorn, which had never been climbed before. All went well on the way up. It seemed so easy. But on the way down they slipped and fell. The rope connecting them was not as strong as expected. It broke, and four went down into the abyss. Three were saved, but bitter recriminations followed the survivors to their graves.
Even as late as a year ago it still seemed so easy with an economy climbing ever upward. Any downturn was expected to be short and shallow. "A global recession was simply inconceivable," said Stephen Roach,
Now that the bears have savaged Goldilocks, I heard an American businessman ask: "Did we oversell bare-knuckle capitalism?" The resounding answer was "yes."
And if Asians hoped that the rope linking them to western financial systems would break, saving them from a fall - the famous decoupling theory - they are facing a stark disappointment. China's premier, Wen Jiabao, told Davos that he still hoped for an 8 percent growth, but even that would be down from 13 percent, and many economists worry that Wen is too optimistic. The world's economies are falling together, and either the rope connecting them will save them, or they will all disappear together over the cliff.
Just as superstitious people of yore once feared to name the devil lest he appear before them, delegates to the World Economic Forum shied away from the D word. Some came close. Paul Krugman, a Nobel Prize-winning economist, had a column in the International Herald Tribune calling this a "crisis whose only real precedent is the Great Depression." The Financial Times's economic expert, Martin Wolf, called it a "proto depression" at a Davos panel.
But others demurred. Stephen Roach told me that he wouldn't consider it a depression until production shrank 30 percent, and unemployment rose to 30 percent. One of the few cassandras who predicted impending doom, Yale economist Robert Shiller, puts the bar a little lower and adds a time element. He says that he would begin calling it a depression when unemployment rose to 15 percent and lasted for five years. He added that that is very likely to happen.
Last year, the economic shift from West to East - the rise of China and India as economic powerhouses - was the topic of conversation at Davos. This year, it was the shift from free markets to state-run economies. "The pendulum has swung, and power has moved back to governments," according to the forum's founder, Klaus Schwab.
For someone like myself who came of age in the Cold War '40s and early '50s, it was with jaw-dropping astonishment that I heard a Russian leader and former KGB man, Vladimir Putin, lecture the West about putting too much economic power into the hands of the state. "We paid a very dear price for that" in the Soviet Union, he said.
It was a Turkish businessman who warned of a "social crisis that we should keep in mind." For when economies collapse, bad things happen. The beast comes to poor countries first, but the potential of social upheaval awaits the rich too. Think of the 1930s and the surge of communism and fascism. Recession-related strikes and demonstrations have already bedeviled France, Russia, and Britain. The riots that spread from Greece could be a foretaste of worse things to come.
"Marxism is back," said Oxford historian Timothy Garton Ash. "A young, educated person who can't get a job looks about him and says 'It's the system's fault, not mine.' " There are worries about a new wave of leftist violence in Europe, reminiscent of the Baader-Meinhof, Action Directe, and Red Brigades, which tortured Europe in the 1980s.
The world is sliding downhill fast, and no one can say if the rope will hold.
H.D.S. Greenway's column appears regularly in the Globe. 
