At a large mid-day session hosted by CNBC’s Maria Bartiromo – think of a combination of the old Phil Donahue show and a hanging party – groups of Davosers (Davosites?) sat around tables and tried to affix blame for the debacle. The group was asked to assess questions such as: What was the greatest market failure? And what was the greatest regulatory failure. There was a lot of talk about failed models and regulatory regimes with poor incentives. But there was little talk of who was to blame.

At one point, somebody stood up and said, “It’s intriguing nobody is to blame. In other industries, there are consequences if you make toxic products that hurt people. Policy makers need to make it clear that there are serious consequences for that type of behavior.”

Big applause!

And yet aside from the odd mention of Alan Greenspan and an oblique reference to Robert Rubin, the former Treasury Secretary who became a senior executive at Citigroup, there was little talk of individual players who bore responsibility. Of course, you can make the case that the people who caused the damage have been punished: they didn’t’ get to go to Davos this year. Last year, Davos was thick with investment bankers and hedge fund managers. This year, the only true Wall Street bigshot I’ve seen is Stephen Schwarzman of the Blackstone Group.

It's an attitude that would have made World War II–era Britons proud. The economic state of the world has produced a grim new frugality in England, the likes of which haven't been seen since the end of food rationing in 1954. December retail sales showed same-store declines of 3.3 percent in what the British Retail Consortium said was the worst shopping season since it began keeping records in 1983. Sales would have been even more dismal if stores hadn't offered discounts that were the steepest (some slashed prices by 90 percent) and earliest in British retail history, according to a survey by PriceWaterhouseCoopers. In the same month, Britons bought 21 percent fewer cars than in the corresponding period of 2007, slashed their purchases of table water and champagne, and cut back purchases of clothing for the 14th month out of the last 15.

Among the few shops on High Street reporting increases: shoe menders, pawnbrokers and down-market discounters like the Aldi no-frills supermarket chain. The closing weeks of 2008 also saw the bankruptcies or financial collapse of no fewer than 10 big retail chains, from Woolworths to Zavvi, the former Virgin Megastores.

Applications for allotment gardens—small plots of land where city dwellers can grow their own food for a small fee—doubled in 2008 in cities like Warwick. On Amazon's U.K. Web site, bestsellers include "The Thrift Book," "Food for Free" and "The Penguin Handbook of Keeping Poultry and Rabbits on Scraps." Quantcast The shift to thrift is of course natural in hard times, as consumers worry about their jobs and shut their wallets amid the deepening gloom. This time, however, the clampdown on spending appears to be more than a sharp but temporary downturn of the economic cycle. In Britain, the U.S. and other consumer-driven economies, including Spain and Ireland, it seems to herald a much broader shift: the end of a way of life based on freewheeling consumption fueled by easy credit and the wealth effect of ever-rising asset values. Already, once spendthrift Americans have hiked their personal saving rate from near zero, where it's hovered for several years, to almost 3 percent in November. Merrill Lynch chief economist David Rosenberg expects the rate will soon rise to 8 percent and beyond, levels last seen 20 years ago. Just like overleveraged and undercapitalized banks, Rosenberg says, private households are now repairing their own balance sheets by spending less, saving more and paying off their debt. And just as in the financial industry, this is beginning to look less and less like a quick fix—and increasingly like a long-term change of habits.

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"EVERYTHING MUST GO!" blares a bright yellow sign at the Circuit City store on Broadway and 80th Street in Manhattan. The revolving doors whir with curious customers looking for bargains. As can be inferred from the huddles of dejected employees wearing bright-red Circuit City polos, this store will soon be closing, along with the other 566 outlets of the nation's second-largest electronics retailer, leaving 34,000 people unemployed. Circuit City must liquidate some $1 billion in merchandise by the end of March.

There was a time, not so long ago, that a company like Circuit City would have stuck it out by filing for Chapter 11, which is sort of the corporate world's version of rehab. A Chapter 11 bankruptcy filing gives companies breathing room from creditors in order to regroup and relaunch. Circuit City started down this path in November, but in mid-January it decided that rehab was too tough and threw in the towel. The company's move signals an alarming trend: more firms are deciding to forgo the time-consuming work of restructuring their finances, and instead selling off the inventory and fixtures and folding their tents. Sharper Image, Linens 'n Things, retailer Steve & Barry's, the department store Mervyns. All filed for bankruptcy with the intent of reorganizing. And all have wound up liquidating. "The reason we're seeing liquidation rather than bankruptcy from so many retailers is because people are hopeless," says Dean Baker, codirector of the Center for Economic and Policy Research. "We're still looking at a very bad year in 2009 and probably most of 2010, so it's very difficult to be optimistic about reorganizing and coming out of it stronger."

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China is the only major economy that is likely to show significant growth this year, because it is the only one that routinely breaks every rule in the economic textbook. There is no truly free market in China, where the state doctors statistics, manipulates the stock markets, fixes prices in key industries, owns many strategic industries outright, and staffs key bank posts with Communist Party members and tells them to whom they should lend, and in what they should invest. In fact, the main reason China is not slowing as fast as the other big five economies is its capacity for what economists ridicule, in normal times, as state meddling: it limited foreign investment in the banking sector and didn't embrace the exotic financial innovations that are the melting core of the global credit crisis.

Why does China's brand of command capitalism work? The question has long intrigued economists, who tend to cast the state as hopelessly stupid, the market as naturally brilliant. Now that the United States and Europe are moving toward state control—by nationalizing the banking and car industries, and imposing heavy new regulation on the financial industry—the question has a new urgency. China, the poorest and most chaotic big economy, looks like the one best positioned to navigate what may be the worst global downturn in seven decades.

Want the behind-the-scenes dish from Davos? Join NEWSWEEK's Dan Gross at 5 p.m. GMT (12 noon ET) on Thursday, Jan. 24, for answers to your questions.

It's a hot ticket for a cold place. Every year, hundreds of the world's business and political leaders converge on the Swiss ski resort of Davos for the annual meeting of the World Economic Forum. And no, it's not only a place to see and be seen.The exclusive, invitation-only gathering tries to shape the global agenda for the year ahead during five days of nonstop meetings, sessions, plenaries, receptions, lunches and dinners. The business is as serious as the celebrity spotting (previous draws have included Angelina Jolie and Richard Gere; Bono is a regular fixture.) Last year, the main topic was climate change; this year more than 2,500 delegates from 88 countries will focus on a theme entitled "The Power of Collaborative Innovation." But they'll talk about other things too. In a video preview, NEWSWEEK International Editor Fareed Zakaria discusses this year's likely headline-grabbers..