(FORTUNE Magazine) – Business conferences don't achieve real status these days, it seems, unless they attract throngs of rock-throwing, meat-eschewing, puppet-wielding antiglobalization protesters. And on the face of it, FORTUNE's summer gabfest in Aspen, Colo., looked liked a choice target. Members of the capitalist elite...a veil of secrecy...a deeply mysterious agenda...why, we could have been up to anything in there! How embarrassing, then, that not a single demonstrator showed up.

And yet, in another sense, the protesters were everywhere--in speeches, in hallway discussions, and, most of all, in spirit. "All these protesters from Seattle to Genoa are on to something," mused Bill Clinton, who argued that the world couldn't sustain a global economy if didn't also build a "global society." "Some of them are anarchists, but a lot of them have some very legitimate complaints," said former Secretary of State Madeleine Albright. Wondering why people kept returning to the issue, another participant likened it to "a little sore that everybody keeps scratching."

Maybe it was the image of that dead protester in Genoa, shot a few weeks earlier by riot police during a G-8 meeting. Maybe it was the thin mountain air. Or maybe, just maybe, people had started taking the protesters seriously.

It's an odd time to suggest such a thing, we know. The protesters who grabbed the world's megaphone two years ago in Seattle have never seemed so irrelevant--or misguided--as they have since Sept. 11. When they have not been blaming the U.S. for all the world's ills, they have blamed "globalization" for the recent terrorist attacks, as if Osama bin Laden were somehow aggrieved by IMF loans or steel imports. But it would be a mistake to write off their movement as a failure. In fact, they may have already achieved their main goal: fracturing a consensus that, in retrospect, looks almost as silly as the protesters' puppets.

They certainly have the attention of politicians, especially in Europe. In September, the French and German governments announced that they would sit down to discuss ways to tame globalization, including the so-called Tobin tax, a proposed levy on speculative financial flows that the protesters champion. "These people are not just cranks," said German Chancellor Gerhard Schroder, citing their concerns about "unequal trade relations or financial speculation that bring entire economies to the brink of ruin." French Prime Minister Lionel Jospin all but tossed the protesters a bouquet, declaring that France was "delighted to see the emergence of a citizens' movement at the planetary level."

True, the French were won over by Jerry Lewis, too. But the protesters' ideas have made inroads elsewhere, including in many of the institutions they most vociferously oppose. The World Bank, for instance, has embraced--critics say capitulated to--their goal of "sustainable development," edging away from huge infrastructure projects like dams and agreeing that economic growth alone isn't enough to reduce poverty. Meanwhile, the Bank has been cozying up to nongovernment organizations (NGOs) and other "civil society" groups who protesters say represent "the people." And across the street at the International Monetary Fund, pressure from groups like Drop the Debt has sped up debt relief for developing nations.

Corporations, too, have increasingly been changing their ways to appease activists. Stung by successful campaigns against their brands, multinationals like Shell and Nike have adopted much the same line as their NGO foes. "Because we, too, are concerned at the requirement to address those in poverty who are excluded from the benefits that many of us share in the global economy," stated Shell's then chairman, Sir Mark Moody-Stuart, last year, "we share the objective of the recent demonstrators in Seattle, Davos, and Prague." Perhaps oddest of all, money from consumer products giant Unilever has gone to the Ruckus Society, a group that trains anticorporate radicals how to hang themselves from a billboard, among other things. (Oh, the conditions a corporation must swallow when it buys Ben & Jerry's.) Talk about feeding the hand that bites.

All that is a marked shift from just a year or two ago, when pundits could dismiss the protesters as "a Noah's ark of flat-earth advocates, protectionist trade unions and yuppies looking for their 1960s fix," in the words of New York Times columnist and globalization booster Thomas Friedman. (When Friedman finally backed off his hard-line stance in a column last summer--acknowledging that at least some of the protesters were raising legitimate questions--it was considered something of a watershed event.) "The conversation really has changed," says Dani Rodrik, a Harvard economist who studies trade. "We've moved from a situation where the professional technocrats would pooh-pooh the protesters as a bunch of know-nothing retrogrades to one where that line has completely evaporated.... Intellectually, the battle is really won."

If so, it's not because of the subtlety of the protesters' arguments, which remain steeped in contradictions, Playskool economics, and a pre-industrial romanticism that would seem to advocate a return to medieval manors and bartering. But the role of demonstrators, notes Todd Gitlin, a New York University sociologist who has studied protest movements, is to demonstrate. The shouts on the streets can cause murmurs among the elites, he says, helping to advance the more reasoned critiques of insiders. "The protesters have prompted very thoughtful discussion among many of us on the other side of the barricades," says Sara Sievers of Harvard's Center for International Development.

Witness, for instance, the intellectual about-face on "hot money." Just a few years ago, the U.S. Treasury Department was hounding Asian countries to open their capital markets, lift their exchange controls, and let capitalism rip. Free trade is good for growth, the thinking went, so free capital movement must be good for growth too. It all sounded sensible enough. But the analogy had at least one flaw: Capital flows are prone to panics and manias. Trade flows are not. And in 1997, the countries that had followed Washington's advice were rewarded with the Asian financial crisis.

As capital fled Asia's once-roaring economies, sending millions back into poverty, official Washington blamed the debacle on "crony capitalism" in those countries. But the protesters had a different story line. They said the East Asian countries had been forced to globalize prematurely. The real culprit, declared one critic, was "the Wall Street-Treasury Complex," which used the IMF as a battering ram to open new markets for U.S. financial firms. The rantings of a conspiracy theorist? Actually, it's the critique of Columbia University economist Jagdish Bhagwati, a conservative free trade zealot who calls the protesters "nitwits." "We were overemphasizing the benefits of free movement of capital and underemphasizing the risks," he says.

Today the consensus for capital mobility lies in ruins. Says Joseph Stiglitz, former chief economist at the World Bank and recipient of this year's Nobel Prize in economics: "There wasn't just no evidence for it, there was evidence it was harmful. And the IMF looked the other way."

The consensus for free trade, by contrast, remains largely intact. Yet even here, skeptics have chipped away at the fundamentalist faith in trade uber Alles--the notion that there's no societal ill that free trade can't cure. Research by Harvard's Rodrik, for instance, shows that countries like China and India lowered trade barriers only after they experienced growth spurts--and even then they both maintained a selective mix of tariffs and other barriers. The countries that do best, Rodrik finds, do not simply fling open their markets and wait for trade to work its magic. They use trade as part of a homegrown strategy that includes building sound political and legal institutions.

At the same time, a growing body of evidence suggests that free trade increases income disparities within countries. In Mexico, for instance, the benefits of NAFTA--the Magna Carta of free trade agreements--have accrued mostly to the top 30% of the population, and particularly the top 10%, according to Stiglitz. "The bottom 30% actually did worse," he says. "There have been losers."

Of course, many of the protesters' solutions are problematic, to say the least. The Tobin tax, for instance, would stem the flow of hot money by taxing speculators and using the proceeds for development. Just one problem: James Tobin, the Yale economist who came up with the idea in 1972, says it isn't workable. Every government would have to impose the tax at once, he notes, and even then there would be loopholes. "I don't have the slightest thing in common with these antiglobalization revolutionaries," he told a German newspaper. "They're abusing my name."

Equally problematic are efforts to link trade with labor standards. Inconveniently for the protesters, poor nations have not appreciated their anti-sweatshop campaigns, fearful of driving off multinational companies that, after all, tend to pay about 10% more than local firms. "Those who are pushing for labor standards are actually damaging the developing countries they are purporting to support," says Kishore Mahbubani, Singapore's representative to the United Nations. "This is what I call the tragedy of good intentions."

Even the role of NGOs has come in for criticism. Activists promote them as the best way of giving citizens a voice in decision-making bodies that, they say, are undemocratic and beholden to corporate interests. But, the critics ask, who elected the NGOs? Institutions like the World Bank and the World Trade Organization are at least accountable to their member governments. Environmental and human-rights groups are accountable to no one but themselves. "NGOs have the right to be consulted, but they have no right to be involved in substantive decisions," argues David Henderson, former chief economist of the Organization for Economic Cooperation and Development in Paris and author of a new book, Misguided Virtue: False Notions of Corporate Social Responsibility.

So where does the discussion go from here? As FORTUNE went to press, members of the WTO were gathering in the remote Persian Gulf state of Qatar, in their first attempt to revive the trade round that died in Seattle two years ago. "A repeat of the failure of Seattle could condemn us to a period of hibernation," warned director-general Mike Moore, who once said the protesters made him "want to vomit."

Happily for him, Qatar is a repressive sheikdom where street protest is illegal. With only a handful of NGO representatives allowed inside the country, activists would be relegated to a single Greenpeace boat anchored off the coast. "It's so rude," complained Mike Dolan, an organizer for Global Trade Watch. "How do they think they're going to get away with this?"

Yet as the Wall Street Journal observed, there was also a sense that the WTO couldn't escape the protesters. That's because many of their issues were on the table this time, including the environment, labor standards, and more-stringent labeling for genetically modified foods. Moore worried that some of the issues could prove "deal breakers."

In a way, it was just like Aspen: The protesters wouldn't be there. But their ideas would.

For more about globalization, and for the full Aspen conference remarks of Clinton and Albright, check out fortune.com/newfuture.

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