This week is Davos week. In normal times, presidents, prime ministers, politicians, big business shots, and “thought” leaders would gather at Davos, Switzerland in the annual meeting sponsored by the World Economic Forum. Around the conference venues scores of mostly young people would demonstrate against this modern-day “Holly Alliance” that tries to shape the global order. Due to covid-19, however, the in-person gathering has been postponed for the summer. Still an online collection of papers and speeches are available in case you are interested.
The WEF was set up by a Swiss, Klaus Schwab, some 50 years ago. The purpose was to bring together important figures to ponder about big world problems and propose solutions. Over time, it became the Alpine substitute of sunny golf course hobnobbing. As David Gelles of New York Times put it “Davos is a weeklong schmooze fest where billionaires and autocrats mingle; companies make climate pledges; and economists discuss inequality.” And of course, once the last good-byes are over, all goes back to square one. The following year the same, more or less, participants come back, with renewed determination to meet the last year’s promises.
Anand Diridharadas (author of Winners Take All) has a more damning opinion about Davos and similar congregations of the rich and powerful. He writes if we expect the same people that have brought us all that ails the world to remedy our problems, then we are fooling ourselves.
On paper, the aims of the WEF sound lofty. In 2020, following the adoption of Stakeholder capitalism by the Business Roundtable, the WEF went all out for it in its annual meeting. Stakeholder capitalism has been a dear topic to WEF founder K. Schwab. A bit defensively, he has clarified that his intention is not to change the economic system but rather to turn it to responsible capitalism. He should not worry. Given the characters he invites to his big party not only the economic system is not in danger of being changed; responsible capitalism is hardly in the distant horizon. As the New York Times has reported, the same big companies that make idealistic proclamations for social progress and climate sustainability are those making hefty contributions to the campaigns of politicians that fight both.
Twenty-twenty was not a good year for WEF. Covid had turned into a pandemic and countries started to come down on their people with lockdowns and mandates. There was also talk of fast-tracked vaccines to be administered on a global scale. Unwittingly, WEF’s theme for 2020 was The Great Reset. This did not go well with the nascent movement of vaccine conspiracists. The Great Reset aimed at resetting the direction of national economies, the priorities of societies, the nature of business models, and the management of global commons. To conspiracists, this sounded like a Big Brother takeover of peoples’ lives. The fact that Bill Gates, one of the high priests at Davos, is also the champion of global health projects, including vaccines and vaccination programs, didn’t go well either with conspiracists.
Setting aside the fear and paranoia about The Great Reset, there is mainstream criticism of the WEF and its operations both from the right and the left. Michael Rectenwald, Chief Academic Officer of the conservative group American Scholars, wrote a scathing piece in Imprimis, a publication of Hillsdale College. He decries WEF’s stakeholder capitalism as disguised corporate socialism or communist capitalism. He claims the WEF-endorsed index of Environmental, Social, Governance (ESG) principles is a tool to squeeze out nonconforming firms that score low. To him the true goal of The Great Reset is to allow few big corporations to monopolize economic activity around the world. He writes that whereas China moved to combine communism with capitalism, the West is moving (under the influence of WEF) toward a combination of democracy with economic socialism.
On the left, Ivan Wecke writes in the online forum Open Democracy that WEF sponsors a version of stakeholder capitalism in which governments are reduced to one of the multiple stakeholders to be managed and catered to by big corporations. In other words, big business is willing to adopt stakeholder capitalism because it will place it at the driver’s seat. To Wecke, the signing of a strategic agreement between the UN and WEF in 2019 is proof of how the closed club of WEF bosses intends to replace the world body in cross-national negotiations. Wecke says: look at how Big Pharma succeeded to kill the WHO initiative to suspend the intellectual rights on vaccines that could speed up production for the benefit of poor countries.
Excoriated by fringe and mainstream critics, WEF chose for its 2022 meetings the theme The Year to Rebuilt Trust. How can you build trust though when those writing the music score are unelected corporate bosses and the average Joe and Jane are not invited to the party. There is a sprinkling of community and social entrepreneurship leaders invited but only to be charitably congratulated for the work they do to mitigate part of the social and environmental damage done by the corporate chieftains. We keep failing to recognize that as we lengthen the distance between those at the top of decision making and those at the bottom, we help create swamps of distrust and fantastical scenarios. Gatherings like that in Davos add insult to injury when they tell the rest of us “Here, see. We care about the world and because we know your problems and concerns, we ‘ll find win-win solutions for everybody.” It doesn’t work like that.
If the Davos gatherings serve anything is as a testing ground of ideas about governance models and the place of big business in them. There seem to be three distinct models emerging. One is Putin’s system in which big business (the oligarchs) pledge obedience to an autocratic head of state in exchange for political cover. The second is the Chinese model, in which big business serves the Communist’s Party agenda. And the third model is the Western one. Here power is still more diffused between politicians, elites, business, and ordinary folks. Big business buys influence through campaign contributions and funding “think” tanks. To appease the people, big business engages in some popular causes that eventually are shaped by legislation under the influence of campaign money. And so the world turns.
Expect next year the Davos theme to be one that aims to reassure us that they are on the right track and, oh yes, they do feel our pain.
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