Guest Column

WEF is the death knell of capitalism

2017-01-22 06:36
A Swiss special police officer surveys the scene from atop the roof of a building during this year’s World Economic Forum in Davos in Switzerland. The annual meeting of policymakers, business tycoons and political leaders took place from January 17 to 20. Picture: Reuters / Ruben Sprich

A Swiss special police officer surveys the scene from atop the roof of a building during this year’s World Economic Forum in Davos in Switzerland. The annual meeting of policymakers, business tycoons and political leaders took place from January 17 to 20. Picture: Reuters / Ruben Sprich

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The annual World Economic Forum (WEF), described as the world’s most expensive – and probably most successful – public relations exercise, concluded in Davos in Switzerland this week. Contrary to a still widely held popular belief, encouraged by media coverage, this lavish talk shop is no UN affiliate; it has no democratic credentials whatsoever.

It is a private club whose members are 1 000 of the world’s richest and most powerful chief executives.

The WEF gathering is akin to a lavishly prepared master’s table, at which wannabe tycoons and various trade union and other supplicants gather in the hope of either being anointed as honoured servants or being given the promise of a few more crumbs from the table.

Primarily, though, it is the venue at which heads of state and government ministers are bribed, bullied and flattered to pursue policies that favour big business.

It also provides a platform at which leading members of nongovernmental organisations, along with the occasional pop sensation and movie star, can parade their hearts on their sleeves while sampling a caviar lifestyle in the Alpine air. Media praise singers and journalists, some sponsored by investment companies, add to the mix.

Radio, television and print media reports, along with the glitz and the glamour, ensure that the WEF is promoted as a crucial global event, concerned with the world’s wellbeing.

In 2008, when the ongoing global economic crisis really struck home, the theme of the WEF meeting was Improving the State of the World. President Jacob Zuma described the event as “fabulous”.

Yet, even then, the international trade union movement and human rights organisations, some of which were in attendance at Davos, lay the blame for the crisis on the very people hosting them.

Nothing has changed, and the themes for successive meetings have continued to reflect optimism among the world’s economic elite.

In 2009, for example, the theme was Shaping the Post-crisis World. A year later, with the crisis deepening, came Rethink, Redesign, Rebuild – followed by Shared Norms for a New Reality in 2011, The Great Transformation in 2012, and Resilient Dynamism in 2013. And now, amid growing concerns about still increasing inequality and instability, comes the theme of Responsive and Responsible Leadership.

Even as late as 2013, WEF founder and Swiss billionaire Klaus Schwab, was expressing “cautious optimism”.

He noted: “In some quarters the world appears to be on the road to recovery, despite the structural challenges of widening income disparities and fiscal deficits.”

Now, however, there is evident concern that the system has failed to correct itself; that something radical must be done. This was summed up in a Davos speech by International Monetary Fund head Christine Lagarde, who called on the meeting to consider “more redistribution [of wealth] than we have at the moment” to fix what she termed “the middle-class crisis”.

Given this background, it is easy to sneer at Davos and its pretensions to be working for the good of humanity. Those who see it as such could legitimately be categorised, in words attributed to the influential UK economist John Maynard Keynes, as possessing the “extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of us all”.

Yet it must be said that Davos reflects current reality: it is where the real power in the globalised world still lies.

But that power is under threat from what Lagarde and others at Davos referred to as “populism” and the growth of nationalism.

What they fail to acknowledge is the fact that the very system they — and Davos — represent is responsible for the conditions that have opened the way for demagogues and dictators of various hues to capitalise on ethnic, religious, linguistic and other differences that are causing the social fabric everywhere to start to fray and tear. It is a system clearly incapable of reform. In the words of US economist Professor Richard Wolff, “capitalism has hit the fan”.

Wolfgang Streeck, a German economic sociologist and director of the prestigious Max Planck Institute for the Study of Societies, based in Cologne, has also noted that there is no alternative on the horizon.

In his latest book, How Will Capitalism End?, he maintains that the capitalist system will not lose out to serious opposition; instead, it will consume and destroy its own foundations.

He writes that the volatile and uncertain world that the system has created “offers rich opportunities to oligarchs and warlords, while imposing uncertainty and insecurity on all others”.

He sees this as “being in some ways like the long interregnum that began in the 5th century CE and is now called the Dark Age”.

He may be overly pessimistic, but he, Wolff and a growing number of other analysts have underlined the reality that Lagarde responded to this week.

Unfortunately, even the proposal, floated at Davos, for an effective universal income grant seems like just another grasp at a straw of optimism.

It is a far cry from the truly responsive and responsible leadership the world needs – and which the WEF is incapable of providing.

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Read more on:    world economic forum  |  terry bell  |  davos  |  capitalism
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