Davos Elites Think Globally, Act Greedily

At the annual World Economic Forum, global elites gather to dream about solving the problems of capitalism through cooperation.

‘Every capitalist knows this about his worker, that he does not relate to him as producer to consumer, and [he therefore] wishes to restrict his consumption, i.e. his ability to exchange, his wage, as much as possible. Of course he would like the workers of other capitalists to be the greatest consumers possible of his own commodity. But this is just how the illusion arises – true for the individual capitalist as distinct from all the others–that apart from his workers the whole remaining working class confronts him as consumer and participant in exchange, as money-spender, and not as worker.’ (Grundrisse; my emphasis)

Apologies for plunging straight into a quote from Marx to begin this article, but it seems related to the illusion that animates the World Economic Forum, an annual meeting in Davos, Switzerland of capitalist movers and shakers, movie-star wankers, professional do-gooders, and Bono.

One striking thing about this elite gathering is how its participants believe that capitalists (or at least other capitalists) might look beyond their own profit interests to solve some of the problems that their beloved profit system generates.

Professor Schwab has a dream

The first WEF was held in January 1971, under the impetus of Klaus Schwab, a German economist who remains the event’s executive chairman. At first the meeting only brought together European capitalists, and it was called the European Management Forum (renamed the World Economic Forum in 1987).

The official WEF website says that Professor Schwab’s ‘‘inspiration’’ for creating the Forum was the ‘s’takeholder principle,’’ which states that ‘‘the management of an enterprise is not only accountable to its shareholders but must also serve the interests of all stakeholders, including employees, customers, suppliers and, more broadly, government, civil society and any others who may be affected or concerned by its operations.’’

You might say, then, that the Forum’s underlying concept is the idea – or the plea, really – that capitalists should broaden their vision beyond the narrow realm of their own profit chasing.

Today the WEF describes its mission as ‘‘improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas.’’

‘‘We live in a fast-moving, highly interconnected world, and our existing systems, structures and formal institutions no longer suffice,’’ Schwab notes. ‘‘Pressing global problems can arise quickly and without warning. . . . Today, to address these issues, the world needs a level of global cooperation that is increasingly difficult to attain, precisely due to the growing complexities and interdependencies in the world.’’

The WEF is meant to serve as a mechanism for this global cooperation. And it would be hard to argue against the need for cooperation, or to disagree with the description of today’s world as increasingly interdependent and interconnected.

But it is also pretty clear that there are some serious limits to the degree of cooperation possible between business leaders (and their political lackeys), not only in different countries but within their own.

And the reason is again related, in some ways, to that quote from Marx. As he points out, although it might seem logical for capitalists to cooperatively raise the living standards of workers (as potential consumers), each capitalist firm must also extract from its own workers as much surplus value as it can to remain competitive – for the unprofitable capitalist will not remain a capitalist for long.

Genuine cooperation to solve fundamental problems is out of the question in a society where there are not only irreconcilable class differences, but conflicts between the capitalists themselves, who are competing against each other in domestic and global markets.

Lots of problems, few solutions

Yet the WEF remains upbeat about the potential for alleviating global problems through cooperation spearheaded by business leaders. Its website claims that the ‘‘Forum’s experience since its foundation in 1971 shows there are few issues that cannot be adequately progressed by convening the most relevant actors from all sectors – business, government and civil society – in a high-level, informal environment of trust.’’

But the experience of seeing the WEF, every year, address the same sorts of global problems – unemployment, environmental devastation, gender inequality, poverty, corruption, armed conflict, and so on – suggests that some issues have hardly been ‘progressed’ at all.

The gap between the awareness of the problems, and the inability to do much about them, is striking. In its numerous reports, the WEF list up issues that attest to the dismal reality of capitalism, but in most cases offers only the vaguest proposals or wishful thinking in response.

For instance, its Global Agenda Council on Fragile States and Conflict Prevention notes that, ‘‘Some 1.5 billion people in an estimated 40 countries live in an environment marked by persistent conflict and fragility . . . confronted by a myriad of simultaneous and often overwhelming challenges, including armed conflict or political violence, serious and persistent human rights violations, and threats from organized crime and terrorist networks.’’

And then, in the very next sentence, we are told that, ‘‘Viewed through a different lens, however, today’s fragile states are potentially tomorrow’s emerging markets. More than three-quarters of states classified as ‘fragile’ possess extensive mineral and energy resources and post impressive growth rates.’’

Similar examples can be found in the WEF report, ‘Outlook on the Global Agenda 2014,’ ‘which lists the ten ‘‘most pressing issues’’ of the coming year; these include widening income disparities, persistent unemployment, diminishing confidence in economic policies, and a lack of values in leadership.

After the report notes, for instance, how ‘‘growing income inequality is an issue of central importance’’ and lists various concrete manifestations of this inequality, it clings to the haziest of solutions:

‘‘In order to counteract income inequality, it’s essential to tackle poverty in an integrated way that has a long-term impact. We need to give people the capacity to be resilient, to take on challenges and to learn the skills they need to work toward more prosperous futures.’’

Similarly, the report recognizes that the world faces ‘‘persistent structural unemployment’’ (and is careful to warn that it will escalate social unrest if not addressed), but can only offer the vague hope that governments will ‘’create regulatory structures that encourage employment and economic stability.’’

The same contrast between a fairly clear recognition of the problems and a lack of solutions is on display in the WEF’s Global Risks Report, listing the ‘‘ten global risks of highest concern.’’

The top risk for 2014 is ‘‘financial crises in key economies,’’ followed by such problems as ‘‘structurally high unemployment/underemployment,’’ ‘‘severe income disparity,’’ and ‘‘global governance failure,’’ as well as problems related to the natural environment. The report reads like an indictment of capitalism, even though it tries to claim that the problems can be solved or alleviated, provided there is adequate global leadership.

Conspiracy or dunces?

The conspiracy theorist might like to imagine gatherings such as the Forum at Davos as rather sinister events, where corporate elites hatch their evil plans. But that is almost a comforting notion; as if the capitalist system could yield to plans or control, rather than simply being the composite of all the narrow-minded economic actors chasing after their own profits by whatever means necessary.

In fact, the business savvy of global corporate elites does not lend them the power to shape, or even foresee, the future direction of capitalism. They are along for the ride like the rest of us, although travelling first-class.

‘‘Cautiously optimistic’’ is the verdict most likely to be offered by one of these elites when asked to comment on where the global economy is headed in 2014 and beyond. In other words, ‘‘Fuck if I know.’’

But that is not to suggest that the problem comes down to a lack of intelligence on the part of those elites, as Leftists are prone to argue. None of us can predict, exactly, what the coming years will bring for the capitalist economy, just as Marx, in his day, was not able to predict the exact moment when a general crisis might break out. Certainly we can be ‘‘confidently pessimistic,’’ as Marx was, about what our life will generally be like under capitalism, knowing its fundamental contradictions, but that does not make us fortune tellers.

What we can feel safe to predict, though, is that the comforting talk at Davos about working together to improve the world for all ‘‘stakeholders’ ‘won’t do much if anything to change the actual behaviour of capitalists and capitalism.


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