The World Economic Forum still has a role to play if it moves with the timesby George Magnus / January 21, 2019 / Leave a comment
It’s mid-late January, and that means it’s time for the meeting of the World Economic Forum in the picturesque Swiss mountain village of Davos. Held annually since 1971, it kicks off later this week and draws in about 3,000 of the world’s leading politicians, corporate executives, financiers, academics, NGO representatives—and a fawning media. It’s the catwalk of the global elite.
Once a confident celebration of the virtues of globalisation, Davos has had to come to terms with a radically different global environment. It still has noble aims and it has always been a great networking event, at which important things happen at private meetings. Yet in the long shadow of the financial crisis, it has also become a bit of an anachronism.
It seems to belong to another era. In recent years, democracy, if we define it as consisting of free and fair elections, respect for the rule of law and parliamentary procedure, and institutions and norms that protect minorities and tend to their interests, has been on the slide. More and more countries have swung towards authoritarian or populist forms of government.
The global economic system and governance structure with which Davos was associated certainly needs reform, and while some attack Davos out of malice and jealousy, it has attracted deserved criticism for its focus on issues out of kilter with the concerns of most people—not to mention the cringe-worthiness of its corporatist-speak.
Who, for example, believes that this year’s theme, “Shaping a Global Architecture in the Age of the Fourth Industrial Revolution” doesn’t sound rather pretentious, when an alternative “Addressing the Redistribution and Employment Consequences of New Technologies” might have focused more minds more effectively on the challenge? Or what about last year’s theme “Creating a Shared Future in a Fractured World”? How did that work out, members of the World Economic Forum?
These are complex, multi-year challenges that require persistent attention, and a sensitivity about how we should frame policy in the public arena and private sector to cope with the consequences. Instead, annual changes in grandstanding themes convey an impression nowadays of fickleness and shallowness. In a poll of WEF members’ biggest concerns for this year’s gathering, at a time when the most pressing issues in the world economy include income inequality, the funk in productivity, infrastructure needs, and trade and Sino-Western relations, there were no economic and social issues among the top five, which were headed by extreme weather events, failure of climate change mitigation, major natural disasters, massive data theft or fraud, cyber security, and man-made environmental damage.
While we can all subscribe to the importance of these things, how can lists of biggest fears exclude the everyday concerns of people at the sharp end of a fractured world and the changing economy, still struggling with the consequences of what happened a decade ago?
To be fair, my criticisms here are not universal. Give credit for example to Larry Fink, CEO of Blackrock, the world’s biggest asset management company, who wrote in his annual “Dear CEO” letter this year (addressed to companies in which Blackrock invests peoples’ savings), that of course corporate bosses have to make profits, but they also have a responsibility to address social and economic issues, including environmental concerns, gender, race and income inequalities, the adequacy of retirement provision and the future of work and employment. Many of these things, in other words, don’t have to wait for governments to act, but can be addressed in the workplace.
And George Soros, the target of far right and far left criticism for the most disgraceful reasons, has persisted in the last year with strong opinions voiced at 2018’s Davos about the dangers posed by tech giants such as Facebook and Google, describing them as powerful monopolies that harm individuals, create obstacles to market innovation and undermine democracy. Criticising their anti-competitive behaviour, moreover, he praised the European Union’s anti-trust regulation of the tech companies. This “techlash,” as it has been called, has grown in significance, obliging tech companies to take note and consider redress. When Soros campaigns in this way, it matters—certainly more than a rant on social media.
The Soros-founded Institute for New Economic Thinking, moreover, beats a different drum from more conventional think-tanks and corporatist events like the World Economic Forum. Some of the trenchant topics on its research agenda include the role and management of finance, the governance structure of the global monetary system and the relationship between productivity, wages and market power. Issues such as these certainly get an airing in the bars and private meetings in Davos, but in all the years I went to the WEF, and subsequently as far as I can gauge, they just don’t pass muster formally for the organisers and attendees. And more’s the pity.
For all of this, I like the idea of Davos, love the setting. Political and economic leaders are all in the same place, and those who attend derive considerable benefits from being holed up there for a few days with peers and acquaintances, and from making new contacts. I think, though, it needs a management makeover, a more inclusive attendee list, more focus on work ethic than celebs, and an actionable agenda in which participants are urged to listen, learn, and leave to go home and implement solutions to our long list of issues as they can. Davos could even monitor progress and report back the following year.