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Davos searches for meaning with capitalism in crisis

The World Economic Forum, the most concentrated gathering of wealth and power on the planet, will begin once again amid a natural fortress of snow and ice in the Swiss Alps. President Donald Trump is jetting in for a scheduled address. Dozens of other world leaders are in attendance; a who's who list of chief executives, fund managers, oligarchs and a smattering of celebrities will join the throngs cramming the pop-up pavilions and swanky hotel parties of the otherwise sleepy mountain town.

This year's conclave will be the 50th since it began in 1971, marking a fitful half-century of political turmoil and economic boom and bust. For years, Davos — that is, the conference of global leaders for which it has become synonymous — has represented the apotheosis of a particular world view: an almost Promethean belief in the virtues of liberalism and globalisation, anchored in a conviction that heads of companies can become capable and even moral custodians of the common good.

The disruptions and traumas of the past decade have sorely tested Davos's faith in itself. The archetypal Davos Man — the well-heeled, jet-setting “globalist” — has become an object of derision and distrust for both the political left and right. Financial crises, surging nationalist populism in the West, China's intensifying authoritarianism and the steady toll of climate change have convinced many that there is nothing inexorable about liberal progress. A new global opinion poll of tens of thousands of people found that more than 50 per cent of those surveyed now think capitalism does “more harm than good”.

Each year, the forum is accompanied by an unsurprising airing of cynicism in the media. “It is [a] family reunion for the people who, in my view, broke the modern world,” Anand Giradharadas, an author and outspoken critic of billionaire philanthropy, said in a TV interview last year. Can Davos “keep its mojo?” The Economist asked over the weekend. “Once a beacon of international co-operation, Davos has become a punchline,” the New York Times noted.

Klaus Schwab, the forum's octogenarian founder and executive chairman, is convinced that the current moment needs more Davos, not less. In the run-up to this week's meetings, he announced a new “Davos manifesto”, calling on companies to “pay their fair share of taxes, show zero-tolerance for corruption, uphold human rights throughout their global supply chains, and advocate for a competitive level playing field”. Such an ethos, Schwab contends, will go a long way to redressing the world's inequities and may help governments meet the climate targets set by the 2015 Paris Agreement.

“Business leaders now have an incredible opportunity,” Schwab wrote in a column published last month. “By giving stakeholder capitalism concrete meaning, they can move beyond their legal obligations and uphold their duty to society.”

Schwab's extolling of “stakeholder” capitalism — a riposte to the profit-maximising Western orthodoxy of “shareholder” capitalism — is supposed to be a call to action. Activists, though, may argue that it is not enough.

In a study timed in conjunction with the World Economic Forum, Oxfam found that the world's billionaires control more wealth than 4.6 billion people, or 60 per cent of humanity. “Another year, another indication that the inequality crisis is spiralling out of control. And despite repeated warnings about inequality, governments have not reversed its course,” said Paul O'Brien of Oxfam America in an e-mailed statement. “Some governments, especially the US, are actually exacerbating inequality by cutting taxes for the richest and for corporations while slashing public services and safety nets — such as healthcare and education — that actually fight inequality.”

And some Davos attendees concur. “The economic pie is bigger than it's ever been before in history, which means we could make everyone better off, but we've chosen as a society to leave a lot of people behind,” Erik Brynjolfsson, director of the MIT Initiative on the Digital Economy, told my Washington Post colleague Heather Long. “That's not just inexcusable morally but is also really bad tactically.”

Reading from a totally different script, Trump is expected to wax lyrical about the success of his economic and trade policies. In the past, his bullying measures and fondness for tariffs have ruffled the Davos set.

“Although the President has been inconsistent in how he has carried out his world view, he has made clear that he has no plans to back away from his strong-arm tactics even as they have increasingly antagonised American friends and foes alike, leaving the United States potentially more isolated on the world stage,” wrote my Post colleagues Anne Gearan and John Hudson.

Trump is also likely to be challenged in Davos by a growing cohort of climate activists and policymakers. On the same day of his speech, Swedish teenage campaigner Greta Thunberg is expected to berate politicians and finance executives who still invest in fossil fuels. Although Trump almost certainly will not heed Thunberg's call, representatives of major companies attending the forum are desperate to show how they are adapting their business models to accommodate climate concerns.

Two years ago, Schwab drew criticism for what was viewed as an awkwardly ingratiating speech to welcome Trump to the forum. Now, he's more at odds with the US President, not least on the urgency of the climate crisis.

“We do not want to reach the tipping point of irreversibility on climate change,” Schwab told reporters. “We do not want the next generations to inherit a world which becomes ever more hostile and ever less habitable.”

Ishaan Tharoor writes about foreign affairs for The Washington Post. He previously was a senior editor and correspondent at Time magazine, based first in Hong Kong and later in New York

Davos founder: Klaus Schwab (Photo/Markus Schreiber)

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Published January 21, 2020 at 8:00 am (Updated January 21, 2020 at 7:28 am)

Davos searches for meaning with capitalism in crisis

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