Each year in late January, around 2,000 of the globe’s leaders – politicians, bureaucrats, business representatives and public intellectuals – make the annual pilgrimage to the Swiss town of Davos for the World Economic Forum (WEF). Many of the attendees arrive in private jets, leading to competition for landing spots.
Located in the German-speaking eastern part of Switzerland, Davos was the setting of Thomas Mann’s The Magic Mountain, reflecting its history as sanatorium for tuberculosis patients. At the end of World War Two, fleeing Nazis used the town’s German-owned hotels and businesses to transfer large amount of cash, gold and valuables out of the Third Reich.
There are competing events: St Petersburg International Economic Forum (SPIEF), the Boao Forum in Asia and the IMF/World Bank annual meetings. There are even counterculture equivalents: Ireland’s Kilkenomics (described as “Davos with jokes” or “Davos without hookers”) where discussion panels are moderated by comedians in the backrooms of pubs. But the WEF remains pre-eminent, the place to be seen.
In recent years, the WEF has focused on economic matters and the new global context, encompassing conflicts, instability and political, economic and technological changes.
In 2016, the WEF’s theme was “Mastering the Fourth Industrial Revolution”. It was designed to prepare leaders for a future shaped by technological change. The irony was that world leaders, few of whom have fully mastered their smartphones or basic computing equipment, discussed the technological future. Participants ignored the fact that much of what passes for new technology is familiar rent-seeking that destroys jobs, wage levels and exacerbates inequality, as owners of the technology benefit at the expenses of others.
It was also unclear where this future technological wonderland fits into a world of unsustainable debt levels, the intractable trajectory of climate change, the slowdown in Europe, Japan and emerging markets, conflict-driven immigration and geopolitical risk.
In 2017, the focus will be on “Responsive and Responsible Leadership” – code for the fact that the rise of populism poses a real or imagined threat to attendees’ view and control of societies and economies.
Over canapés and mineral water, WEF participants will focus on linguistically challenging concepts such as: geostrategic competition; new antagonists; global solidarity; exponentially disruptive change; a shared sense of uncertainty; the transformation of human identity, and the shift from traditional hierarchies to networked heterarchies.
Curiously, each year the agenda includes items that it was widely assumed world leaders had already solved in previous meetings, such as economic growth, environmental change, the global financial system, social inclusion, gender parity, and agriculture and food security.
The WEF’s laudable attempt to provide a forum for discussion of global problems illustrates the inadequacy of the architecture for dealing with these issues.
Many real decision-makers avoid Davos, dismissing it as a talking shop. Others bemoan its evolution into another “networking” or “thought bubble” event, overpowered by consulting firms and lobbyists.
The WEF highlights the narrow bandwidth of dialogue about important issues. Discussions on economic inequality take place with scant participation from employee representatives or workers. Gender issues are highlighted by the structure of the WEF itself, where less than 20 per cent of the participants are women.
WEF attendees are estranged from real life. It is difficult for those who live in a cocooned world of wealth or power, generally paid for by others, to understand the concerns of ordinary denizens of the planet.
The WEF is also synonymous with groupthink. Participants ignored warnings about the increasing risk of complex finance in the period before the Global Financial Crisis. Attendees continue to believe in “trickle down” economics, arguing that the problem of poverty has largely been solved. Meanwhile, the number of people living in poverty in sub-Saharan Africa (defined as living on less than $2 a day) has doubled to over 500 million since 1981.
The process lends itself to achievement by announcement and self-promoting and self-serving initiatives. In 2007, Nicholas Negroponte launched the “one laptop per child” campaign, aiming to bring cheap computers to developing countries, many of whom have no access to clean water, adequate nutrition or basic health and education services, let alone to electricity.
Appearing at Davos 2015, former US Vice President Al Gore and singer Pharrell Williams solved the problems of the environment through a second round of Live Earth concerts to take place across all seven continents, including Antarctica. Williams wanted humanity to harmonise all at once to stop climate change.
The earlier 2007 concerts were underwhelming. One Guardian journalist was baffled, reporting that David Gray and Damien Rice singing "Que Sera Sera", even with the lyrics changed to reference climate change, seemed to lack appropriateness.
The event did not attract the expected audience numbers, which organisers blamed on good weather, live Wimbledon coverage and a recent Concert for Diana. The proposed 2015 concerts were first postponed and then cancelled, in part because of the Paris attacks.
In reality, little of consequence ever happens at Davos. The real genius of Davos is the concept itself. Founded in 1971 by German-born economist Klaus Schwab, it taps into the world’s voyeurism and innate shallowness. The WEF exemplifies a trend that John Kenneth Galbraith (ironically one of the first guests at the event) identified: “To proclaim the need for new ideas has served, in some measure, as a substitute for them.”
Satyajit Das is a former banker. His latest book is 'A Banquet of Consequences' (published in North America as 'The Age of Stagnation' to avoid confusion with a cookbook). He is also the author of 'Extreme Money' and 'Traders, Guns & Money'
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