World Economic Forum pledges market solutions to market problems

Issue 

If you intended to remedy the global collapse of fishing stocks, the last thing you would do is book a date with Japanese whalers at an upmarket seafood restaurant.

Similarly, if you were writing a book on human rights, asking Kim Jong Il to write a chapter might undermine its credibility.

By the same logic, inviting the world’s corporate and political elites to a ski resort in the Swiss Alps to discuss the growing disparity between the world’s rich and poor is distasteful and ludicrous.

Yet this is exactly what occurred over January 26-30 when the World Economic Forum (WEF), which brings together representatives of governments, corporations and major media outlets, held its annual gathering in Davos, Switzerland.

The Global Risks 2011 report was a product of this meeting of minds.

The most significant risks identified include economic and global government failures, macroeconomic imbalances and the water-food-energy crisis.

WEF founder and executive chairperson Klaus Schwab said in the report’s preface it “is a useful tool for policy-makers, CEOs, senior executives and thought leaders around the world”.

Presumably, the general public would find the report’s contents too complex and need not bother themselves with such petty information as the state of their world.

The report lists economic disparity (both within and between states) and “global governance failures” as “the two most highly connected risks … perceived as both very likely and of high impact”.

It says: “Economic disparity is tightly connected with corruption, demographic challenges, fragile states, global imbalances and asset-price collapse.”

It also notes the tendency of economic disparity and “geopolitical conflict” to reinforce each other.

That a school student might as easily have concluded the same without spending a week at a Davos resort is beside the point, it seems.

The clearest post-forum analysis came from London’s Financial Times correspondent Gideon Rachman, who said on January 28: “Closeted together in a mountain valley, they [the attendees] restate their commitment to a single, global economy and to the capitalist values that underpin it.”

Rachman points to the real problem: the “capitalist values” advanced by corporations and governments that caused the problems the WEF gathered to discuss were reaffirmed by those responsible for imposing them in the first place.

The very people constituting the WEF are representatives and flag-bearers for the brutal, international capitalist system responsible for many of the ills the forum is supposed to address.

The report discusses economic disparity as though it were somehow an unexpected and surprising development: “[While] there is disagreement over the findings, the risk of rising economic disparity, even in terms of perception alone, is concerning.”

It describes economic disparity as a “trend” and pontificates over possible causes — none of which, the WEF believes, involve 30 years of adherence to neoliberal, free-market economics.

Rather, the causes include “erosion of employment culture, the decline of organized labour, and failures of education systems to keep pace with the increasing demands of the workplace”.

In US academic Noam Chomsky’s 1994 book, The Prosperous Few and the Restless Many, he presents an alternative view of the causes of economic disparity.

“[T]he amount of unregulated capital in the world … accelerated what’s called globalisation of the economy,” Chomsky writes.

“That’s a fancy way of saying that you export jobs to high-repression, low-wage areas — which undercuts the opportunities for productive labor [sic] at home …

“[Globalisation] extends the Third World model to industrial-countries. In the Third World, there’s a two-tiered society — a sector of extreme wealth and privilege, and a sector of huge misery among useless, superfluous people …

“It imposes a neoliberal ‘free market’ system that directs resources to the wealthy and to foreign investors, with the idea that something will trickle down by magic.”

If the WEF was serious about finding real solutions to “economic disparity and global governance failures”, a good first move would be to come down from the mountain resort and hold future meetings in one of the world’s slums where an estimated 1 billion people live.

Ordinary people living in abject poverty in areas such as the favelas of Brazil or in one of the innumerable refugee camps in Africa or the Middle East would no doubt relish the chance to take part in formulating solutions to the economic disparity and governance failures that cause their suffering.

In the January edition of The Atlantic magazine, Chrystia Freeland said in an article titled “The Rise of the New Global Elite” that the real risks facing world rulers could ultimately come from a totally unexpected quarter.

“The real threat facing the super-elite, at home and abroad,” Freeland said, “isn’t modestly higher taxes, but rather the possibility that inchoate public rage could cohere into a more concrete populist agenda …”

In a February 14 Time.com article, Michael Elliot pondered the global financial crisis and the millions of lives affected by it. He asked: “As they looked to the sunlit uplands at the Schatzalp, did the Davos attendees this year feel a chilly breath from those who have not yet felt any warmth at all from the recovery?

“If they were wise they did.”

Comments

Hey,

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May I use some of the information from your blog post above if I give a backlink back to your site?

Thanks,
Daniel

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