Why is opposition to the World Economic Forum not crazy?

The World Economic Forum (WEF) and its long-time founder and CEO, Professor Klaus Schwab, are the subject of many absurd conspiracy theories. This non-governmental organisation, which this January will again bring together politicians, business leaders, journalists, academics and various celebrities in Davos, has been accused, among other things, of being a secret conspiracy of paedophiles who are using the Covid-19 pandemic to collect children's blood in order to bring about a satanic New World Order as quickly as possible.

But it is not crazy to see the WEF as a dangerous force in world politics. The WEF is a dangerous force in world politics. To paraphrase Joseph Heller, just because you are paranoid does not mean that the WEF is not after you. A shared distrust of the WEF unites the anti-capitalists of the left and the culture warriors of the right. But this distrust is based on a misunderstanding of what the WEF is really about today.

For many WEF critics, the organisation's nastiness can be summed up in one word: "neoliberalism". It is a term that conjures up images of plutocrats and unfettered markets destroying the planet and exploiting workers for profit. Funnily enough, President Schwab agrees with this assessment of the ills of the world. At one time, the WEF prioritised the necessity and benefits of economic globalisation. However, this has not been the case for many years. In October 2020, Schwab said:

The structure of our global economic system needs to be reassessed with an open mind. The most important of these is the neoliberal ideology. Free market fundamentalism has undermined workers' rights and economic security, unleashed deregulation and destructive tax competition.

How and where "free market fundamentalism" has run rampant remains a mystery. After all, we live in a world where most governments in developed countries routinely control 40% or more of their GDP.

Nor does the relentless growth of the regulatory and welfare state in countries such as the European Union, Britain and America suggest that free market radicals have been in power in Brussels, London or Washington for decades. In China, since 2008, the Communist Party leadership has steadily strengthened state control over an economy that has only ever been very partially liberalised.

To paraphrase Joseph Heller: just because you're paranoid doesn't mean the WEF isn't after you.

Schwab ignores these inconvenient facts and believes that the world needs a "big reboot". According to the WEF website, Covid, explaining the global reboot that awaits the world, exposed all the "inconsistencies, inadequacies and contradictions of many systems - from health and finance to energy and education". The whole planet needs a new 'social contract' to shape 'the future state of global relations, the direction of national economies, the priorities of societies, the nature of business models and the management of the global commons'.

Quite a list. But what adjectives, I ask, should be used to describe an organisation that proposes to coordinate the reorganisation of 8 billion people, 195 countries, international relations, social policy and a $104 trillion world economy? Words such as 'delusional' and 'megalomaniac' spring to mind.

A key concept in Schwab's vision of a rebooting world is "stakeholder capitalism". In his 2021 book Stakeholder Capitalism: A Global Economy that Works for Progress, People and Planet, Schwab defines it as "a form of capitalism in which companies do not just optimise short-term profits for shareholders but seek to create long-term value by taking into account the needs of all their stakeholders and society as a whole".

By wealth creation, Schwab means, in part, economic prosperity. But he also calls for the promotion of three other values: "people", "planet" and "peace". These rather broad concepts show the breadth of Schwab's stakeholder capitalism.

Who are the stakeholders working together to implement the four Ps? According to Schwab, they are "governments", "businesses" and "civil society" (NGOs, trade unions, etc.). This brings us to the heart of Schwab's great redesign. While Schwab appeals to predictable agents of revival, he is committed to political and economic arrangements formerly known as corporatism.

Schwab is quite unequivocal about this. In an article describing the origins of his current views, he writes:

This approach was common in the post-war decades in the West, when it became clear that one person or entity could only do well if the whole community and economy worked. There was a strong link between businesses and their community. In Germany, for example, where I was born, this led to workers being represented on the board of directors, a tradition that continues today.

Corporatism is a broad concept. It can range from the hyper-authoritarian version adopted by Mussolini's Italy to the worker-boss structures of post-war Western Europe described by Schwab. However, all forms of corporatism share some common themes.

One is the need to limit market competition in order to maintain social cohesion. Another is the need for cooperation between groups from different social and economic sectors - a process that government officials monitor and, where necessary, enforce for the common good.

You may ask, what could be wrong with this? The answer is: a lot.

First, corporatism - including its Schwabian expression - is not very liberal. It is about building and maintaining consensus in economic and social policy. For this reason, corporatism does not stand up well to dissent. In fact, it prevents any questioning of consensus, whether on tax rates or climate change.

The language of corporatism, like Schwab's WEF, may be coordinated consultation, but the agenda is control. For what matters is the alignment of views, no matter how absurd the idea or how great the cost of freedom.

This not only creates groupthink. It encourages the marginalisation of those who challenge the consensus. If you have reservations about open borders, for example, don't be surprised if you are labelled xenophobic. If you refuse to unionise your workers, you are likely to be branded a market fundamentalist who treats his workers as mere objects.

Another problem is the conspiracy and cronyism promoted by corporatism. Corporatist structures facilitate client relationships between companies and governments. This in turn produces insiders and outsiders.

The insiders are the companies that sign up to the consensus, play the corporatist game and thus thrive in their very comfortable relationships with governments. The outsiders are those who do not have the resources to grease the wheels. An example could be a young entrepreneur with a brilliant idea that could revolutionise an entire sector of the economy, but who has no political connections. Established companies rarely hesitate to use their connections to try to create regulatory environments, making it difficult for such entrepreneurs to compete in the market.

Corporatist stakeholder capitalism is quite ambivalent about democracy. The emphasis is on insiders negotiating among themselves and then presenting the public with a set of facts on everything from fossil fuels to ESG.

In Schwab's stakeholder capitalist model, there is little room for broader popular participation in the decision-making process, let alone popular approval of the decisions taken. Indeed, the model reflects a positive distrust of bottom-up initiatives because they are more difficult to monitor and are less likely to conform to established consensus.

As nations have discovered, corporatist ways of running the economy and society come at a considerable cost. At the economic level, corporatism discourages innovation, creates an inflexible labour market dominated by trade unions whose primary objective is to maintain the status quo, and creates market privileges for well-connected firms.

From a political point of view, even the milder forms of corporatism significantly disenfranchise the electorate and place an increasing number of important decisions in the hands of unaccountable bureaucrats. The EU's governance structures - and the democratic deficit they reflect - are in many ways an example of such arrangements.

This brings us back to the WEF. It has no formal political power and it cannot force anyone to do anything. Nevertheless, since its creation in 1971, the WEF has become an organisation that embodies the ultimate confidence that a certain kind of person is running the world from the top down. In his famous 2004 essay 'Dead Souls', the political scientist Samuel P. Huntington called this prototype the 'Davos Man'.

This clever label, which neither Schwab nor the WEF have ever managed to get rid of, was Huntington's short description of "academics, international civil servants and global corporate leaders and successful high-tech entrepreneurs" who thought alike and tended to regard national loyalties and borders as "relics of the past". According to Huntington, the Davos man also looked with undisguised contempt on those who were not on the programme - whatever its content.

Herein lies the deepest problem with the WEF. It is one thing for people to come together in an international context to discuss problems, share views and network. Business leaders, politicians and NGOs do this all the time.

It is one thing for an organisation like the WEF to decide that the time has come to reorganise the world from the top down and remake the planet in a corporatist image. Judging from Schwab's speeches and writings, the ideal Schwab is pursuing is something like a globalised EU, where its supranational and deeply entrenched bureaucratic ways are transferred to the international level and the levers of power are placed in the hands of the trusted men and women of Davos.

In short, it's easy to caricature the WEF and Schwab as resembling Ian Fleming's fictional Spectre and its criminal protagonist Ernst Stavro Blofeld. However, the agenda now being pushed at events like Davos is sufficiently alarming that anyone who believes in preserving things like freedom, sovereignty and devolution of power should be concerned.

The man from Davos should be warned: his Great Reset programme will face opposition.

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