The annual Davos bunfight got underway again on Wednesday. Given ongoing global economic uncertainty, it is significant that this is the biggest-ever gathering in the 44 years of what is now known as the World Economic Forum (WEF).
However, notably absent this week were the movie and media celebrities who have, at previous gatherings, been provided a glittering platform on which to parade the hearts on their sleeves. Such froth was clearly seen as unnecessary at a time when even the most diehard market bulls concede that the crisis is far from over.
In a world awash with surpluses, debts, and the dangers of defaults, desperation was in the Davos air as the billionaire tycoons assembled. If history is anything to go by, many of the politicians, trade unionists and community decision makers who are their guests will be in awe of everything on offer as they are bribed, subtly bullied, and otherwise persuaded to help shore up the crumbling edifice of a system their hosts epitomise.
Against this background, it is small wonder that several liberal apologists for the system have joined much of the labour movement in taking more of a cynical view of the goings-on at Davos this year than they have in the past. Despite the plethora of media coverage the WEF will get, they feel that few really meaningful debates will take place amid the wheeling and dealing in the Swiss resort this week.
Among the pro-capitalist critics is Clem Sunter, the British-born mining company executive turned scenario planner. In a radio interview earlier this week Sunter noted that it was ironic that “[the WEF] hosts the real beneficiaries of capitalism” who were the very people who had apparently “lost the plot”. Capitalists such as this had given rise to the concept of 1 per cent of humanity dominating and exploiting the other 99 per cent. He would like to see “an economic Codesa” to sort out such matters.
Another, earlier, would-be reformer of the crisis-prone capitalist system, the economist John Maynard Keynes, once made the same point much more bluntly. He referred to the “extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of us all”. Like Sunter, he was referring to what he saw as a nasty and immoral turn that capitalism had taken.
Both men — and others who share this view — argue that capitalism has a tendency toward equilibrium. Most trade unionists would beg to differ. They argue that the system is beset by contradictions, that it is inherently nasty and immoral; that it is only the constant battle by organised labour that ensures a modicum of morality and decency. In other words, that trade unions are an essential counterweight in a system prone to brutal and destructive behaviour.
Although it is not often acknowledged within the labour movement, what this implies is an acceptance that trade unions are a creation of, and reaction to, capitalism; an essential part of the system, not an opposition to it. As such, the overwhelming bulk of trade union leaders around the world have much more in common with the Keynes and Sunters than they might care to admit.
Both camps profess to want a world of peace and prosperity for all. Among trade unionists, such an outcome is often labelled socialist; for Sunter and others like him it is capitalist, albeit in a more moral and egalitarian form.
The difference comes down, fundamentally, to attitudes toward state involvement. Cosatu — and most of the labour movement internationally — prioritises greater state control and regulation as the way forward while the capitalist camp, liberal or otherwise, makes more and varied private enterprise the priority, with less state involvement.
But state involvement is today very much on the cards following the various bank bailouts and calls for greater regulation of financial markets; it is no longer the anathema it once was to the capitalist camp. This also means is that the shared tendency to equate any state control with socialism, and socialism, invariably with Karl Marx, is coming into question. Not before time since neither Marx, nor his collaborator, Frederick Engels, made this comparison. Quite the contrary, in fact.
Back in 1878, Engels wrote that nationalisation — state control — did not equal socialism; that it was not the ownership and control of an enterprise that defined it, but the underlying dynamic by which it operated. Any enterprise, based on competition and the need to accumulate profits in order better to compete, was capitalist, whether it was owned by an individual, a company or the state.
Even in Davos, this penny seems finally to have dropped, with the WEF concept of stakeholder capitalism now apparently extending not only accepting, but encouraging, a degree of state involvement in the business of business. This, under the label of state capitalism, obviously with corporate capital still in ultimate control.
As South African diplomat Abdul Minty noted at Davos, this seems to be another case of the poor being asked to pay for a crisis created by the rich. And it would be the rich who would once again be the beneficiaries when the crisis had passed.
To some commentators on the radical margins, this acceptance of the state as a stakeholder partner is yet another indication that the capitalist system is in its death throes. But, as the social theorist David Harvey stated recently, Marxists have correctly predicted 12 of the last three crises of the system. In other words, they rightly noted the inherent contradictions in the system, but failed to understand quite how resilient it could be.
However, there is now greater realisation that such resilience comes at horrendous cost to the bulk of humanity. And several debates outside of the WEF are raising the question of real alternatives to a system based on competition and accumulation.
Ultimately, these may be much more meaningful than anything that emerges this week from the tycoons and their accolytes in Davos.