The transformative farce of Davos

Posted on January 31, 2014


Vague ideas of transformation are all the rage these days. Take the latest bunfight in Davos, for example. The annual gathering of the grandly named World Economic Forum (WEF) that ended last weekend met under the heading: “The Reshaping of the World: Consequences for Society, Politics and Business.”

But apart from the time-honoured genuflections to a better, stable, more peaceful world order, there was no indication that any WEF members had any intention of transforming anything. Instead, the platitudes flowed, as they always do when the world’s richest business club hosts politicians, opinion makers, trade unionists and a clutch of celebrities keen to burnish the hearts on their sleeves.

However, there was this year a slightly greater note of urgency in the concerns expressed about global inequality and the vast armies of the mainly young unemployed. And WEF founder Klaus Schwab also listed as his greatest current concern the “lack of trust in global leaders”.

These leaders are, of course, the politicians who have introduced — often at the behest of WEF members — austerity measures and other policies that have impacted negatively on working people almost everywhere. So it seems perfectly understandable that increasing numbers of working people are losing whatever confidence they had in those who would govern them.

Transformation — “reshaping” — is clearly called for, yet the pressure from big business at Davos was for much more of the same. According to a survey of 1 344 business executives, the concern of these bosses is with what they claim is “over-regulation” of the business environment (for which read: laws that protect workers).

In this survey, released at Davos, they also listed a serious worry with the level of social spending. The call here is for more cutbacks in pensions and other social grants along with the right to hire and fire at will. In other words, a return to the barbaric “masters and servants” employment practices of apartheid or the conditions that applied almost everywhere in the 19th and early 20th Centuries.

And the global elite certainly lived it up in the style of the plutocrats of old; no austerity for them. Take the opulent Bellevedere Hotel in Davos, for example. It hosted 320 parties over the five-day WEF bash and, according to the BBC, ordered in 1,594 bottles of champagne and Italian Prosecco bubbly, as well as 3,088 bottles of red and white wine. As the Washington Post noted: “Evenings are your usual party scene, devoted to celebrity-spotting, night skiing and….a fair amount of alcohol consumption.”

There was good reason to celebrate for the 80 billionaires and the legion of multi-millionaires attending: their combined wealth, in almost every case, swelled enormously over the past year. Of course, statistics should always be treated with caution, especially when, in the case of the personal wealth of the fabulously rich, they are usually minimum estimates, based on share ownership.

However, on the basis of the value of holdings on various stock exchanges, it is probably accurate to state, as news agencies did, that the wealth of the 300 richest people increased by $524 billion over the past year. And as an Oxfam estimate has it, the richest 85 individuals in the world today posses more wealth than the 3.5 billion people who make up half the world’s population.

This situation, the Davos grandees concurred, makes for instability. So there was some hand-wringing about unemployment and the wage and welfare gap, with trade union attendees, once again, to the fore. For the labour movement it was very much a repeat of the 2008 meeting in Davos, a time of the bailouts of banks and the finally admitted onset of the global economic crisis that had been brewing for more than a decade.

It was then that the International Trade Union Confederation (ITUC) issued an official statement bewailing the the fact that the losers in the global marketplace were “the workers…and not the bailed-out bankers and financiers who triggered the crisis”. According to ITUC general secretary Sharan Burrow: “A massive rip-off of wealth is taking place, with a tiny cohort of the world’s richest people creaming off vast amounts of money while incomes for the great bulk of the worlds’ population are stagnating or falling.”

As this column noted at the time, and which the ITUC statement avoided, was that the very bankers, financiers and companies blamed for creating the current economic crisis, were among the WEF hosts. Six years down the line, little had changed.

Representatives from banks whose speculative and often fraudulent dealings played a large part in the 2007/8 crash were again prominent in Davos. HSBC, heavily fined for fiddling lending rates and laundering drug money was there, along with Barclays, Goldman Sachs and the scandal rocked Citigroup.

Even the language from the labour movement had a familiar ring. In 2008 Sharan Burrow referred to policies leading to mass unemployment as “the gorilla in the living room of globalisation”. This year, Guy Rider, former ITUC general secretary and now director general of the International Labour Organisation, noted: “The jobs issue is the gorilla in the Davos living room.”

He added: “You can’t ignore it, and as much as one may be tempted to tip-toe around it, we need to tackle it head on. Or it just won’t go away.”

But the only solution as to how to tackle it seemed to amount — yet again — to a plea directed at very people generally held by the labour movement to be responsible for the economic mess we’re in. As British economist John Maynard Keynes is reputed to have said, this amounts to the “extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of us all”.