The World Economic Forum’s 50th Davos gathering is over. It’s the annual event that critics love to hate. Is it merely a forum for the rich and powerful to feel as if they’re making a difference? Does the conference actually do any good? Is it the spiritual HQ of globalisation? In this post I explore what it gets right, and what it almost certainly gets wrong.
Davos – an annual talking shop
In case you didn’t know, Davos is the annual talking shop for bigwigs, tycoons, politicians and celebrities. Here they attend seminars to learn about critical topics such as ‘responsive leadership’. Or ‘defending global cooperation’. Or they may swoop in on their private helicopters to lecture on income inequality.
These plutocrats in the Alps seem to think that the solution to any problem is to give more power to the EU, the IMF, the UN, or a multinational company. The nation state is a relic of the past. It stands in the way of enlightened global reforms.
Delegates also make predictions which are spectacularly wrong. For example, in 2016 the small band of unelected bankers, EU officials, NGO leaders and corporation bosses decided that:
- Trump wouldn’t win the nomination, let alone the presidency
- that the British would bottle out of voting for Brexit, and
- that globalisation was good.
Davos, Brexit and Trump
Events such as Brexit and Trump show that people have decided to reject the core Davos beliefs, its basic message and its values. The Davos attendees believe in a certain approach. This approach states that there is one answer if you want optimal outcomes in a complex and messy world. The answer is that you need to sophisticated analysis. Then use the results to decide on a myriad of trade-offs. It’s now clear that this doesn’t wash with voters anymore. Voters have had enough of complexity, they want the opposite. They will no longer accept justifications for a squeeze on real incomes. Or convoluted tax systems which benefit high earners and big business. Or how bewildering vehicle emission directives create systems designed to flout them.
The event epitomize everything the Brexit and Trump revolts were railing against. Complexity is a mechanism used by the powerful to swindle ordinary working people. This is why Trump managed to do the impossible and get elected. He gave people straight answers, even if some of these didn’t always reflect reality. People grasped the reassuring promise that they would be able to take back control. And part of this promise would be to make America great again. The message was so clear and so unambiguous that people were happy to stand behind it.
The future of Davos
The only hope I have for the event is that attendees learn from their mistakes. In some respects the signs are good. The news from Davos 2020 is that the attendees rebranded workers as stakeholders. They now officially matter to your bosses as much as the shareholders on whose returns their bonuses are calculated.
Business leaders have been discussing how to make work more inclusive. How to soothe politicians’ concerns about the gig economy and upskill workers to cope with future career impacts like AI. This approach has an upfront cost, but it confers big long-term benefits. Debates about inclusion and social mobility at events like Davos can feel abstract. Yet studies show few things build consumers’ trust in business like treating employees decently. Paying them a living wage and actually listening to them would be a good start.
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