This year’s edition of the annual summit of the World Economic Forum (WEF), complete with its cornucopia of wealth and glamour, wound up in Davos in the Swiss Alps. May is not the month for the world’s business and political power elite to rub shoulders at Davos. January of every year is when the high-powered rendezvous takes place but the first in-person version after two years, due to the pandemic and related restrictions, was rescheduled given the concerns over the Omicron variant earlier this year. It’s time to ask, especially in India, if the Davos summit needs to happen at all.
Does the world improve in substantive ways because men in bespoke suits and private jets – yes, Davos is still dominated by such men – discuss, among other things, inequality in the world by the day and fashionably roll their champagne flutes at night soirees, or fly in to resorts in private jets for a day and lament about climate change thereafter? Far from it. In fact, the juggernaut of globalisation which is cheered on every year by the faithful at Davos, has led the world into a darkening place of stark inequality, climate crisis, conflict, and ultra-nationalism. To expect that globalisation will proceed on its path in the face of rising poverty and instability across the world calls for an unshakeable belief in capitalist-led global adventure or an obliviousness that comes from living in cocooned ivory towers. The Davos set displayed both this year.
It has now become part of the Davos tradition for inequality protestors and other activists to line the streets of the picturesque town to point out that the power elite inside the venue represent only the (in)famous one per cent of the world. A poster held by a young woman this year simply said “We are the 99 per cent”. It has also become part of the convention for Oxfam International to release its annual inequality report during the Davos summit. This year’s report stated that the pandemic had created a new billionaire every 30 hours while a million people could fall into extreme poverty around the world every 33 hours. “As the cost of essential goods rises faster than it has in decades, billionaires in the food and energy sectors are increasing their fortunes by $1 billion every two days,” it pointed out.
Both the posters and the report made a telling comment on how the Davos summit, after 50 plus years, remains an out-of-touch party of the wealthy and the powerful, never mind the customary allowance it makes for environmentalists and protestors as they did for inequality this year. Inequality was of concern not because it was socially unsustainable and ethically wrong, but because it threatens global economics. In fact, historian Samuel P. Huntington had coined the term “Davos Men” in 2004 to mean transnational elites who, “empowered by new notions of global connectedness,” ensure that they were seen at the WEF every year.
Davos is a celebration of a variant of capitalism – best known as stakeholder capitalism, a term shaped by engineer-economist founder of the WEF Prof Klaus Schwab – and “an escape from the everyday” as the Forum describes the rendezvous. The summit, then, is hardly likely to take meaningful steps to reduce the outcomes of aggressive capital-led globalisation of the world: inequality, instability, climate crisis. To expect the Davos men to do so would be foolish and unrealistic. As most entities are filled with an inordinate sense of self-importance, they refuse to look within and address the less desirable – and more pernicious – outcomes that their economics is responsible for. This remains the greatest failing of the Davos set.
This year’s summit focused on the theme “History at a Turning Point: Government Policies and Business Strategies.” The 2,500 delegates, each with a white badge purchased at astronomical sums that signified their importance in the rarefied world, pondered over the momentous subject and lightly touched on inequality, climate crisis and the war in Ukraine, unmindful that history had indeed brought them to a turning point: Can the world’s billionaires course correct themselves in pursuit of a fairer and stable world? Taxing the rich is a way out, as the Dutch historian Rutger Bregman had suggested at Davos three years ago. His words “...It feels like I’m at a firefighter’s conference and no one’s allowed to speak about water. This is not rocket science, we have got to be talking about taxes. That’s it. Taxes, taxes, taxes,” had caused enormous discomfort in the room.
India is caught in a pincer: It wants to be hailed at Davos as the next big destination for the world’s capital but has to contend with all the problems that “stakeholder capitalism” brings. India was represented by a 100-member strong delegation this year and at least five states – including Maharashtra – showed up to sign memoranda of understanding. There were announcements on energy transition, plastic pollution, and similar issues. But after the jets have flown back home, it’s worth asking if the economic model advocated by the Davos set will help set India on the path of inclusive and fair growth. The GDP may still be a measure of an economy, as the Davos men advocate, but it cannot be the sole measure of a country’s well-being. Davos may not be dead but its relevance is in doubt.