The emptiness of Davos

Curtis Doebbler, Saturday 4 Feb 2012

Again this year, the World Economic Forum builds an unbreachable wall between itself and its failed ideas and the rest of the world

Last week a select group of about two and half thousand of the world’s richest elites and a few of their groupies met in Davos at the annual meeting of the World Economic Forum (WEF) to discuss the global economic crisis. They were invited to the exclusive ski resort village high in the Swiss Alps by Swiss economist Klaus Schwab.

To get to the hotel rooms for which they were paying as much as 10 times the normal prices, they had to navigate numerous police or military checkpoints. Security was so tight that some attendees reported being kept out of their own hotels, given intentionally wrong directions by the police, and being barred from trains.

Whether one did the five hour trek over the surrounding mountains from the village of Klosters about a half kilometre below or took a helicopter from Zurich, you had better look like you were worth at least a million francs or you ran the risk of a rude welcome at the security cordon of police, military and private security companies. Activists intending to disrupt the meeting by drawing the invitees’ attention to the global damage they are doing were often stopped.

Well-insulated from the 99.99 per cent of the people for whom they have caused economic turmoil, the select representatives of the world’s economic elites were supposed to come up with good economic ideas. Nothing seemed more distant.

Business as usual?

When he started holding these annual meetings more than four decades ago, Schwab invited his rich friends and acquaintances to discuss strategies for keeping their wealth. This was attractive to them and to him. It was also attractive to the Swiss, and today especially the people living around Davos, who earn handsomely from visitors willing to pay greatly inflated prices for hotels, transportation and meals.

Little has changed over four decades of annual meetings. The Swiss economy still appears to be the main beneficiary of the WEF and invitees are still focused on ensuring their wealth over any of the altruistic concerns in which the Geneva-based organisers of the WEF try to interest them.

It is true that the good old days of soaring profits, low unemployment, and bubbling stock prices have disappeared, but even this doesn’t seem to bother the Davos crowd. Only a few people are beginning to realise that the annual meeting might be part of the problem rather than the solution, and even they act in muted tones.

The Brazilian president, for example, snubbed Davos in favour of the World Social Forum; a meeting that does offer some alternative thinking. Nevertheless, the Brazilians had a huge contingent on hand at Davos. Moreover, the message of dissatisfaction with business as usual that Brazil and the handful of developing countries tried to convey did not appear to have found a broad audience in Davos.

Indeed, just sitting in a restaurant or cafe on Davos’s promenade it was obvious that the people coming to Davos are not trying to solve the problems facing most of the world today, but are merely trying to save their own necks. Most of them shun WEF orchestrated events for their own private business meetings. And if they are prominent enough to be invited speakers, they use the occasion to promote themselves in the image of capitalism and rarely speak critically about the financial and economic system that is causing problems for most people today.

My conversation with Michael Liebreich, chief executive of Bloomberg’s New Energy Finance Unit, was indicative of the mood. We spoke at the place in Davos most likely to inspire one who is part of the elite apparatus into altruistic thinking: the “igloo campsite” of the handful of ordinary working people demonstrating against the WEF and the system of unbridled capitalism for which it stands.

True to the economic creed that got him invited to the WEF, Mr Liebriech thinks that the global problem of climate change can be solved by private action based on self-interest. He sees a global agreement, like the one that almost every country in the world has been striving to achieve for the last 20 years, as a distraction. His commitment to the capitalist creed is unshaking.

Mr Liebreich, whose company collects information for expanding the green economy investments of elites from traditionally rich and powerful countries, is adamant that consensually agreed rules just don’t work. Private enterprise, he enthusiastically argues, must be left to their profit-driven devices and they will do the job. He even argues that they are doing the job, claiming to have collected the facts to prove this. The reality indicates otherwise.

Since the adoption of the UN Framework Convention on Climate Change (UNFCCC) in 1992 at the Rio Conference on Sustainable Development, several global funds have existed to invest in climate change together with dozens of programmes to encourage investment. They have all suffered, often fatally, from the same problem: lack of investment. More importantly, the action that the UNFCCC says is vital if we are to save the planet’s atmosphere is not happening through private or public means.

Mr Liebreich also insists that the adverse effects of climate change can best be addressed by “desegregating the problem.” To address climate change, for example, he argues that we need to focus on private investment in the green economy.” His thinking is echoed by a good number of the other invited guests at the WEF.

WEF Secretariat representatives have argue that we should not focus on the many problems that ordinary people face today, but rather on what we each can do ourselves to solve a problem in which we are involved. Such arguments have an enticing moral allure. They even appear to be common sense advice, but the consequences of following this advice could be deadly for far too many people.

If we focus only on one aspect of the multitude of problems facing humankind, as Mr Liebreich and friends argue we should, is it not too easy to forget that solving one problem might leave other deadly problems unsolved? For example, if we focus on the green economy without ensuring the equitable distribution of development, the rich may well stay rich, and the poor, poor. One gets an uneasy feeling that this is exactly what such advocates want.

It is not coincidental that as the world plans the anniversary of the Rio Conference on sustainable development in June in Rio de Janeiro where it took place 20 years ago, these same tensions — between economic concerns on the one hand, and equitably shared sustainable development on the other — have tainted negotiations of the Outcome Document.

The Rio+20 Outcome Document is one of the primary expressions of policy intended to take the global development agenda forward, especially after we fail to meet the Millennium Development Goals by their 2015 deadline. In the Rio+20 talks, traditionally rich and powerful countries want to focus on the green economy. By this they mean their own businesses and the other profitable means in which they hold a significant competitive advantage over developing countries. Most of those participating in the WEF meeting seemed to harbour similar hopes.

Developing states, on the other hand, including many that are emerging as the leaders of a new global economic order, have argued that you cannot disaggregate the concerns of human beings, which they say are interlinked, integrated and interdependent. As such these concerns require a comprehensive approach. They sometimes point to the example of a person who is homeless, hungry and lacks education and healthcare. Providing such a person food or healthcare will not really help the person, as his or her life is likely to remain precariously threatened as long as the person remains homeless and without education.

An even larger related issue is historical responsibility. By ignoring the historical responsibility of the people who created the current problems, even those donors who want to help achieve a solution often arrive at solutions that help them more than the victims.

Development assistance is one of the most documented examples. Understood as a discretionary hand out to people who have been exploited for centuries, it often ends up merely being a light type of welfare to the domestic economy of the donor state. Viewed as an obligation based on past wrongs the transfer of wealth from the traditional rich and powerful to those they have exploited takes on a different dimension, one of equity and justice.

The principles of equity and justice are not new. They are embedded in international society, in human right treaties, in trade treaties, in environmental treaties, and in climate change treaties, among others. This is a point the UN General Assembly will undoubtedly stress during its high level session at the opening of the 67th General Assembly in September with the theme of the importance of the rule of international law.

As principles of international law, equity and justice are both guides and restrictions on the actions of states. They also offer ordinary people rights that states must ensure. Most people in Davos don’t like this idea. They would prefer a world in which the rich and powerful can act as they like. Some actually believe that this is best for everyone. Again history seems to have proven otherwise.

Who decides the message?

The WEF is famous for its exclusivity, both to its invited participants and to those who oppose it.

The most numerous of the Davos elites are Americans. They are notorious for their scepticism about international law and any international agreements that establish common values. Even when the United States agrees to international legal obligations by becoming party to treaties, its citizens often do their utmost to avoid their agreed to obligations and their government often does little to stop them.

At the same time, the Americans are the most enthusiastic about unbridled capitalism. Their enthusiasm runs so deep that it is not only mega investors like Bill Gates or George Soros who attend, but even professors of theatre practice, professors of history, and the heads of leading American human rights organisations. While they have different views on how to deal with today’s economic malaise, they all share the same common faith in capitalism.

Little effort has been made to include alternative voices. The WEF’s brand new electronic participation system is moderated by committed pro-capitalist employees. There is a public forum of about a half dozen meetings that the first 250 people to make it past security and to queue for about an hour in sub-zero temperatures can attend. The public forum, however, is predominately a chance to listen to elites talk about their ideas. It is not a place for difficult questions and certainly not the place for the type of interrogation that one might expect people responsible for a global financial and economic crisis to be subjected to.

Mr Schwab himself is careful to avoid too much scrutiny. After declaring 2011 to be a crucial year for change in the way the world does business, Schwab was more humble this year having made this less than accurate prediction. Nevertheless, he seems not have learned much from his mistake as he invited back most of same people from last year and denied invitations to many alternative thinkers.

Curiously when asked from where solutions would come, Schwab criticised the protesters — who are arguing for an alternative to capitalism — for not having answers. Had he taken the time to visit the protesters he would have heard not only answers, but also concrete initiatives.

Among the protesters were the Swiss activists behind the growing movement to limit executives’ pay. These activists have forced a vote on the issue later this year.

Among the activists was also Mr Kumi Naidoo, executive director of Greenpeace International, who was invited to the WEF meetings as a lone voice for change.

Speaking at an action at which activists briefly blocked one of the main roads in Davos with huge snowballs, in order to draw attention to their views, Naidoo said that the Davos invitees “listen to what is being said, they even applaud and engage in conversations, but they just don’t internalise the ideas.”

Another of the activists added that the economic elites “can’t seem to understand that it is people, not profits, that count.”

Nearby other activists engaged in conversations about financial transaction taxes, airline fuel taxes, carbon taxes (to be paid by the highest emitters of carbon dioxide), social justice being achieved through a more equitable distribution of wealth, and other alternatives to a world economic order based mainly on economic growth.

These conversations took place outside the Davos conference centre where Mr Schwab and his colleagues were considering ideas very similar to those they have proposed for the last 42 years.

The writer is professor of law at Webster University in Geneva, Switzerland.

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