The World Economic Forum’s annual meeting in Davos, Switzerland opens January 16, and that body’s anti-capitalist maunderings will once again be spread all over the media. However, the WEF’s Marxist/Thunbergist “Great Reset” approach is not simply due to its chief Klaus Schwab having the looks and outlook of Ernst Stavro Blofeld; it is structural. The WEF’s shareholders, funding and constitution generate incentives that lead it away from free-market capitalism towards collectivism, evil, and human despair. I shall explain why.
The WEF was founded by Schwab in 1971 and is funded by its 1,000 member companies, which typically have turnover of $5 billion or more, as well as by public subsidies. It therefore represents the interests of its funders, both governments and the largest companies. From the point of view of capitalism and the health of the global economy, this is a major problem.
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest” wrote Adam Smith in the Wealth of Nations. Thus, in Smith’s formulation, through free competition between small producers, each acting in their own interest, we can expect through the “invisible hand” of free market competition mankind’s wealth to be increased.
However, in another Smith quote: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” The same is even more true of the CEOs of gigantic businesses, of all different trades, meeting in a Swiss ski resort hosted by an NGO that positively encourages them to conspire against the public. “Merriment and diversion” may be scarce, but “woke” posturing will be all-pervasive. Smith knew few of our modern multinationals, but the East India Company of his time had many of their features; he described it as “a thorough nuisance in every respect.” As for government, Smith was an early exponent of James Buchanan’s public choice theory, that government bureaucrats, like everybody else, have their own selfish interests and tend to act in those interests rather than with any abstract objective of the “public good.”
Analyze Smith’s writings as a whole, and the economic tendency of the World Economic Forum becomes clear. Whereas even multinationals competing with each other may produce an economically optimal outcome for society, when they are able to collude together through the World Economic Forum, they naturally form “a conspiracy against the public” – they cannot help themselves.
Add governments to the mix, and the immense lobbying power that large businesses, collected together as a group in the WEF, can have on government, and the conspiracy against the public becomes exponentially more insidious. With the help of the WEF’s experts, the multinationals can construct elaborate schemes of multinational regulation that enrich themselves and increase the power of governments. All participants in the Davos forums are thereby gratified. The losers are the public as a whole and more particularly those businesses too small to be invited to Davos.
From the point of view of small businesses and the general public, the WEF, as it has accrued power to itself over the 52 years of its existence, might as well be run by Ernst Stavro Blofeld. It is, like the global machinations of Blofeld, a nefarious scheme to extract wealth from the world. It does not even need to threaten to blow up the world; its membership, power and incentive structures extract the wealth automatically, with the more foolish of the media such as the Financial Times acting as its cheerleaders.
An international plague, whether or not deliberately created in Chinese laboratories, thus became an opportunity for a “Great Reset” whereby the rest of us will “own nothing and be happy” living on bugs. Meanwhile Blofeld and his members will wallow in unimaginable wealth, consuming the world’s last remaining supplies of steak and lobster farmed in secret Swiss mountain valleys – laboratory food is for the rest of us.
The dynamic, of large companies and the government working together to create policies and practices that entrench the companies and enlarge the power of the government, is visible in other entities beyond the WEF. Indeed, it is intrinsic to all international agencies, whose principal identifying factor is a lack of control either by ordinary people or even by governments democratically elected by ordinary people. These agencies specialize in policies and regulations that tend to reduce global freedom and output; it is their mission – a truly free world is one in which the they have no influence.
The World Bank and the IMF were set up by Maynard Keynes and Harry Dexter White at the Bretton Woods Conference of 1944, in an era when governments were all-powerful and businesses of any kind had very little influence – it is notable for example that Keynes made no attempt to get the necessary funding for Britain’s postwar existence from the private sector New York banks, who would have been happy to supply it, but relied solely on a government to government agreement with the Franklin Roosevelt administration. That agreement naturally included conditions, notably the abolition of Imperial Preference, that prevented Britain from showing too much economic or political independence.
In the post-Bretton Woods world, large companies have greatly increased their power, recovering quickly from their temporary eclipse of 1944 and then enlarging their influence far beyond that of the “robber baron” trusts of 1900. Initially, this was a matter of technology; the 1950s global economy, dominated by the United States, involved enormous economies of scale that benefited organizations with several hundred thousand manufacturing employees – what was good for General Motors really was good for America and indeed the world.
Then, with the advent of the minicomputer, the PC and the Internet, it became possible to construct an economy where smaller companies could easily compete, technology providing them with global linkages and making up for their lack of employee manpower and mass middle management. In the 1990s, it truly appeared as if globalization and modern telecommunications would be a force for freedom, allowing small groups worldwide to build their fortunes in a world where Adam Smith’s Invisible Hand took the form of a worldwide network of potential suppliers and customers.
Alas, further technological advances have reduced the potential for human freedoms and increased that for central control. With ubiquitous smartphones and modern surveillance and recognition technologies, Big Brother truly has the capability to know exactly where you are and what you are doing, and corporate behemoths once more have economies of scale in information that can allow them a dominance that Andrew Carnegie or “Engine Charlie” Wilson could not have dreamed of.
The new technology has also given new capabilities to governments, to control their citizens and reprimand them for disapproved behavior, even to the extent of removing their livelihoods. Regulations, backed by belief systems surrounding “health and safety,” “climate change” and “diversity, equity and inclusion” are mere mechanisms by which the populace can be sorted and discipline enforced. Even new artificial intelligence tools such as ChatGPT, that initially appeared to offer fresh creative opportunities for the less articulate, have been subverted by tech wokies so that (as shown by Nate Hochman of National Review) they produce only a distorted woke version of reality, refusing to create anti-woke text on politically sensitive topics.
In such a world, the WEF, with its complete lack of democratic control, its disdain for small independent businesses and its fertility in devising new modes of oppression, is a power tool by which our freedoms can be removed and our living standards destroyed. Democratic movements within countries can help to quash it, but its Kryptonite would be shareholder resolutions at its member companies forbidding management from taking part in its Davos conferences, providing funding for it, or supporting it in any way. Only by such a bi-level condemnation can it be extirpated. Its extirpation, and the removal of Davos from the global CEO calendars, is essential for all our futures.
(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)