World leaders pledge a ‘great reset’ after the pandemic
But, through its digital platform, the forum’s organizers nevertheless set out an agenda that’s arguably more ambitious than before. Klaus Schwab, WEF’s founder and executive chairman, invoked the need to help provoke a “great reset” around the world in the wake of the pandemic. “The covid-19 crisis has shown us that our old systems are not fit anymore for the 21st century,” he said in a podcast ahead of events this week.
What does that reset look like? Schwab and his colleagues are pushing the concept of “stakeholder” capitalism — an approach to business and economic policymaking that looks beyond the interests of shareholders and toward the well-being of society (and fleshed out now in a new book by Schwab and his colleague Peter Vanham). For many years, WEF has embraced this sort of socially conscious language, urging corporate leaders to be more politically minded and governments to better collaborate with the private sector on a swath of development projects and social programs. WEF points to a growing catalogue of positive initiatives taken by governments and commitments made by major corporations thanks to the convening power of Davos.
But at this year’s conference, the toll of the pandemic has hammered home a new urgency. At least 225 million jobs disappeared worldwide over the past year — losses that were four times larger than what was exacted by the global financial crisis more than a decade ago — according to a report published Monday by the International Labor Organization. Oxfam, the anti-poverty nonprofit, separately found that while the world’s 1,000 richest people recouped their losses during the pandemic in a matter of months, it could take more than a decade for the world’s poorest to recover from its economic impact.
Faced with these grim conclusions, world leaders, at least rhetorically, rose to the occasion. French President Emmanuel Macron declared Tuesday that “we will get out of this pandemic only with an economy that thinks more about fighting inequalities.” He argued that the financialization of the economy had led to a focus on “profits that are not linked to innovation or work” and that liberal democracies needed to move beyond a now-outdated reverence for deregulation and hostility toward state intervention.
“The capitalist model together with this open economy can no longer work in this environment,” said Macron.
Kristalina Georgieva, managing director of the International Monetary Fund — a global institution once synonymous with neoliberalism — said that “unless capitalism globally brings people closer together, we won’t be winners after this crisis.” She added that the pandemic had widened the gap between wealthy and poorer nations and that global cooperation on addressing a crisis that knew no borders was “not up to par.”
Those sentiments were echoed by German Chancellor Angela Merkel, who once more used her bully pulpit at Davos to decry nationalism and called attention to the new challenges posed by unequal vaccine distribution around the world. “Let’s not kid ourselves: The question of who gets which vaccine in the world will of course leave new wounds and new memories, because those who get such emergency help will remember that,” she said.
Of course, reasons for skepticism abound over the utility of such gatherings. In the United States, the controversy over the GameSpot stock — where ordinary retail investors organized online to dramatically upend the schemes of a clutch of hedge funds — is a reminder of the deep populist contempt among many Americans for the sort of institutional investors who populate Davos each year. Meanwhile, some on the far right have cast Schwab and the forum’s efforts as part of a broader globalist conspiracy.
“The right sees the WEF arguments about restructuring the global economy as a dangerous attempt to impose ‘socialism’ and dismantle the traditional society, or what remains of it,” summarized the Indian geostrategist C. Raja Mohan. “The left scoffs at the Davos Man’s talk on the crisis of capitalism. It points to the complicity of the Davos forum in promoting policies that have brought the world to the current impasse and question its capacity to produce solutions.”
Today’s WorldView moderated a virtual session of Davos attendees eager to bring the world out of this impasse. Gabriela Bucher, Oxfam’s executive director, said that the yawning inequities revealed by her organization ought to make us “think of taxing differently.” She pointed to a new one-off wealth tax passed in Argentina that will raise funds for the country’s pandemic recovery efforts.
“This should be now the norm,” said Bucher. “We can’t think of small adjustments. We need to fund a fair and just recovery that is redistributing at the same time as it enables all the participants of the economy to remain active.”
Sadiq Khan, the mayor of London, spoke of how his city’s experience of the virus revealed gaps along socioeconomic, racial and gender lines, with Black Londoners statistically more vulnerable than others and mothers more likely to have lost their jobs than fathers. “Not only has this pandemic exposed those structural inequalities, but it’s exacerbated them,” said Khan.
Darren Walker, president of the Ford Foundation, argued that “if capitalism is to be sustained, we must intentionally put the nail in the coffin” of the neoliberal orthodoxy championed by the late American economist Milton Friedman, which, Walker said, has left the “ideological scaffolding” for policies and worldviews that are deepening inequality.
That world that existed before the pandemic “is over,” said Walker, and that “means that many of the norms and understandings and structures of that world in a post-coronavirus world must be reorganized and dismantled.”