Stakeholders at the Gate
Klaus Schwab's big words are received as either dark forebodings or white noise. Ahead of the WEF's big Davos meeting, governments had better take note.
I recently came across news of a study done by EKOS polling which showed a significant overlap between vaccine skeptics and those that profess sympathy for Russia in its invasion of Ukraine. Another oft-present correlation that can’t not be noticed amongst this cohort is antipathy to the World Economic Forum (aka the WEF, or fat cats in the snow as Bono famously called them.) The WEF, under its founder and executive chairman Klaus Schwab, is thought to be comprised of what Samuel Huntington may or may not have called “Davos Man”, the denationalized super-rich from the elite multinationals that largely provide it with funding. The Forum bills itself as “bring(ing) together decision-makers from across society to work on projects and initiatives that make a real difference.” The glittering, ostentatious result is business and political leaders, along with investors, economists, journalists and celebrities meeting yearly in the Swiss mountain resort of Davos.
Known more formally as an international non-governmental and lobbying organization based in Geneva, Switzerland, the WEF is notable for the pushback it has often received from anti-globalization activists, the 2003 riots in Bern being the most extreme example. An antagonism similar in intensity has come to dominate right-wing websites and the content being shared in their social media groups. As the Forum’s leader and “social maître d”, Klaus Schwab has been rigidly fixed to the role of stand-in for the WEF and for elite billionaires in general, increasingly since the pandemic’s inception caricatured in the viral narratives dominating the far-right as a demonic criminal mastermind on social media; Emperor Palpatine crossed with Ernst Stavro Blofeld with a generous helping of Joseph Stalin.
No great shock then to have this prince of darkness quoted as intoning: “You’ll own nothing. And you’ll be happy.” Your average rightward-leaning Facebook user has most likely scrolled by this decree quite a number of times during the past two years. Sternly attributed to Schwab but actually written by Danish politician Ida Auken for a 2016 WEF social media video imagining the world in 2030, this prediction is just one of several instances where Schwab and the WEF have ineptly played into caricatures they themselves have been helping sketch for quite a while now. “I have the feeling we are here at the funeral of shareholder capitalism and the birth of stakeholder capitalism.” This one he actually did say. Raising eyebrows, Schwab has also publicly expressed pride in having successfully penetrated Canada’s cabinet. Coming in the context of recent coalescing events and slowly creeping societal trends, statements like these can almost bring a reasonable person to alarm.
But then, as with a lot of the big subjects these days, the search for truth is obscured by a vast treasury of bullshit. Books will undoubtedly be written gingerly sorting through this sewage of half-truths and disinformation, but to extract one group of samples connected to the “happily-owning-nothing” narrative for examination, the Canadian government’s order for banks to freeze hundreds of accounts in connection with the convoy protests undoubtedly added to the paranoia over “cashless societies.” This aggravated pre-existing fears of a time when behaviour and opinions will be policed using the threat of loss of access to funds (keep this in mind for later when we discuss ESG metrics). The unveiling of the Liberals’ 2022 budget, in particular the section addressing the digitalization of money, injected yet more opportunity for hyperventilation.
Conspiracy scribes were lightning quick in weaving these new developments into the fabric of their rag (rage?) quilt narratives. Hours after the budget’s release, warnings were being shared online of a time when people could be forcefully steered away from meat consumption and gas-guzzling vehicles, among other things, under threat of bank accounts being frozen “with the click of a button” (prompting one commenter to note ominously that something else could be done with a click.) There have already been calls for less alarming examples of civil disobedience, such as dropping cash on the counter and walking out with goods where material currency is no longer accepted. Not exactly the stuff of revolution, but with the potential to cause more than irritation when we remember that this would come from the same crowd that caused servers to overload in reaction to the perception that Canadian senators were earnestly taking steps towards a guaranteed livable basic income.
The joyous penury of happily owning nothing is itself a major plot-point of a coming great reset, which is also the name of the WEF’s 50th annual conference of June 2020 and the accompanying book, Covid-19: The Great Reset, written by Schwab and Thierry Malleret. The phrase has come to have a diabolical significance for many, incorporating apprehensions of a CCP style social credit dystopia eliminated of useless eaters, with QR codes and digital IDs enforcing the aforementioned cashless society, with all sorts of nefarious implications.
There isn’t anything especially new in these overheated anxieties, but technology and social media have injected them with a previously unseen ferocity. On a recent episode of Real Time with Bill Maher, the host pointed out an increasing tendency online for people to uncritically accept simplistic memes which reinforce their beliefs, while disregarding any complicated reporting from the mainstream which doesn’t validate their feelings and worldview. No surprise then that all evil is concentrated in the person of Klaus Schwab as notorious mastermind of these difficult past few years; or that Schwab’s great reset book is now discussed by some with the same horror as Mein Kampf. Rather than doing the hard work of plodding through information and conflicting arguments in an attempt at forming their own opinion, many succumb to the ease of simply not thinking. Auto-didacticism minus critical thinking skills equals a susceptibility to confirmation bias, resulting in a fever-dream edition of a Choose Your Own Adventure book, where all choices lead further down the same rabbit hole.
The more imaginative projections of the WEF’s aims are reminiscent of what we long heard about the Bilderberg Group, the Trilateral Commission and the Council on Foreign Relations, which for decades seemed to be at the heart of every conspiracy theory, whether from Lyndon LaRouche or Alex Jones. Such narratives prove especially fertile as those at the centre of power of multiple western democracies play or have played active roles in these real supranational groups. Chrystia Freeland, who is both deputy prime minister and finance minister of Canada, is on the WEF’s board of trustees, as is the President of the European Commission, Ursula von Der Leyen (among many other notables.) This is not unlike what we saw in the late 1970s with the Trilateral Commission, with its deep footprint in the Carter administration. The persistence of these ideas was underscored when not long ago, US President Joe Biden mentioned a “new world order” to an audience of CEOs, prompting apprehension from the paranoid as well as those who remember the headway that phrase made in the 90s among anti-government extremists in the midst of the US government’s debacles at Ruby Ridge and Waco, and Timothy McVeigh’s claimed counter-attack on the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in Oklahoma City. Matters aren’t helped by world leaders seemingly parroting WEF buzzwords and catchphrases.
Stepping back now into the world of measured opinion, anyone having actually laboured through the level tedium of Covid-19: The Great Reset will have found it reads as a reasonable diagnosis of our current ills, not overly committing to any one path forward except in a very general sense promoting the view that a radical rethinking is in order. Though written less than six months after the first appearance of the virus, and presented as an urgent call to action “for global stakeholders to cooperate in simultaneously managing the direct consequences of the COVID-19 crisis,” the book in no way represents a departure for Schwab or the WEF. Naomi Klein writes:
The Great Reset is merely the latest edition of (a) gilded tradition, barely distinguishable from earlier Davos Big Ideas, from “Shaping the Post-Crisis World” (2009) to “Rethink, Redesign, Rebuild” (2010) to “The Great Transformation” (2012) and, who can forget, “Creating a Shared Future in a Fractured World” (2018). If Davos wasn’t “seeking a better form of capitalism” to solve the spiraling crises Davos itself systematically deepened, it wouldn’t be Davos.
In fact, one could go as far back as the original 1973 Davos Manifesto and find the same core idea of a new and improved capitalism focused on “stakeholders” rather than shareholders, with the former seeming to stand for all affected by the corporation doing business: basically everyone in the society. Indeed, at a 2020 Davos session with big CEOs from America and Europe, and with Klaus Schwab looking on approvingly, Salesforce.com CEO Marc Benioff even included the homeless in this category.
This consistency has increasingly paid at least nominal dividends for WEF’s rhetorical goals. In a 2019 pledge signed by nearly 200 of America’s top CEO’s, the Business Roundtable (BRT) finally compromised in the face of Schwab’s endless nagging, promising to put stakeholders on the same level as shareholders through delivering value to customers, investment in employees, fair and ethical dealings with suppliers and support to the communities they work in. Specific to workers, the major-player American CEOs of BRT pledged fair pay and needed benefits, as well as support through training and education. Predictably, there is also a promise to “foster diversity and inclusion, dignity and respect.” Always stubbornly insistent on sitting at the big boys’ table, Canada has pulled up its high-chair with its own tepid WEF-inspired offshoot called the Coalition for a Better Future, an attempt at creating buy-in from stakeholders for a program of economic growth, co-chaired by former cabinet ministers from the two major political parties. Cue the same sort of big talk but with Gerber’s apple puree dribbling down chin.
This time can be different, we’re told. The WEF writes on their website that in the wake of the pandemic, “Companies have stepped up to support their workers, customers, and local communities, in a shift toward the kind of stakeholder capitalism to which they had previously paid lip service.” We are to believe that the moment is finally ripe for real change, indeed the evidence is that it’s already happening. Environmental, social, and governance (ESG) metrics are increasingly being used by investors to help screen out bad actors in these three broad categories, with very powerful allies encouraging the trend. By withholding investment from those that score poorly on each participating entity’s chosen ESG criteria, it is claimed institutional investors like BlackRock will be able to induce better behaviour by forcing corporations to act in their own best interest. This represents in the view of some “the greatest growth opportunity the world has ever seen.” Canada’s Coalition for a Better Future has been promoting its own “scorecard” with ESG metrics scoring the performance of the country’s public and private sectors in the areas of climate change, living standards, economic fairness, and global competitiveness.
Unfortunately, but perhaps not surprisingly, there is evidence that the signatories to the BRT’s 2019 pledge are not living up to their promises. A recent analysis by academics at Harvard Law School on stakeholder capitalism in the covid-era reports that when companies are sold, it is the shareholders and higher executives who are continuing to accrue the benefits from the takeover premiums, and there is little to no evidence of a new found enthusiasm for negotiating job protections for employees or compensation for those finding themselves out of work after the sale. Additionally, a study by KKS Advisors and the Test of Corporate Purpose (TCP) found that “BRT signatories did not outperform their S&P 500 or European company counterparts” in elevating the interests of the different stakeholders during the pandemic.
We have reason to believe that the Coalition for a Better Future will be more of the same: Big vague talk which is followed through on with specific meaningful action only inasmuch as it affects the larger goal of economic growth. Any peripheral gains will be happy accidents. The Coalition insists the growth be “inclusive and sustainable.” When pressed on how their scorecard would measure whether economic gains were being shared more fairly, Coalition co-chair Lisa Raitt feebly pointed out that:
We measure to make sure that the living standards are spread equally out amongst the economy and the workers in general, so one of the measures is the average poverty gap which I think is a really good way of figuring out, as you grow the economy, how is that being impacted. And then the one that I like, as well, is the income parity across genders, races and people with disabilities. And I think that speaks to the whole inclusion piece and to be measured against that is extremely important, because it gives the ability of business and of not-for-profits and government to stop and say, wait a second, ok, we may be growing because we’ve got better investment in R&D for private corporations but it’s not being spread appropriately. So what’s the policy fix and how do we figure this piece out?
It remains unclear from Raitt’s word-salad how their scorecard and its metrics would positively affect those working in the real world, such as the new Canadian working 40 hours a week as an ESL teacher for a small private school but only getting paid for 25 of them; the immigrant working 60 hours a week washing dishes under the table for below minimum wage; or the young Canadians just entering the workforce, staring in shock at their pay-check, wondering how exactly the bills are going to get paid, never mind saving for a home. To answer these doubts, co-chair Anne McClellan dutifully brandishes a few of Klaus Schwab’s favourite buzzwords:
Talent. Talent. This government cares a lot about talent. Upskilling. Reskilling. Immigration. Getting talented people into this country. That will drive productivity.
And through improved productivity the economy will expand robustly, and the gains will trickle down, and… ah yes, I thought all of this was leading somewhere familiar. It seems McClellan needs work on her message discipline as she’s basically given the game away. Yet so many questions are raised. The immigrants already here, those helping prop up our economy these past two years, aren’t talented? People are going to have to “upskill”? What is everyone supposed to “upskill” in? Who will be paying for all this “upskilling”?
“I think in many ways this is going to be a decade of trust,” Ginni Rometty, former CEO of IBM, solemnly declared to an audience at Davos in 2020. Even before the mounting evidence of the emptiness of promises made thus far, the WEF and the billionaire class that populate it were going to find this trust difficult to come by. Like politicians seeking reelection, Klaus Schwab and the Davos set’s quandary is that while they admit everything, they ask us to believe again. Unfortunately for ‘Davos Man’ it may be too little too late. The marks have wizened up, and they are not in a trusting mood. Most anyone who’s worked for a living will recognize the old tactic of hazy promises always just about to be fulfilled, if we can only wait just a little bit longer. Wait for what, exactly? Management is usually rushing out of the room by that point, surely in haste to clear the way. Might as well recommend saving roadside plastic bottles filled with yellow-orange liquid for future consumption as try to convince average citizens that all this endless talk doesn’t represent just another public relations angle for large firms like Amazon, Citigroup, and especially believe it won’t be affecting the wider economy.
In sum, the Forum and those associated with it now find themselves persona non grata on the right, viewed as little more than a Potemkin forum on the left, and with indifference and/or ignorance with a lot of the rest. In any case, addressing even tenuous ties to the WEF has proven a dangerous tightrope for politicians of all stripes, but those forcing the issue aren’t exactly having an easy time of it. When Conservative MP Colin Carrie asked in the Canadian House of Commons about Schwab’s claim of having influence over more than half of Canada’s cabinet, he was cut off with accusations of “openly promoting disinformation.” While the question was directed at the governing party, suspicion is unlikely to fall solely on the Liberals: Former Conservative leader Andrew Scheer was a Young Global Leader for the WEF (despite denials), as was New Democratic Party leader Jagmeet Singh, while Conservative leadership frontrunner Pierre Poilievre is having to fend off questions about previous ties.
But Deputy PM and Finance Minister Chrystia Freeland’s situation should occupy a category of its own. While also a former WEF Young Global Leader, Freeland currently serves on the Forum’s board of trustees, which the WEF describes as its “highest governing body… responsible for its strategy and advancing its values.” Looked at objectively, it seems curious the lack of attention this potential conflict of interest has received in the mainstream media (with very few exceptions). Not wanting Canada’s deputy prime minister and finance minister to serve concomitantly on the board of trustees of the WEF is not a looney position, despite whatever other crack-pot views the person holding it may have. It is especially tenable to ask for an explanation of this arrangement’s necessity, and yet the government has seemed loathe to discuss it, confident of its ability to brush it off as so much conspiratorial nonsense and slow-walk the processing of requests for documents.
That could be a winning strategy but on the other hand, with the rising inflation (and anger) and general gloomy outlook for the economy (and nearly everything else), I wouldn’t be so sure. Trudeau and the Liberal government seem to live or die by their communications, and through their secrecy and strategy have only encouraged the conspiracy talk. And this obfuscation despite coherent explanations for links with the WEF being more than possible. It all becomes an especially big problem when the government then considers itself free to dismiss anything associated thematically with the “conspiracy theory”, as it trivializes legitimate questions that deserve serious attention.
As hordes of elites prepare after a year’s delay to once again descend upon Davos, we can be sure of an online uptick in conspiracy theories and cynical eye-rolling, but also more generally of anger. While most people don’t have a clue what the WEF is, there is a pervading sense in our societies that something has gone wrong with modern capitalism and that the social contract is in need of a revision. How leaders in the private and public spheres deal with this anger is going to go a long way in determining how the foreseeable future plays out. On the other hand, how this anger vents itself, as well as its overall intensity, will greatly effect how far leaders push to benefit those less well off. Up to now, and despite all of Klaus Schwab’s big talk about “shap(ing) the post-corona era”, it’s still far from clear that the future of capitalism is really up for renegotiation, or put differently, that ‘Davos Man’ is ready to “walk the talk.” As we’ve learned, Noblesse oblige will only take you so far.