tag:theconversation.com,2011:/au/topics/davos-2370/articlesDavos – The Conversation2024-01-15T00:01:48Ztag:theconversation.com,2011:article/2208762024-01-15T00:01:48Z2024-01-15T00:01:48ZAs the billionaires gather at Davos, it’s worth examining what’s become of their dreams<p>Gathering for their annual World Economic Forum at <a href="https://www.weforum.org/agenda/2023/12/davos-2024-what-to-expect-and-whos-coming/">Davos</a> in Switzerland this week, the world’s business and political elite will be digesting some unpleasant reading courtesy of the aid agency <a href="https://www.oxfam.org/en/research/inequality-inc">Oxfam International</a>. </p>
<p>Oxfam’s annual report on global inequality released this morning shows the wealth of the world’s five richest billionaires has <a href="https://oi-files-d8-prod.s3.eu-west-2.amazonaws.com/s3fs-public/2024-01/Davos%202024%20Report-%20English.pdf">more than doubled</a> since the start of the decade, while 60% of humanity has grown poorer.</p>
<p>Among the findings of the report entitled <a href="https://oi-files-d8-prod.s3.eu-west-2.amazonaws.com/s3fs-public/2024-01/Davos%202024%20Report-%20English.pdf">Inequality Inc</a> are that</p>
<ul>
<li><p>billionaires own US$3 trillion more than they did three years ago, meaning their wealth has grown at three times the rate of inflation</p></li>
<li><p>even in Australia, the wealth of billionaires has climbed 70%</p></li>
<li><p>five billion other people can’t afford what they could three years ago.</p></li>
</ul>
<p>Progress in Africa, which seemed promising for much of this century, has stalled since COVID. </p>
<p>And large parts of the populations in wealthy countries, feeling left behind, have been lured by the appeal of rightwing populism – ironically, largely promoted by billionaires and their advocates.</p>
<h2>Dreams of Davos past</h2>
<p>This isn’t how things were supposed to turn out.</p>
<p>In its glory days in the 1990s, the Davos forum was the driving force promoting the idea of <a href="https://www.weforum.org/agenda/2021/01/klaus-schwab-on-what-is-stakeholder-capitalism-history-relevance/">stakeholder capitalism</a> in which corporations controlled by shareholders were supposed to advance the interests of everyone who had a stake in their activities: workers, consumers, communities and the environment.</p>
<p>The Forum still <a href="https://www.weforum.org/about/world-economic-forum/">promotes the idea</a> on its website.</p>
<p>Back then, as communism collapsed, everything seemed possible. </p>
<p>Pundits like Thomas Friedman spoke of a <a href="http://www.herinst.org/BusinessManagedDemocracy/government/international/straitjacket.html">golden straitjacket</a> in which universal prosperity could be achieved if only the world embraced liberal capitalism, overseen by an <a href="https://www.thomaslfriedman.com/the-lexus-and-the-olive-tree/">electronic herd</a> of fund managers making investment decisions.</p>
<p>With appropriately-constrained policies, governments could ensure a rising economic tide lifted all boats. </p>
<p>In the UK and the US the so-called <a href="https://www.britannica.com/topic/third-way">Third Way</a> policies of Tony Blair and Bill Clinton were seen as delivering <a href="https://www.jstor.org/stable/jcorpciti.28.113">capitalism with a human face</a>.</p>
<p>Three decades on, that vision is looking increasingly threadbare.</p>
<p>From the left, there is increasing pressure for radical alternatives; from the right, there is increasing pushback against the Forum’s brand of “<a href="https://www.theguardian.com/commentisfree/2022/jan/30/woke-capitalism-new-villain-of-the-right-only-way-forward">woke capitalism</a>”.</p>
<p>Financial managers remain as powerful as ever, but in the aftermath of the global financial crisis and multiple exposures of <a href="https://www.reuters.com/world/us/wall-street-criminal-enforcer-urges-whistleblowers-come-forward-2024-01-10/">criminal</a> <a href="https://www.economist.com/finance-and-economics/2020/10/03/jpmorgan-chase-faces-a-fine-of-920m-for-market-manipulation">wrongdoing</a> by their firms, there is less and less faith in their beneficence and collective wisdom.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/brian-schmidt-my-five-days-in-davos-22154">Brian Schmidt: my five days in Davos </a>
</strong>
</em>
</p>
<hr>
<h2>Billionaires are becoming the problem</h2>
<p>Billionaires were not important enough to be seen as a major problem back in the early 1990s. In 1991, as communism collapsed, Forbes Magazine assessed the total wealth of the world’s five richest people at less than <a href="https://www.washingtonpost.com/archive/lifestyle/1991/07/08/2-japanese-top-forbess-rich-list/88637f38-1b78-4525-ac1b-f6cd24906c58/">$US70 billion</a>.</p>
<p>And the most prominent billionaires at the time were relatively appealing figures like <a href="https://www.gatesnotes.com/Bio">Bill Gates</a> and <a href="https://www.britannica.com/biography/Warren-Edward-Buffett">Warren Buffett</a>.</p>
<p>But since then, while US prices have doubled, the wealth of the top five has climbed tenfold. And they have become less interested in the idea that others should benefit from the system that has benefited them. </p>
<p>A case in point is <a href="https://www.forbes.com/billionaires/">Jeff Bezos</a> who is number three on the rich list with net wealth of US$114 billion and runs Amazon whose brutal working conditions and anti-union stance are detailed in the Oxfam report.</p>
<p>Another is <a href="https://www.forbes.com/billionaires/">Elon Musk</a>, number two on the rich list with US$180 billion, who could once have been seen as merely eccentric, but his recent embrace of neo-Nazis goes further.</p>
<p>And, appropriately for what Oxfam calls the <a href="https://oi-files-d8-prod.s3.eu-west-2.amazonaws.com/s3fs-public/2024-01/Davos%202024%20Report-%20English.pdf">gilded age of division</a>, another is the very richest man in the world, <a href="https://www.forbes.com/billionaires/">Bernard Arnault</a>, whose family owns luxury goods brands including Louis Vuitton and Sephora. </p>
<p>Arnault embodies the resurgence of what Thomas Piketty has called <a href="https://insidestory.org.au/the-coming-boom-in-inherited-wealth/">patrimonial society</a>. </p>
<p>He took over the management of his father’s business and intends to pass his business on to his sons.</p>
<p>All have benefited from what is sometimes called neoliberalism: the mix of ideas including privatisation, financial deregulation and tax cuts that was meant to deliver stakeholder capitalism.</p>
<p>What neoliberalism has given us instead is greater division – something the billionaires gathered at Davos ought to consider this week as they reminisce about forums past.</p>
<p>A reasonable set of fresh ideas would be that put forward by Oxfam: direct government intervention to reduce inequality including but not limited to reasserting the roles of governments as regulators and service providers abdicated on the advice of gatherings such as the one in Davos.</p><img src="https://counter.theconversation.com/content/220876/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Quiggin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The World Economic Forum was once about spreading wealth. But in the past three years, the wealth of the world’s top five billionaires has more than doubled while 60% of humanity has grown poorer.John Quiggin, Professor, School of Economics, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1989692023-02-15T19:15:23Z2023-02-15T19:15:23ZThe New International Economic Order stumbled once before. Will it succeed a second time around?<figure><img src="https://images.theconversation.com/files/509290/original/file-20230209-22-w4fp3a.jpg?ixlib=rb-1.1.0&rect=37%2C12%2C8325%2C5554&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">People gather in the Davos Congress Center prior to the start of the World Economic Forum in Davos, Switzerland in January 2023.</span> <span class="attribution"><span class="source">(AP Photo/Markus Schreiber)</span></span></figcaption></figure><p>Calls for a new approach to the management of global affairs intensified after the curtain came down on this year’s World Economic Forum (WEF) <a href="https://www.reuters.com/business/davos-2023-world-economic-forum-explained-2023-01-16/">annual meeting</a> held at Davos, Switzerland.</p>
<p>In the wake of the WEF’s <a href="https://www.theguardian.com/business/2023/jan/18/mutiny-erupts-among-wef-staff-over-role-of-mr-davos-klaus-schwab">headline-grabbing controversies about the legitimacy of WEF’s leadership</a> and <a href="https://www.weforum.org/about/book">proposals for a new global economy</a>, a movement seeking to renew the promise of global co-operation quietly re-emerged. Delegates from over 25 countries, organized by a group called Progressive International, assembled in Havana on Jan. 27 to declare their intent to <a href="https://progressive.international/blueprint/d3b4f9e2-3fd7-4d9a-b067-d13b073b1c3f-presenting-the-havana-declaration-on-the-new-international-economic-order/">build a New International Economic Order (NIEO) fit for the 21st century</a>. </p>
<p>The Havana signatories are mobilizing around <a href="https://media.un.org/en/asset/k11/k11drtwp1w">Cuba’s presidency of the Group of 77</a> at the UN. They aim to use Cuba’s platform to revive discussions about a NIEO in the General Assembly. This diverse group of researchers, government officials and activists <a href="https://act.progressive.international/nieo-collection/#collection-00">intend to develop a new political vision</a> for managing the world economy, in the face of several global crises, over the next 16 months.</p>
<p>They hope to enshrine their vision in a UN Declaration next year that would coincide with the 50th anniversary of the <a href="http://www.un-documents.net/s6r3201.htm">General Assembly’s adoption of the Declaration on the Establishment of a New International Economic Order</a>.</p>
<p>The NIEO’s signatories seek to rebuild the collective power of emerging and developing countries within and beyond the UN system. They also support the creation of new governance institutions that would fundamentally transform the international system. In doing so, they are committed to proposing alternative ways to respond to international crises.</p>
<p>While this attempt to revamp global partnerships appears to be promising, at a time of overlapping global emergencies, the pitfalls are numerous. </p>
<h2>The birth of the NIEO</h2>
<p>The NIEO emerged in 1973 as the <a href="https://www.un.org/en/chronicle/article/early-days-group-77">collective project of developing countries</a> to transform the United Nations system. Its adherents were convinced that the international community’s insufficient response to several interlinked crises was undermining their interests. </p>
<p>In 1971, the unilateral U.S. decision <a href="https://history.state.gov/milestones/1969-1976/nixon-shock">to abandon the convertibility of U.S. dollars into gold</a> left many countries with devalued dollars. </p>
<p>To navigate this inflationary context, and respond to U.S. policy during <a href="https://www.britannica.com/event/Yom-Kippur-War">the 1973 Yom Kippur War</a>, members of the Organization of the Petroleum Exporting Countries <a href="https://history.state.gov/milestones/1969-1976/oil-embargo">placed an embargo on oil exports to the U.S</a>. </p>
<figure class="align-center ">
<img alt="Black and white photo of a man with a receding hairline speaking from behind a podium" src="https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">In 1971, then U.S. president Richard Nixon suspended the convertibility of U.S. dollars into gold to pressure U.S. trading partners into adjusting their exchange rates to the advantage of the U.S.</span>
<span class="attribution"><span class="source">(AP Photo)</span></span>
</figcaption>
</figure>
<p>The ensuing oil price increase compounded an ongoing <a href="https://doi.org/10.1093/acprof:oso/9780190600686.003.0007">food security crisis</a> and undercut the ambitious goals of the <a href="http://www.un-documents.net/a25r2626.htm">second UN Development Decade</a>. Moreover, the ongoing threat of nuclear conflict, and an emerging awareness of unaddressed environmental challenges, heightened popular malaise about the adequacy of international institutions.</p>
<p>In the wake of these crises, the NIEO was formed. Building on the <a href="https://www.southcentre.int/question/revisiting-the-1955-bandung-asian-african-conference-and-its-legacy/">ambitious development agenda</a> of leaders across the <a href="https://onlineacademiccommunity.uvic.ca/globalsouthpolitics/2018/08/08/global-south-what-does-it-mean-and-why-use-the-term/">Global South</a>, it included a comprehensive package of reform proposals. </p>
<p>Its <a href="http://www.un-documents.net/s6r3202.htm">Programme of Action</a> sought to help countries exercise more control over their own natural resources. The NIEO package recognized that many developing countries had been structured by colonizers to export raw materials and <a href="https://unctad.org/publications/prebisch-lectures">its backers sought to remedy this condition</a>. </p>
<p>Its advocates also pushed for new institutions to govern commodities and transnational corporations, and worked to speed up the transfer of technologies that would facilitate industrialization and end <a href="https://unctad.org/publication/state-commodity-dependence-2021">commodity dependence</a>. </p>
<h2>The NIEO’s stumbling block</h2>
<p>After the General Assembly adopted the NIEO, efforts to implement the full package failed to gain traction. While the U.S. initially recognized <a href="https://history.state.gov/historicaldocuments/frus1969-76v38p1/d32">some of the underlying challenges</a>, it advocated an issue-by-issue approach to engaging with the action program. </p>
<p>Negotiation processes on individual components of the NIEO subsequently multiplied. This fragmentation <a href="https://robarts.info.yorku.ca/files/wto-pdf/wto_globalembedliberal.pdf">taxed the capacity of developing countries and contributed to undermining their unity</a>. </p>
<p>Soon after, opinions on the program’s components polarized, and dialogue reached a contentious impasse. An <a href="https://sharing.org/information-centre/reports/brandt-report-summary">independent commission</a> was then struck to resolve the conflict that had emerged <a href="https://www.wilsoncenter.org/blog-post/the-non-aligned-movement-and-the-north-south-conflict">between the Global North and the Global South</a> over the NIEO. </p>
<p>By the early 1980s, as interest rates rose and a global <a href="https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/WESS_2017_ch3.pdf">debt crisis loomed</a>, some of <a href="https://www.britannica.com/biography/Houari-Boumedienne">the NIEO’s biggest champions had died</a> or <a href="https://www.britannica.com/biography/Michael-Manley">lost political power</a>. </p>
<p>The initiative ebbed after U.S. President Ronald Reagan declared an <a href="https://www.reaganlibrary.gov/archives/speech/statement-first-plenary-session-international-meeting-cooperation-and-development">end to the search for new international institutions</a> in his address to delegates at the International Meeting on Cooperation and Development held in Cancun on Oct. 22, 1981.</p>
<figure class="align-center ">
<img alt="Two rows of people standing and sitting on a white beach with turquoise water in the background" src="https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Heads of state and government at the Cancun North-South Economic Summit of 1981 at the Cancun Sheraton Hotel Beach in Mexico.</span>
<span class="attribution"><span class="source">(U.S. Federal Government)</span></span>
</figcaption>
</figure>
<p>And now, fifty years later, <a href="https://theconversation.com/on-the-brink-global-crises-ranging-from-climate-to-economic-meltdown-demand-radical-change-190641">we are facing yet another set of intersecting crises</a> with woefully inadequate global responses. </p>
<p>Ongoing global challenges, including the <a href="https://www.who.int/emergencies/situations">public health crisis</a>, <a href="https://www.wfp.org/global-hunger-crisis">global food insecurity</a>, <a href="https://www.cfr.org/global-conflict-tracker">geopolitical conflicts</a> and the <a href="https://www.unep.org/news-and-stories/story/world-headed-climate-catastrophe-without-urgent-action-un-secretary-general">climate emergency</a>, are once again <a href="https://www.un.org/sustainabledevelopment/blog/2022/07/cascading-global-crises-threaten-human-survival-and-the-sdg-roadmap-is-the-way-forward/">outstripping the response capacity of the UN</a>. </p>
<h2>Back to the future?</h2>
<p>The NIEO’s faltering trajectory offers several lessons that must not be forgotten as pressure to renovate global institutions intensifies. </p>
<p>For starters, any proposed renewal of the NIEO must recognize that the original effort went off the rails after the full package was broken up. A case can be made that more substantive results could have been achieved had the program proceeded as <a href="https://www.wto.org/english/tratop_e/dda_e/work_organi_e.htm">an indivisible single undertaking</a>. </p>
<p>The NIEO also served as a rallying cry that enabled numerous <a href="https://www.britannica.com/biography/Muammar-al-Qaddafi">despots</a> and <a href="https://www.britannica.com/biography/Sekou-Toure">authoritarians</a> to sound like change-makers on the global stage, even as they repressed their people and looted state coffers. Today’s reformers must achieve a better balance between talking the talk at global gatherings and walking the walk for their people. </p>
<p>Moreover, the NIEO <a href="https://www.un.org/en/conferences/environment/stockholm1972">never seriously engaged with concerns</a> about the environment. Countries that depend on commodity exports have an interest in taking arguments about the need to <a href="https://unstats.un.org/sdgs/report/2019/goal-12/">downscale humanity’s material footprint</a> seriously. They must think creatively about possible futures that discard <a href="https://www.versobooks.com/books/3989-the-future-is-degrowth">the unsustainable pursuit of infinite growth</a>, and act boldly to end the climate emergency. </p>
<p>As the chorus of voices challenging the global governance status quo swells, a NIEO revival will make a difference if it moves beyond nostalgia. </p>
<p>While the <a href="https://www.jstor.org/stable/2706612">ideological conflicts that plagued the initial drive</a> for a new order could easily undermine the current effort, the fact that idealists and realists are uniting to build genuine paths to a world beyond the WEF is refreshing. Whatever our individual politics, we should watch this space.</p><img src="https://counter.theconversation.com/content/198969/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adam Sneyd does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A renewed attempt to revamp global partnerships appears to be promising, but at a time of overlapping global emergencies, the pitfalls are numerous.Adam Sneyd, Associate Professor, Political Science, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1979382023-01-17T18:34:05Z2023-01-17T18:34:05ZDavos: three ways leaders can use these summits to create a more sustainable world<p>Davos 2023 is the World Economic Forum’s (<a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2023">WEF</a>) first in-person annual meeting since the start of the COVID pandemic. The yearly gathering sees business, political and civil society leaders convene in the Swiss mountain resort with academics, journalists and celebrities to discuss global economic agendas. Many regard it as essentially <a href="https://theintercept.com/2020/12/08/great-reset-conspiracy/">a forum for the wealthy</a>, but the 2023 Davos summit has returned at “<a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2023/about/meeting-overview">a critical inflection point for the world</a>”, according to the WEF.</p>
<p>This year’s meeting slogan – Cooperation in a Fragmented World – nods to what the WEF’s recently published <a href="https://www.weforum.org/agenda/2023/01/these-are-the-biggest-risks-facing-the-world-global-risks-2023">Global Risks Report</a> calls the “polycrises” affecting our interconnected world. These intersecting crises range from climate change and energy shortfalls to food insecurity and forced migration. The WEF is calling for “bold collective action” to address them.</p>
<p>In the wake of COVID, many people seemed to be more aware of how vulnerable the world is to the excesses of economic production. UN secretary general, <a href="https://www.theguardian.com/commentisfree/2020/apr/02/un-secretary-general-coronavirus-crisis-world-pandemic-response">António Guterres</a>, declared that we needed to build more “sustainable economies and societies”, and wider hopes abounded for greater global co-operation on human and environmental health.</p>
<p>Then, as much of the world emerged from lockdowns and restrictions, national governments refocused on economic recovery. This appeals of course to the oldest human impulses of progress. But it also led to a missed opportunity to rethink how economies should be organised for a more sustainable world. Global leaders could have used this time to respond to the ecological damage of late modern capitalism by working towards a more regulated, socially and environmentally responsible economic system.</p>
<p>Political leaders across the world may have failed to take this chance immediately after COVID, but the UN explored these issues and published a new vision for global security in 2022 called <a href="https://hdr.undp.org/content/2022-special-report-human-security">New Threats to Human Security in the Anthropocene</a>. I was one of the background authors for the report, which sets out three vital challenges for securing the sustainability of the planet:</p>
<h2>1. Protect both human and environmental security</h2>
<p>The UN report documents the lack of global action in response to <a href="https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_Full_Report.pdf">alarming scientific measures</a> of planetary health – from greenhouse gas emissions to temperature rise, from deforestation to biodiversity loss. It underlines the connections between industrial economic production, climate change and human health.</p>
<p>Among the many reasons why the impact of <a href="https://apps.who.int/iris/bitstream/handle/10665/62989/WHO_EHG_96.7.pdf">capitalism on the environment</a> has yet to be fully recognised, one of the most important is the political ascendancy of neoliberalism. This way of thinking promotes free-market ideas that have long sidelined the environment in advancing economic development. The UK government’s 2021 <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/962785/The_Economics_of_Biodiversity_The_Dasgupta_Review_Full_Report.pdf">Dasgupta Review</a> – which examines the relationship between economics and biodiversity – made the same point.</p>
<p>Neoliberalism consistently prioritises <a href="https://ugapress.org/book/9780820351056/the-long-war">military and economic security</a> over <a href="https://hdr.undp.org/content/human-development-report-1994">human and environmental security</a>. This has meant that global economic production values profit over both planetary and human health. Probably the best examples of this are the rise of <a href="https://monthlyreview.org/2020/05/01/covid-19-and-circuits-of-capital">“Big Farm” agribusiness</a> and the role unregulated <a href="https://www.theguardian.com/world/2020/apr/06/ban-live-animal-markets-pandemics-un-biodiversity-chief-age-of-extinction">wildlife markets</a> may have played in <a href="https://www.unenvironment.org/news-and-stories/story/coronavirus-outbreak-highlights-need-address-threats-ecosystems-and-wildlife">the emergence of COVID</a>.</p>
<h2>2. Measure development differently</h2>
<p>Defining and measuring development is also an important consideration for today’s world leaders. But when linking economic growth to development, it’s important to use measures other than GDP.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/beyond-gdp-changing-how-we-measure-progress-is-key-to-tackling-a-world-in-crisis-three-leading-experts-186488">Beyond GDP: changing how we measure progress is key to tackling a world in crisis – three leading experts</a>
</strong>
</em>
</p>
<hr>
<p>The UNDP’s 2020 <a href="https://hdr.undp.org/content/human-development-report-2020">Human Development Report</a> introduced what it calls “planetary pressure adjustments” to measure human development. This classifies a country’s development not just in terms of economic prosperity, but also in relation to carbon emissions and resource use per person.</p>
<p>Other alternative models and measures of economic welfare, including <a href="https://www.weforum.org/agenda/2022/06/what-is-degrowth-economics-climate-change/#:%7E:text=What%20is%20degrowth%3F,planet%20by%20becoming%20more%20sustainable">degrowth</a>, are gaining traction with <a href="https://ipbes.net/sites/default/files/inline/files/ipbes_global_assessment_report_summary_for_policymakers.pdf">policymakers</a>. <a href="https://www.penguin.co.uk/books/441772/less-is-more-by-jason-hickel/9781786091215">Supporters of degrowth</a> want to transform how wellbeing is measured and how our economies are regulated to ensure resources are used more sustainably. But this requires both political acceptance and wider <a href="https://www.irishtimes.com/opinion/2022/08/10/is-it-time-for-ireland-to-consider-degrowth">public buy-in</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/degrowth-why-some-economists-think-abandoning-growth-is-the-only-way-to-save-the-planet-podcast-170748">Degrowth: why some economists think abandoning growth is the only way to save the planet – podcast</a>
</strong>
</em>
</p>
<hr>
<h2>3. Use global governance to create a shared planet</h2>
<p>Building consensus on how to create a more sustainable world will take collective global action on shared interests. It will require solidarity and robust global governance tools to enable <a href="https://unsdg.un.org/sites/default/files/2020-03/SG-Report-Socio-Economic-Impact-of-Covid19.pdf">regulation and accountability</a>. This means legal consequences for countries that don’t adhere to agreed conventions such as the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement">Paris Agreement</a> on climate change, or the <a href="https://www.coe.int/en/web/landscape">Council of Europe Convention</a> on landscape. And international organisations such as the World Health Organisation will need more powers to oversee international laws such as the <a href="https://www.tandfonline.com/doi/full/10.1080/13523260.2020.1771955">International Health Regulations</a> in monitoring and combating the global spread of disease.</p>
<p>Governments can also use <a href="https://hdr.undp.org/content/human-development-report-2020">financial incentives</a> to encourage companies to protect biodiversity and advance nature-based solutions to industry problems. Technology can play a part too, although it’s important to be wary of both the limits and rhetoric of the “<a href="https://www.nature.com/articles/s43016-021-00275-z">technological fix</a>”.</p>
<figure class="align-center ">
<img alt="14 January 2020: the congress center in Davos with flags of nations at sunrise during the WEF World Economic Forum" src="https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Congress Center in Davos, Switzerland during the World Economic Forum’s 2020 annual meeting.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/davos-gr-switzerland-14-january-2020-1617109249">makasana photo/Shutterstock</a></span>
</figcaption>
</figure>
<p>A more sustainable world means understanding the planet’s <a href="http://www.librelloph.com/journalofhumansecurity/article/view/johs-17.1.15/html">intersecting human and environmental crises</a>, and working out how to address them holistically, cooperatively and responsibly. After that, the challenge lies in using the institutions and mechanisms of global governance that already exist, as well as pushing leaders to make brave decisions that put <a href="https://hdr.undp.org/content/2022-special-report-human-security">human and environmental security for all</a> ahead of endless profit for the few.</p><img src="https://counter.theconversation.com/content/197938/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Morrissey was a background author for the UNDP 2022 Special Report on Human Security, "New Threats to Human Security in the Anthropocene".</span></em></p>Leaders must find new ways to measure development and economic progress and to co-operate on prioritising human and environmental security over profits.John Morrissey, Professor of Geography, University of GalwayLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1752752022-01-21T14:25:32Z2022-01-21T14:25:32ZSome of the super-rich want to pay more tax – but society cannot afford to depend on them<figure><img src="https://images.theconversation.com/files/441976/original/file-20220121-25-1qvk42v.jpg?ixlib=rb-1.1.0&rect=89%2C77%2C4191%2C2734&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/private-white-luxury-superyacht-eclipse-anchored-1059530804">Shutterstock/Pilguj</a></span></figcaption></figure><p><a href="https://www.theguardian.com/business/2021/jun/12/clamour-for-wealth-tax-grows-after-revelations-about-super-richs-affairs">Demands</a> for the super wealthy to pay more taxes are <a href="https://www.npr.org/2021/06/08/1004312236/propublica-wealthiest-u-s-individuals-avoid-paying-their-fair-share-in-taxes">not new</a>. But they don’t usually come from billionaires or millionaires.</p>
<p>Yet on January 19 2022, around 100 of the world’s richest people <a href="https://www.france24.com/en/economy/20220119-tax-us-now-to-reduce-wealth-inequality-say-global-millionaires">declared</a> that the time has come for governments to take more of their money. In an open letter, they said their personal wealth should be used to improve public health and reduce extreme poverty. </p>
<p><a href="https://www.intaxwetrust.org/">The letter</a>, entitled “In Tax we Trust” and signed by 102 extremely wealthy individuals, said: “While the world has gone through an immense amount of suffering in the last two years, we have actually seen our wealth rise during the pandemic – yet few if any of us can honestly say that we pay our fair share in taxes.”</p>
<p>It went on: “Restoring trust requires taxing the rich. The world – every country in it – must demand the rich pay their fair share. Tax us, the rich, and tax us now.”</p>
<p>So what are we to make of this apparently generous invitation? Could it actually mark a turning point in calls for a more progressive tax system, or is it a PR exercise driven by widespread pressure and criticism?</p>
<p>Certainly social media has allowed the world’s wealthiest to be <a href="https://meaww.com/jeff-bezos-charity-gala-crowd-donation">mocked</a>, <a href="https://www.vanityfair.com/news/2021/10/elon-musk-billionaires-tax">challenged</a> and <a href="https://www.theguardian.com/technology/2021/mar/29/jeff-bezos-amazon-twitter-social-media">criticised</a> in a way that was never possible in the times of John D. Rockefeller or Henry Ford. The Dutch historian <a href="https://www.bbc.co.uk/news/av/world-47077624">Rutger Bregman</a> became an internet sensation in 2019 when he <a href="https://www.theguardian.com/business/2019/jan/30/historian-berates-billionaires-at-davos-over-tax-avoidance">implored</a> attendees of the World Economic Forum in Davos to “stop talking about philanthropy and start talking about taxes”. He added: “It feels like I’m at a firefighters’ conference and no one’s allowed to speak about water.”</p>
<p>These kinds of open challenges point to a noticeable shift in thinking about the <a href="https://www.pewresearch.org/fact-tank/2021/07/28/americans-views-about-billionaires-have-grown-somewhat-more-negative-since-2020/">value of billionaires</a> and the need for a <a href="https://www.wealthandpolicy.com/wp/EP2_PublicAttitudes.pdf">wealth tax</a>. </p>
<p>Indeed, a closer reading of the letter raises the possibility that it was motivated as much by pragmatism as morality. It tellingly concludes with the warning: “History paints a pretty bleak picture of what the endgame of extremely unequal societies looks like…it’s taxes or pitchforks. Let’s listen to history and choose wisely.”</p>
<p>Perhaps then we should be cautious, even wary, when the world’s richest decide it is time for change. Notably, there is no mention in the letter of the <a href="https://www.politico.eu/article/amazon-workers-of-the-world-unite-jeff-bezos-protest/">global labour conditions</a> crucial to the creation of <a href="https://www.google.co.uk/books/edition/Flat_World_Big_Gaps/48RIZBs3ZQEC?hl=en&gbpv=0">extreme wealth</a> or whether it is ever truly deserved.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/P8ijiLqfXP0?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>There is also the fact that apparently philanthropic acts can also be used to <a href="https://www.sciencedirect.com/science/article/abs/pii/S0304422X12000150">prioritise the wealth</a> of benefactors <a href="https://econreview.berkeley.edu/the-merits-and-drawbacks-of-philanthrocapitalism/">over empowering</a> those it is meant to help. Famous charities often shield the super-rich from <a href="https://www.thenation.com/article/archive/philanthropy-charity-inequality-taxes/">various taxes</a>, while simultaneously granting them a <a href="https://www.theguardian.com/news/2018/may/24/the-trouble-with-charitable-billionaires-philanthrocapitalism">great degree of control</a> over who gets what in society.</p>
<h2>The price of billionaires</h2>
<p>The public acknowledgement by billionaires that they should be taxed more appears to be a clear recognition change is needed when it comes to addressing issues of global inequality, health and climate change. Yet it could also be viewed as another instance of what has been termed <a href="https://bristoluniversitypress.co.uk/woke-capitalism">“woke capitalism</a>” – an attempt by the people primarily responsible for various social problems to present themselves as the heroes of a generous solution. </p>
<p>In doing so, the argument goes, they deflect deeper questions of whether a society with a vibrant democracy, shared prosperity and ecological sustainability can actually afford billionaires.</p>
<p>A different approach is to view the very existence of billionaires as a <a href="https://inequality.org/research/billionaires-sign-econ-failure/">symptom</a> of a <a href="https://www.cnbc.com/2019/09/12/billionaires-should-be-taxed-out-of-existence-says-thomas-piketty.html">failed economic system</a>, rather than a celebration of its success. It means profoundly rethinking where wealth and value come from, and replacing the “<a href="https://www.managementtoday.co.uk/its-time-end-cult-ceo/leadership-lessons/article/1431285#:%7E:text=For%20much%20too%20long%2C%20companies,own%20all%2Dpowerful%20company%20leader.">cult of the CEO</a>” in favour of alternative drivers of innovation and progress like public investment and human labour. It also means taking power back from the hugely wealthy and expanding the democratic voice that people have in their workplaces and communities.</p>
<p>Getting billionaires to pay more tax therefore, is just one of many possible steps. More substantial transformations might include a universal basic income leading to an empowering <a href="https://www.theguardian.com/news/2018/jan/19/post-work-the-radical-idea-of-a-world-without-jobs">post-work future</a>, the rise of a <a href="https://www.oecd.org/cfe/leed/social-economy/">social economy</a> committed to placing people over profits, or moves towards a “<a href="https://theconversation.com/life-in-a-degrowth-economy-and-why-you-might-actually-enjoy-it-32224">degrowth economy</a>” which could benefit the planet – and make everyone less dependent on the whims of the super-rich.</p><img src="https://counter.theconversation.com/content/175275/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Bloom does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Can modern society afford billionaires?Peter Bloom, Professor of Management, University of EssexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1304022020-01-23T14:51:38Z2020-01-23T14:51:38ZHow to really hold business to account on their carbon footprint – include their supply chains<figure><img src="https://images.theconversation.com/files/311424/original/file-20200122-117954-tp6roa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Supply chains can add a lot to a company's carbon footprint.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/loading-cargo-on-plane-airport-view-308983271">By mariakray / Shutterstock</a></span></figcaption></figure><p>Donald Trump may not believe climate change is happening, <a href="https://theconversation.com/why-us-companies-will-ignore-trumps-withdrawal-from-the-paris-climate-agreement-78865">but most business leaders do</a> and it is no surprise to see it <a href="https://www.nytimes.com/2020/01/20/business/energy-environment/davos-climate-change.html">top of the agenda</a> at the World Economic Forum in Davos.</p>
<p>Many firms and organisations are now working hard to reduce their carbon emissions. And it is not just good public relations. Pressure is building on firms to lead society in the move towards a sustainable future.</p>
<p>But still too few include their supply chain when considering their environmental impact and this is bad news for the environment. Supply chains contribute significantly to a firm’s carbon footprint and can amount to four times the organisation’s own operational emissions.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-us-companies-will-ignore-trumps-withdrawal-from-the-paris-climate-agreement-78865">Why US companies will ignore Trump's withdrawal from the Paris climate agreement</a>
</strong>
</em>
</p>
<hr>
<p>The Carbon Disclosure Project (CDP), a charity running the global disclosure system on carbon emissions for investors and other interested parties, found <a href="https://www.cdp.net/en/research/global-reports/changing-the-chain">just 29% reported absolute decreases in emissions</a>.</p>
<p>As well as being bad for the environment, this will increasingly cause problems for businesses too. A growing number of regulators worldwide now require publicly listed companies to include measurements of their greenhouse gas emissions in their annual reports. The UK <a href="https://www.gov.uk/government/consultations/streamlined-energy-and-carbon-reporting">introduced</a> “streamlined energy and carbon reporting” in 2019. This includes supply chains.</p>
<h2>Different levels of engagement</h2>
<p>By analysing the CDP annual survey data from 2014 to 2017, <a href="https://doi.org/10.1002/bse.2392">my colleague Jens Roehrich and I found</a> 1,686 listed companies from all over the world that were actively collecting environmental data and engaging with their supply chain.</p>
<p>Although two-thirds of our sample firms were not doing any of this, we can at least see that engaging with your suppliers is on the rise. The number of firms talking to some or all of their supply chain increased by 57% in the three years we looked at.</p>
<p>We were able to categorise the firms into three levels of activity: basic, transactional and collaborative. The basic level sees companies typically send their suppliers a survey to fill in on their emissions. US software firm Symantec produces an annual report on the greenhouse gas emissions of its suppliers, while Bank of America has done a CDP supply chain survey since 2009.</p>
<p>This is the first step for a comprehensive carbon reduction plan, measuring and collating data. More advanced firms are using that data more productively. At the transactional level firms are calculating their carbon footprint and identifying opportunities for improvements, providing their supply chain with targets and incentives.</p>
<p>The airliner Virgin Atlantic aims to reduce emissions from its supply chain each year. Meanwhile, nuclear power firm Exelon sets goals for its suppliers to reduce energy usage and greenhouse gas emissions.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/sustainable-diets-will-remain-a-minefield-until-we-change-the-way-we-approach-food-92386">Sustainable diets will remain a minefield until we change the way we approach food</a>
</strong>
</em>
</p>
<hr>
<p>This data is also being used by companies to develop key performance indicators. These can then be used to select a supplier or worked into contracts to assess a supplier’s performance. They can then send warnings to companies who are not achieving the required performance levels and demand improvements. For instance, pharmaceuticals company [Pfizer] benchmarks its suppliers on the basis of their greenhouse gas emissions and water consumption levels and demands corrective action when suppliers fall short of their targets. </p>
<p>At the collaborative level, firms are working with their suppliers to develop shared goals and values around sustainability. This means more direct conversations through meetings, seminars on best practices, as well as establishing online discussion groups designed to foster innovations that reduce their carbon footprint and create greener products and services.</p>
<p>Food multinational Kellogg’s has organised a Sustainability Consortium with its supply chain to advance scientific research and develop standards and tools that have the potential to improve the environmental, social and economic impacts of their products. Similarly, InterContinental Hotels Group is working with the International Tourism Partnership to reduce the environmental impact of the cotton used in its bed linen.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Hotels can consider the carbon footprint of how their linen is produced.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/rolls-industrial-cotton-fabric-clothing-cloth-768937246">Shutterstock</a></span>
</figcaption>
</figure>
<p>Firms at the collaborative level also seek to engage customers and consumers, persuading them, through marketing and public relations, of the benefits of new, greener products and how to use them in a way that is less harmful to the environment.</p>
<p>Chemicals company Ecolab partners with its customers to reduce their energy demands and carbon emissions through innovations. French hospitality firm Sodexo funds a professor of sustainable sourcing at the Euromed School of Management in Marseilles.</p>
<p>If firms have to report all their emissions, from the supply chain to the customer, then what each one does affects the other. This makes the collaborative approach increasingly important. Companies need to understand that they are all part of a system that has to work together, rather than use it as another supply chain management tool.</p>
<h2>Tech leading the way</h2>
<p>Measuring emissions across the whole value chain can be incredibly complex for a company like Walmart with its thousands of suppliers around the world. The amount of data involved is probably why we see tech companies leading the way in reducing their carbon footprint. Their data analytics skills mean it is natural for them to collate data and put it to good use and work up and down the supply chain.</p>
<p>Their experience of handling and managing data also means they see this trend and increasing requirement to record and measure emissions for companies as an opportunity. If they figure out and produce a comprehensive software package that does all this effectively, they can then sell that platform to other firms looking to manage their whole carbon footprint. <a href="https://www.verizon.com/about/responsibility/sustainability">Verizon</a>, for example, now sees its Internet of Things products, designed to reduce carbon emissions, as a significant source of revenue opportunities.</p>
<p>Sustainability has become the issue of this generation. If businesses are to prosper in this climate, they need to include their whole supply chain to claim they are truly on the planet’s side and not be accused of creative carbon accounting.</p><img src="https://counter.theconversation.com/content/130402/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Frederik Dahlmann does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Supply chains can amount to four times an organisation’s own operational carbon footprint.Frederik Dahlmann, Associate Professor of Strategy and Sustainability, Warwick Business School, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1300982020-01-23T12:26:06Z2020-01-23T12:26:06ZQuantitative easing now looks permanent – and has turned central banks into pseudo governments<figure><img src="https://images.theconversation.com/files/311390/original/file-20200122-117907-9a9u0g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Forever?</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/financial-technology-concept-fintech-foreign-exchange-1289383594">Metamorks</a></span></figcaption></figure><p>After a pause of a few months, the world’s leading central banks are “printing” money again to try to bolster their economies. Commonly known as quantitative easing or QE, the European Central Bank (ECB) <a href="https://www.forbes.com/sites/isabeltogoh/2019/09/12/what-to-expect-from-the-european-central-bank-decision/">resumed</a> its programme just before the turn of the year. The backdrop is <a href="https://www.aa.com.tr/en/economy/eu-sees-weak-growth-highest-employment-levels-in-q3/1664733">lukewarm growth</a>, a <a href="https://markets.businessinsider.com/news/stocks/german-gdp-economy-grew-01-in-3rd-quarter-avoids-recession-2019-11-1028688230">looming recession</a> in Germany, and <a href="https://www.telegraph.co.uk/business/2019/06/06/deflation-alert-europe-markets-lose-faith-powerless-ecb/">persistent fears</a> of Japanese-style deflation. </p>
<p>The ECB is creating new euros to buy bonds at a monthly pace of €20 billion (£17 billion). It is also signalling that QE has moved from being a temporary innovation to a permanent feature of monetary policy. </p>
<p>Meanwhile, the US Federal Reserve <a href="https://www.forbes.com/sites/greatspeculations/2019/12/11/is-the-fed-gearing-up-for-a-new-round-of-quantitative-easing/#60a3bc152c45">has also been</a> running a new asset-buying programme, creating US$60 billion (£46 billion) a month since September. It insists for technical reasons that this is not QE, though <a href="https://www.ft.com/content/27c0860e-394f-11ea-a6d3-9a26f8c3cba4">many observers</a> disagree. The Bank of Japan <a href="https://www.ft.com/content/164012f0-20c7-11ea-b8a1-584213ee7b2b">has been</a> following a similar policy almost continually <a href="https://www.reuters.com/article/us-japan-economy-boj/bank-of-japans-balance-sheet-now-larger-than-countrys-gdp-idUSKCN1NI07Z">for the past decade</a>, while there have been <a href="https://www.theguardian.com/business/2020/jan/09/bank-of-england-governor-mark-carney-hints-at-imminent-interest-rate-cut">recent hints</a> from the Bank of England that it might return to the fray for the <a href="https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2019/november-2019">first time</a> since 2016. </p>
<p>At the Davos World Economic Forum, the managing director of the IMF <a href="https://www.telegraph.co.uk/business/2020/01/21/alarmed-imf-really-thinks-davos/">has said that</a> these interventions, along with many other countries cutting interest rates, amount to the “most synchronised monetary easing since the global financial crisis”. </p>
<p>In the process, the balance sheets of the leading central banks have ballooned to many times their previous size. As we shall see, it has given them a direct role in industrial policy that few people are even aware of. </p>
<h2>Liquidity gets crunched</h2>
<p>It was the economic crisis of 2007-09 that drove the European, British and American central banks to try QE. They reduced interest rates to unprecedented levels, but it did little to increase bank lending, consumption or investment. By the turn of the decade, they realised their economies were caught in a similar liquidity trap to Japan, which <a href="https://www.investopedia.com/articles/markets/052516/japans-case-study-diminished-effects-qe.asp">had been pioneering</a> its own QE programme since the late 1990s. Nothing like this had been seen on a global scale <a href="https://www.telegraph.co.uk/finance/economics/2783215/Davos-2008-US-slides-into-dangerous-1930s-liquidity-trap.html">since the 1930s</a>. </p>
<p>So they began to create massive amounts of money to buy the bonds of governments, banks and other major companies. The idea was to drive up bond prices, which would at the same time drive down their yields or rate of interest. By doing this, long-term interest rates would be reduced in line with the cuts that the central banks had already made to short-term interest rates. This would make borrowing cheaper for those issuing the bonds, which would hopefully stimulate the economy. </p>
<p><strong>Central bank balance sheets 2006-18</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/311362/original/file-20200122-117933-1xtmcpv.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/311362/original/file-20200122-117933-1xtmcpv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/311362/original/file-20200122-117933-1xtmcpv.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=342&fit=crop&dpr=1 600w, https://images.theconversation.com/files/311362/original/file-20200122-117933-1xtmcpv.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=342&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/311362/original/file-20200122-117933-1xtmcpv.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=342&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/311362/original/file-20200122-117933-1xtmcpv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=430&fit=crop&dpr=1 754w, https://images.theconversation.com/files/311362/original/file-20200122-117933-1xtmcpv.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=430&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/311362/original/file-20200122-117933-1xtmcpv.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=430&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Central bank statistics</span></span>
</figcaption>
</figure>
<p>There has been much debate about whether QE has succeeded. It is <a href="https://theconversation.com/secular-stagnation-its-time-to-admit-that-larry-summers-was-right-about-this-global-economic-growth-trap-112977">often said that</a> along with low interest rates, it has paved the way for a new speculative bubble in riskier assets, while not unlocking enough growth to have achieved a recovery. We have never returned to the growth levels of the 2000s, as shown below.</p>
<p><strong>Global growth since 2000</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/311367/original/file-20200122-117933-6p7wxe.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/311367/original/file-20200122-117933-6p7wxe.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/311367/original/file-20200122-117933-6p7wxe.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=374&fit=crop&dpr=1 600w, https://images.theconversation.com/files/311367/original/file-20200122-117933-6p7wxe.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=374&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/311367/original/file-20200122-117933-6p7wxe.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=374&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/311367/original/file-20200122-117933-6p7wxe.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=470&fit=crop&dpr=1 754w, https://images.theconversation.com/files/311367/original/file-20200122-117933-6p7wxe.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=470&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/311367/original/file-20200122-117933-6p7wxe.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=470&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG">World Bank</a></span>
</figcaption>
</figure>
<p>Commentators like former US Treasury minister Lawrence Summers <a href="https://www.theguardian.com/business/2019/aug/26/central-bankers-conventional-tools-no-longer-working">argue that</a> instead of QE, governments should be spending our way to a stronger recovery by running higher deficits. But since there is little political will for this, others believe that QE is effectively the only game in town. </p>
<p>The ECB, which was <a href="https://www.ft.com/content/de4a958a-eab3-11e9-a240-3b065ef5fc55">fiercely criticised</a> from within the institution for resuming QE, <a href="https://www.ecb.europa.eu/pub/pdf/other/ecb.ebart201803_02.en.pdf">has pointed to</a> the benefits from the previous programme. In particular, it claims to have improved corporations’ credit access and levels of bank lending. We could add that the concerns about speculative bubbles overlook the fact that a shift in demand towards riskier assets <a href="https://www.bankofengland.co.uk/speech/2020/mark-carney-opening-remarks-at-the-future-of-inflation-targeting-conference">was precisely</a> the objective behind QE. </p>
<p>Some <a href="https://www.telegraph.co.uk/finance/economics/11165982/World-economy-so-damaged-it-may-need-permanent-QE.html">influential commentators</a> argue that QE should be used permanently, and the ECB seems to agree. The bank’s new president, Christine Lagarde, <a href="https://www.ecb.europa.eu/press/pressconf/2019/html/ecb.is190606%7E32b6221806.en.html">said in December</a>:</p>
<blockquote>
<p>We intend to continue reinvesting in full the principal payments from maturing securities purchased under [the QE programme] … for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.</p>
</blockquote>
<h2>The new industrialists</h2>
<p>It is usually overlooked that QE has also led the central banks into an industrial role that is normally restricted to governments (except the Fed, <a href="https://www.thebalance.com/tarp-bailout-program-3305895">which works</a> hand in hand with the US Treasury in this regard). For instance, while <a href="https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html">over 80%</a> of the ECB scheme buys government and other public sector bonds, a huge chunk still goes into corporate bonds and other assets. At the time of writing, the ECB holds €263 billion worth of corporate bonds – a very significant amount in relation to individual firms and the sectors in question. </p>
<p><a href="https://www.ecb.europa.eu/pub/economic-bulletin/html/eb201704.en.html#IDofBox2">According to</a> the ECB, 29% of these bonds were issued by French firms, 25% by German firms and 11% each by Spanish and Italian firms. As at September 2017, the sectors they came from included utilities (16%), infrastructure (12%), automotive (10%) and energy (7%). </p>
<p>Why were those firms and sectors targeted? The selection criteria are not always clear. Unsurprisingly, the investments have raised some political criticism. Some have argued, for example, that the money <a href="https://www.ft.com/content/d3f52ba6-fef2-11e9-b7bc-f3fa4e77dd47">should prioritise</a> green energy firms and <a href="https://www.positivemoney.eu/wp-content/uploads/2018/09/2018-Javier-Solana-%E2%80%93-Eurosystem-environmental-protection-2018.pdf">not the bonds</a> of companies that trade in fossil fuels. </p>
<p>At any rate, these central banks are now in the business of picking winners and losers in the corporate world. They’re likely to be embroiled in this for a long time: even if they did abandon QE, they are buying assets with lifespans of over 30 years in some cases. As the Bank of Italy <a href="https://www.bancaditalia.it/compiti/polmon-garanzie/pspp/index.html">has admitted</a>, the possibility of some of these companies going insolvent creates financial risks for the whole eurozone system. </p>
<p>It should be said that there are echoes of the past in these interventions. The likes of the Bank of England and Bank of Japan have been involved in salvaging firms or entire industrial sectors after economic downturns before. The Bank of England <a href="https://openaccess.city.ac.uk/id/eprint/7161/1/Bus_History_CRO_March_2015.pdf">came to own</a> a number of cotton mills in the 1920s, for instance, and then <a href="https://books.google.co.uk/books?id=P1auCwAAQBAJ&pg=PA98&lpg=PA98&dq=%22bank+of+england%22+%26+%22rolls-royce%22+rescue&source=bl&ots=tfLE8NuXdH&sig=ACfU3U2WWSxKC0U_6H5qiuKC6XmCjcbC7Q&hl=en&sa=X&ved=2ahUKEwjjx-GoupfnAhUDUcAKHcZqBeoQ6AEwB3oECAkQAQ#v=onepage&q=%22bank%20of%20england%22%20%26%20%22rolls-royce%22%20rescue&f=false">Rolls-Royce</a> in the famous 1970s rescue. Another example is France <a href="https://www.cambridge.org/core/books/controlling-credit/DBC22208B3268FBC00AB4135D7EDD37C">in the 1950s</a>, where the central bank became involved in choosing which sectors and companies to back under a scheme to distribute long-term finance. </p>
<p>The supposedly “unconventional” QE policies are therefore somewhat more conventional than is often admitted. We might like to think of central banks as technocratic institutions that merely enable the market, but not always. And the decisions about whom to prop up are being taken without any democratic input. For the situation to reverse and for the balance sheets of central banks to return to pre-crisis levels, it depends very much on whether we ever see a robust recovery. All we can say for now is that there are no signs of it yet.</p><img src="https://counter.theconversation.com/content/130098/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Valerio Cerretano does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>How many people realise that the central banks’ great programme for reviving the global economy involves hand-picking which companies and sectors to help out?Valerio Cerretano, Senior Lecturer in Management, University of GlasgowLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1304272020-01-22T17:14:27Z2020-01-22T17:14:27ZCan capitalism solve capitalism’s problems?<figure><img src="https://images.theconversation.com/files/311432/original/file-20200122-117907-966dsh.jpg?ixlib=rb-1.1.0&rect=68%2C73%2C3718%2C2015&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A session at Davos highlighted the consequences of capitalism. </span> <span class="attribution"><span class="source">Fabrice Coffrini/AFP via Getty Images</span></span></figcaption></figure><p>Capitalism is in trouble – at least judging by recent polls. </p>
<p>A <a href="https://www.washingtonpost.com/news/wonk/wp/2016/04/26/a-majority-of-millennials-now-reject-capitalism-poll-shows/">majority of American millennials reject</a> the economic system, while 55% of women age 18 to 54 <a href="https://www.axios.com/axios-hbo-poll-55-percent-women-prefer-socialism-f70bf87e-34fd-4b63-b1f6-2f2b6900f634.html">say they prefer socialism</a>. More Democrats now <a href="https://www.pewresearch.org/fact-tank/2019/06/25/stark-partisan-divisions-in-americans-views-of-socialism-capitalism/">have a positive view of socialism</a> than capitalism. And globally, 56% of respondents to a <a href="https://www.reuters.com/article/us-davos-meeting-trust/capitalism-seen-doing-more-harm-than-good-in-global-survey-idUSKBN1ZJ0CW">new survey agree</a> “capitalism as it exists today does more harm than good in the world.”</p>
<p>One problem interpreting numbers like these is that there are many definitions of capitalism and socialism. More to the point, people seem to be thinking of a specific form of capitalism that deems the sole purpose of companies is to increase stock prices and enrich investors. Known as shareholder capitalism, it’s been the <a href="https://prospect.org/article/when-shareholder-capitalism-came-town">guiding light of American business</a> for more than four decades. That’s what the survey meant by “as it exists today.”</p>
<p>As a <a href="https://www.umass.edu/spp/people/faculty/elizabeth-schmidt">scholar of socially responsible companies</a>, however, I cannot help but notice a <a href="https://ssrn.com/abstract=3406867">shift in corporate behavior in recent years</a>. A new kind of capitalism seems to be emerging, one in which companies value communities, the environment and workers just as much as profits. </p>
<p>The latest evidence: Companies as diverse as alcohol maker <a href="https://www.beveragedaily.com/Article/2020/01/09/AB-InBev-to-brew-all-beers-with-renewable-electricity-in-Europe">AB InBev</a>, airline <a href="https://www.businesswire.com/news/home/20200106005549/en/JetBlue-Prepares-Business-New-Climate-Reality">JetBlue</a> and money manager <a href="https://www.wsj.com/articles/blackrock-joins-worlds-largest-investor-group-on-climate-change-11578594349">BlackRock</a> have all in recent weeks made new commitments to pursue more sustainable business practices. </p>
<h2>The purpose of business</h2>
<p>Nearly 50 years ago, the economist <a href="https://graphics8.nytimes.com/packages/pdf/business/miltonfriedman1970.pdf">Milton Friedman</a> proclaimed that the sole purpose of a business is “to use its resources and engage in activities designed to increase its profits.”</p>
<p>Within a decade, Friedman’s claim <a href="http://rooseveltinstitute.org/wp-content/uploads/2018/06/The-Shareholder-Myth.pdf">became accepted wisdom</a> in corporate boardrooms. The era of “shareholder primacy capitalism” had begun.</p>
<p>One result has been <a href="https://forecast-chart.com/historical-sp-500.html">remarkable growth in the stock market</a>. But critics argue companies and the “shareholder value theory” <a href="https://hbr.org/2017/05/managing-for-the-long-term#the-error-at-the-heart-of-corporate-leadership">are also complicit</a> in exacerbating many <a href="https://www.washingtonpost.com/us-policy/2019/02/25/race-shareholder-profits-has-left-workers-dust-according-new-research/">economic</a>, <a href="https://www.theatlantic.com/business/archive/2012/04/how-investing-turns-nice-people-into-psychopaths/255426/">social</a> and <a href="https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change">environmental</a> problems, such as <a href="https://www.washingtonpost.com/posteverything/wp/2017/03/02/perspective-on-the-stock-market-rally-80-of-stock-value-held-by-top-10/">income inequality</a> and <a href="https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change">climate change</a>.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=804&fit=crop&dpr=1 600w, https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=804&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=804&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1010&fit=crop&dpr=1 754w, https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1010&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1010&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Milton Friedman won prizes for his research on consumption analysis and monetary history.</span>
<span class="attribution"><a class="source" href="https://en.wikipedia.org/wiki/Milton_Friedman#/media/File:Milton_Friedman_1976.jpg">Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>They also note that putting profits first actually <a href="https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?referer=http%253A%252F%252Fwww.bing.com%252Fsearch%253Fq%253Dlynn%2520stout%2520toxic&amp=&go=Search&amp=&qs=n&amp=&form=QBRE&amp=&sp=-1&amp=&pq=lynn+stout+toxic&amp=&sc=1-16&amp=&sk=&amp=&cvid=79A92B3E536049C493D0683540E953E5&amp=&httpsredir=1&amp=&article=1031&amp=&context=penn_law_review&amp=&sei-redir=1#search=%22lynn%20stout%20toxic%22">harms shareholders</a> in the long run by encouraging managers to take actions that may eventually reduce earnings.</p>
<h2>The rebellion</h2>
<p>Many consumers, workers and socially conscious investors have also noticed these shortcomings and increased pressure on corporations to change.</p>
<p>For starters, more Americans no longer find it acceptable for companies to exclusively seek profits. A <a href="http://www.conecomm.com/research-blog/2017-csr-study">2017 poll</a> found that 78% of U.S. consumers want businesses to pursue social justice issues, while 76% said they would refuse to buy a product if the business supported an issue contrary to their beliefs. Almost half the respondents said they had already boycotted a product for that reason.</p>
<p>Workers increasingly expect their employers to share their values. A <a href="https://sustainablebrands.com/read/organizational-change/3-4-of-millennials-would-take-a-pay-cut-to-work-for-a-socially-responsible-company">2016 study</a> found that most Americans – particularly millennials – consider a company’s social and environmental commitments when deciding where to work. Most would also be willing to take a pay cut in order to work for a “responsible” company – and are demanding their current employers behave that way.</p>
<p>For example, workers at online furniture company Wayfair <a href="https://www.forbes.com/sites/rakeenmabud/2019/07/12/two-lessons-from-the-wayfair-walkout/#71c1ddc33a88">recently walked out</a> when they learned it had sent beds to detention centers at the U.S.-Mexico border. More than 8,100 Amazon employees signed an open letter supporting a <a href="https://medium.com/@amazonemployeesclimatejustice/public-letter-to-jeff-bezos-and-the-amazon-board-of-directors-82a8405f5e38">shareholder resolution</a> urging the retailer to do more to address climate change. </p>
<p>Finally, investors are <a href="https://hbr.org/2019/05/the-investor-revolution">becoming more socially aware</a> and putting more of their money behind businesses that behave in sustainable and responsive ways. At the beginning of 2018, portfolio managers <a href="https://www.ussif.org/files/Trends/Trends%202018%20executive%20summary%20FINAL.pdf">held US$11.6 trillion</a> in U.S. assets using environmental, social and governance criteria to guide their investments, up from <a href="https://www.ussif.org/files/Publications/10_Trends_Exec_Summary.pdf">$2.5 trillion in 2010</a>. </p>
<p>Laurence Fink, founder and CEO of BlackRock, the <a href="https://www.bloomberg.com/news/articles/2019-06-13/blackrock-looks-to-five-megatrends-to-expand-etf-business">world’s largest asset manager</a>, <a href="https://www.blackrock.com/corporate/investor-relations/2018-larry-fink-ceo-letter">summed up the growing sentiment</a> when he said in 2018, “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”</p>
<h2>The corporate response</h2>
<p>Presumably realizing how important these constituencies are to their bottom lines, businesses are paying attention. </p>
<p><a href="https://www.brookings.edu/blog/future-development/2020/01/21/stakeholder-capitalism-arrives-at-davos/">Stakeholder capitalism</a> is this year’s theme at Davos, the global gathering of the world’s elite in the Alps. And last year, the leaders at some of the world’s largest companies said that <a href="https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans">they are ditching</a> shareholder-first capitalism and instead embracing a corporate purpose that seeks to serve all constituents. The sentiment is hardly isolated. </p>
<p>Dick’s Sporting Goods, Kroger, Walmart and L.L. Bean, for example, responded to growing concerns over mass shootings by <a href="https://www.triplepundit.com/story/2019/parkland-year-2-gun-safety-and-business-response-gun-violence/82451/">restricting the sale of guns</a>. Procter and Gamble, a major sponsor for U.S. Soccer, expressed support for the quest of the <a href="https://www.tmz.com/2019/07/14/procter-and-gamble-donate-us-womens-national-soccer-team-equal-pay/">women’s team</a> for equal pay and donated $500,000 to help narrow the pay gap with men. </p>
<p>Airlines including American, United and Frontier <a href="https://www.nytimes.com/2018/06/20/us/airlines-transport-immigrant-children.html">refused to knowingly fly children</a> separated from their parents at the border following outrage over the Trump administration’s policy. And even though Amazon shareholders rejected the worker-supported shareholder resolution described above, <a href="https://www.ecowatch.com/amazon-climate-change-resolution-2637862790.html?rebelltitem=3#rebelltitem3">Amazon set stronger goals</a> for reducing its carbon footprint after the resolution was introduced.</p>
<p>These actions have sometimes hurt the bottom line. The decision to restrict gun sales cost Dick’s Sporting Goods <a href="https://www.bloomberg.com/news/articles/2019-03-29/dick-s-dks-ceo-ed-stack-says-gun-shift-cut-sales-by-150m">$150 million</a>. Delta <a href="https://www.marketwatch.com/story/georgia-lawmakers-kill-jet-fuel-tax-break-after-delta-drops-nra-discount-2018-03-01">lost a $50 million tax break</a> in Georgia after severing ties with the NRA. </p>
<p>But these and <a href="https://www.dailysignal.com/2018/08/30/how-louisiana-stood-up-to-the-anti-gun-corporate-elite/">other companies</a> didn’t back down. The CEO of Dick’s Sporting Goods <a href="https://tennesseestar.com/2019/03/30/dicks-sporting-goods-lost-millions-over-anti-gun-policies/">explained</a> that when something is “to the detriment of the public, you have to stand up.”</p>
<p>Companies are also setting tougher social and environmental goals for themselves and then reporting their successes and failures. Tesla, Unilever, Nike and Whole Foods are among nine companies with annual revenues of at least $1 billion that “<a href="https://www.theguardian.com/sustainable-business/2016/jan/02/billion-dollar-companies-sustainability-green-giants-tesla-chipotle-ikea-nike-toyota-whole-foods">have sustainability or social good at their core</a>.” </p>
<p>In 2018, <a href="https://www.ga-institute.com/press-releases/article/flash-report-86-of-sp-500-indexR-companies-publish-sustainability-responsibility-reports-in-20.html">86% of Standard & Poor’s 500 companies</a> reported on their environmental, social and governance performance and achievements, up from less than 20% in 2011. </p>
<p>And companies have found that putting more emphasis on social justice can pay off. Unilever, for example, said in 2017 that its “<a href="https://www.marketingweek.com/unilever-sustainable-brands-growth/">sustainable living” brands</a>, such as Ben & Jerry’s, Dove and Hellmann’s, are growing much faster than its other brands. Companies with the best scores on their sustainability reports <a href="https://www.forbes.com/sites/terrywaghorn/2017/12/04/sustainable-reporting-lessons-from-the-fortune-500/#7a4d9f756564">generally perform better financially</a> than those with lower scores. </p>
<h2>The end of shareholder capitalism?</h2>
<p>Skeptics can be forgiven for believing these corporate “changes” are not real or are simply public relations stunts designed to appeal to a new generation.</p>
<p>Businesses can, of course, say they will be responsible citizens while doing the opposite. Few sustainability reports in the United States are <a href="https://www.cpajournal.com/2017/07/26/current-state-assurance-sustainability-reports/">externally audited</a>, and the companies are asking us to take them at their word.</p>
<p>Even if they are well-meaning, intentions are not enough to create systemic change. A 2017 study showed that many companies with climate change goals actually <a href="https://hbr.org/2017/11/how-bold-corporate-climate-change-goals-deteriorate-over-time">scaled back their ambitions over time</a> as the reality clashed with their lofty goals.</p>
<p>But businesses can’t afford to ignore their customers’ wishes. Nor can they ignore their workers in a tight labor market. And if they disregard socially responsible investors, they risk both <a href="https://hbr.org/2019/05/the-investor-revolution">losing out on important investments</a> and facing <a href="https://www.porticobenefits.org/Overview/ReponsibleInvesting/InvestingForSocialImpact/ClimateChangeResolutions">shareholder resolutions</a> that force change.</p>
<p>The shareholder value doctrine is not dead, but we are beginning to see major cracks in its armor. And as long as investors, customers and employees continue to push for more responsible behavior, you should expect to see those cracks grow. </p>
<p><em>This is an updated version of an <a href="https://theconversation.com/investors-consumers-and-workers-are-changing-capitalism-for-the-better-by-demanding-companies-behave-more-responsibly-119281">article originally published</a> on July 24, 2019.</em></p>
<p>[ <em>Like what you’ve read? Want more?</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=likethis">Sign up for The Conversation’s daily newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/130427/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Elizabeth Schmidt does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As capitalism’s image crumbles, many of the world’s biggest companies are trying to give it new life by showing it can mean more than just making money.Elizabeth Schmidt, Professor of Practice, Nonprofit Organizations; Social & Environmental Enterprises, UMass AmherstLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1113032019-02-19T22:10:32Z2019-02-19T22:10:32ZClimate action helps companies build reputations and attract investors<figure><img src="https://images.theconversation.com/files/259359/original/file-20190216-56208-w0vexd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Investors are starting to demand businesses take action on climate change. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/new-york-city-usa-october-30-1065011192">(Shutterstock)</a></span></figcaption></figure><p>This year, climate change topped off the agenda at the annual meeting of the World Economic Forum in Davos, Switzerland — where every January, global leaders and the heads of the world’s largest companies gather to find ways to improve the state of the world. When surveyed, <a href="https://www.reuters.com/article/us-davos-meeting-climatechange/failure-to-curb-climate-change-a-top-risk-davos-survey-idUSKCN1PA13J">experts from government, business, academia and non-governmental organizations said the failure to respond to climate change is a key risk</a>. </p>
<p>Companies committed to tackle climate change are addressing their greenhouse gas emissions (GHGs) via <a href="https://sciencebasedtargets.org/what-is-a-science-based-target/">science-based targets</a>. These voluntary goals are compatible with the global push towards a low-carbon economy that aims to keep the global temperature increase to less than 2°C.</p>
<p>One program that is gaining traction globally is the <a href="https://sciencebasedtargets.org/">Science Based Targets initiative</a> (SBTi), a collaboration between <a href="https://www.cdp.net/en">CDP, a not-for-profit charity</a>, the <a href="https://www.unglobalcompact.org/">UN Global Compact</a>, the <a href="https://www.wri.org/">World Resources Institute</a> and the <a href="https://climatesavers.org/">World Wildlife Fund</a>. This program creates a global community where companies can set targets that align with the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement">Paris Agreement</a>. </p>
<p>Joining a global community like SBTi not only provides a formal framework for measurement and tracking goals, it also signals <a href="https://www.forbes.com/sites/mikescott/2018/07/10/the-worlds-biggest-companies-are-set-to-decarbonize-their-products/#75b8577038f1">a company’s commitment to climate change action</a>. As of early 2019, <a href="https://sciencebasedtargets.org/companies-taking-action/">525 companies</a> have signed on, including 169 with approved targets.</p>
<h2>Big companies at the forefront</h2>
<p>IKEA, Unilever, Tesco, General Mills, L’Oreal, Walmart and McDonald’s are among the large multinational corporations that have signed on to the SBTi. </p>
<p><a href="https://www.ikea.com/us/en/about_ikea/newsitem/061318-IKEA-Group-climate-positive-2030">IKEA Group</a>, for example, has committed to an 80 per cent reduction in GHG emissions in stores and other operations and a 50 per cent reduction in emissions from travel and customer deliveries by 2030, compared to 2016 levels. It will also cut emissions in its value chain by at least 15 per cent, resulting in a 70 per cent reduction in the climate footprint of an <a href="https://www.prnewswire.com/news-releases/ikea-group-commits-to-zero-emissions-targets-for-home-delivery-in-five-major-cities-by-2020-300712424.html">average IKEA product</a>.</p>
<p>Large companies can make change within their own operations and along the supply chain. <a href="https://www.newswire.ca/news-releases/mcdonalds-becomes-the-first-restaurant-company-to-set-approved-science-based-target-to-reduce-greenhouse-gas-emissions-677353923.html">McDonald’s</a> plans to reduce its emissions intensity across its supply chain by 31 per cent by 2030 (baseline 2015) by targeting energy use and packaging waste in restaurants, and streamlining its beef production, which make up more <a href="https://sciencebasedtargets.org/2018/03/20/mcdonalds-has-pledged-to-slash-greenhouse-gas-emissions-its-charting-a-course-for-sustainable-growth/">60 per cent of emissions</a>.</p>
<p>Similarly, General Mills, the packaged food company (Cheerios, Yoplait and Green Giant) set a science-based target to cut its GHG emissions by 28 per cent by 2025 (from a 2010 baseline) across its entire value chain, from <a href="http://www.csrwire.com/press_releases/38222-General-Mills-Announces-New-Commitment-on-Climate-Change">farm to table to landfill</a>. It plans to do this by <a href="https://www.generalmills.com/en/News/Issues/climate-policy">getting its farmers to adopt sustainable practices that reduce emissions and protect at risk water sources</a>, for example. </p>
<p>Companies participate in global sustainability initiatives and set external goals because of their sustainability mindset, <a href="https://www.theguardian.com/sustainable-business/three-reasons-investors-consider-sustainability">strategic gains, external competitive or reputational risk pressures</a> and <a href="https://www.wri.org/our-work/project/mind-science-mind-gap-aligning-corporate-ghg-emissions-reduction-targets-climate-0">recognition of an inexorable shift to a low-carbon economy</a>. </p>
<p>While participation in the SBTi is voluntary, the results are reported publicly. Even though there are few tangible sanctions for non-performance, the absence of achievement or reporting can harm a company’s reputation.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Former U.S. Vice-President Al Gore speaks during the ‘Safeguarding the planet’ session at the annual meeting of the World Economic Forum in Davos, Switzerland, in January 2019.</span>
<span class="attribution"><span class="source">(AP Photo/Markus Schreiber)</span></span>
</figcaption>
</figure>
<p>In Canada, only nine companies have joined the SBTi, and all but one remain at the commitment-setting stage. <a href="https://www.cn.ca/-/media/Files/Delivering-Responsibly/Environment/CDP-2017-en.pdf">Canadian National Railway</a> has promised to reduce its emissions intensity by 29 per cent by 2030, based on a 2015 baseline. </p>
<p>There are several reasons for the low participation in SBTi among Canadian companies. <a href="https://www.cpacanada.ca/en/news/world/2018-12-07-climate-change-and-business">The Chartered Professional Accountants of Canada</a> argues that more than 99 per cent of businesses in Canada are small businesses, with fewer resources, employees and pressures.</p>
<h2>Key benefits</h2>
<p>SBTi and the participating companies, however, see a number of benefits from setting targets. They also provide companies with long-term goals that will be resistant to changes in management and shifts in business priorities.</p>
<p>A major European electric company, EDP, found <a href="https://www.huffingtonpost.com/entry/utility-edp-key-benefits-from-setting-a-science-based_us_595e0944e4b0cf3c8e8d5671">strategic benefits</a> in laying plans to decarbonize — it builds reputation, improves visibility and helps it benefit from innovation, and had a favourable response from investors, employees and customers. </p>
<p><a href="https://www.walmartsustainabilityhub.com/project-gigaton/emissions-targets">Walmart</a> says it is part of their sustainability journey to encourage others to look at emissions as a form of waste with financial value or inefficiency in the value chain. <a href="https://news.walmart.com/2017/04/19/walmart-launches-project-gigaton-to-reduce-emissions-in-companys-supply-chain">In 2017, it launched Project Gigaton</a> to encourage suppliers to eliminate one billion tonnes of GHG emissions from their operations and supply chains by 2030 by targeting one of six pillars: energy, waste, packaging, agriculture, forests or product use. Suppliers achieving goals and communicating performance publicly are recognized as “<a href="https://www.walmartsustainabilityhub.com/supplier-recognition">Giga-Gurus</a>.”</p>
<p><a href="https://www.unilever.com/news/news-and-features/Feature-article/2018/what-are-science-based-targets-and-why-do-we-use-them.html">Unilever</a> looks at science-based targets to boost its competitive advantage in the shift towards a low-carbon economy and to hedge against regulator pressures and the costs related to carbon pricing. In 2017, <a href="https://www.unilever.com/sustainable-living/reducing-environmental-impact/greenhouse-gases/">Unilever</a> reduced energy-related emissions by 47 per cent per tonne of production from 2008 levels, and shifted towards renewable energy in manufacturing. The company also identified a nine per cent increase in GHG emissions from its consumer products since 2010, largely due to the consumers’ <a href="https://www.unilever.com/sustainable-living/reducing-environmental-impact/greenhouse-gases/">hot showers</a> when using their products. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-divesting-of-fossil-fuels-could-help-save-the-planet-88147">How divesting of fossil fuels could help save the planet</a>
</strong>
</em>
</p>
<hr>
<p>The food and beverage sector — considered a <a href="https://www.globalpolicyjournal.com/blog/05/02/2019/will-science-based-targets-save-us-insights-global-food-industry">significant driver of global climate change</a> and the one with the <a href="https://oxfamilibrary.openrepository.com/bitstream/handle/10546/610563/tb-science-based-targets-carbon-emmissions-250516-en.pdf">most at risk from climate change</a> — has been an early adopter of science-based targets. Fifty-nine businesses, including Ben & Jerry’s and PepsiCo, have either set targets or are at the commitment stage. </p>
<p>Other global initiatives to encourage businesses to develop responsible practices and meet climate goals are also on the rise. For example, <a href="https://www.unpri.org/pri/about-the-pri">Principles for Responsible Investment</a> has attracted 2,232 investors who believe in an “economically efficient, sustainable global financial system” and who agree to incorporate environmental, sustainability and governance issues into their investment practice. </p>
<p><a href="https://www.newswire.ca/news-releases/majority-of-canadians-support-more-action-on-climate-change-615563183.html">Eighty-seven per cent of Canadians</a> believe businesses must make a stronger commitment to climate change action. Youth, in particular, are demanding more commitment, and future consumers such as Greta Thunberg are <a href="https://www.theguardian.com/environment/2019/feb/15/the-beginning-of-great-change-greta-thunberg-hails-school-climate-strikes">taking to the world stage and inspiring other students</a> to raise their voices.</p>
<p>It is unlikely that one company or one nation will make a significant impact on reducing emission levels, however, climate change can have significant impact on business.</p><img src="https://counter.theconversation.com/content/111303/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rumina Dhalla does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Business leaders are beginning to take the global climate issue seriously by setting science-based targets to reduce greenhouse gas emissions.Rumina Dhalla, Associate Professor, Organizational Studies and Sustainable Commerce, CSR/Sustainability Coordinator and MBA Graduate Coordinator, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1105782019-01-27T10:40:28Z2019-01-27T10:40:28ZSouth African diplomacy on Zimbabwe can remain quiet – but it must get tough<figure><img src="https://images.theconversation.com/files/255709/original/file-20190127-108358-1bp97vx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africa's President Cyril Rampahosa, right, must get tough on his Zimbabwean counterpart Emmerson Mnangagwa.</span> <span class="attribution"><span class="source">GovernmentZA/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>Cries of moral outrage have greeted the <a href="https://theconversation.com/what-needs-to-be-done-to-stop-zimbabwes-violent-meltdown-110193">brutal crackdown</a> by the Zimbabwean security forces on nationwide protests sparked by a sudden, massive, government-ordained <a href="https://ewn.co.za/2019/01/13/anger-as-mnangagwa-raises-fuel-prices-in-zimbabwe">hike in the price of fuel</a>. Naturally enough, the demand is that “something must be done” to stop the brutality. Twelve people have <a href="https://worldjusticenews.com/news/2019/01/20/twelve-dead-as-zimbabwe-crackdown-continues/">already died</a>, hundreds have been injured and there have been <a href="https://www.zimbabwesituation.com/news/zimbabwe-crackdown-children-shackled-and-caged-in-security-round-up/?PageSpeed=noscript">mass round ups</a>. </p>
<p>In South Africa, demands that President Cyril Ramaphosa’s government should take <a href="https://www.news24.com/Columnists/GuestColumn/why-south-africa-must-intervene-in-zimbabwe-20190124">firm action</a> are fuelled by two factors. The presence of a large Zimbabwean <a href="https://www.news24.com/SouthAfrica/News/millions-of-zimbabweans-living-in-sa-must-help-resolve-conflict-back-home-anc-20190122">migrant community</a> within the country is one. The second is a widespread sense that Pretoria’s policy towards its errant neighbour has always been one of light wrist-tapping rather than a vigorous twisting of arms. </p>
<p>Inter-liberation movement solidarity is widely said to have strangled serious South African criticisms of Zimbabwean governments. This “quiet diplomacy” has been <a href="https://www.timeslive.co.za/politics/2017-11-15-south-africas-quiet-diplomacy-towards-zimbabwe-must-end-maimane/">regularly dismissed</a> as a strategy of doing nothing. If South Africa got serious, say the critics, President Emmerson Mnangagwa’s regime would have to comply with its demands. Democracy in Zimbabwe could be given a real chance. </p>
<p>Many South Africans are concerned by the position Ramaphosa has taken towards the present crisis. South Africa is <a href="https://www.reuters.com/article/us-zimbabwe-politics-safrica/south-africa-turned-down-zimbabwe-request-for-12-billion-loan-in-december-idUSKCN1PF0IG">reported</a> to have turned down a request from Zimbabwe for a loan of US$1.2 billion to ease its desperate foreign currency shortage. Yet Ramaphosa was vocal at the recent meeting of global leaders at the World Economic Forum in Davos in calling for <a href="https://www.news24.com/Africa/Zimbabwe/ramaphosa-says-lift-zimbabwe-sanction-20190122">an end to sanctions</a>. He argued that these were damaging Zimbabwe’s prospects of economic recovery. </p>
<p>Ramaphosa’s call for an end to sanctions clearly reflects his government’s view that it cannot afford a collapse of the Zimbabwean economy. Zimbabwe remains a <a href="http://www.engineeringnews.co.za/article/early-days-but-some-sa-firms-responding-to-zimbabwes-open-for-business-pledge-2018-03-23">site</a> for South African investment and a <a href="https://tradingeconomics.com/south-africa/exports/zimbabwe">significant market</a> for South African goods. This is despite the huge difficulties South African firms have in getting profits out of Zimbabwe .</p>
<p>Meanwhile, best estimates suggest that South Africa already hosts up to <a href="https://africacheck.org/reports/how-many-zimbabweans-live-in-south-africa-the-numbers-are-unreliable/">two million Zimbabweans</a>, though the exact number isn’t known. Any further decline of an already shattered Zimbabwean economy could send many more Zimbabwean migrants across the border, adding to the already <a href="https://tradingeconomics.com/south-africa/unemployment-rate">huge pool of unemployed</a> in South Africa. </p>
<p>There are thus very real reasons for the South African position, even if the motivation is self-interested. Yet would it help the cause of Zimbabwean democracy and human rights if the European Union and US were to now bring “sanctions” to an end? </p>
<p>In reality, the answer is extraordinarily complicated.</p>
<h2>The thorny subject of sanctions</h2>
<p>Successive Zimbabwean governments have long been dismissive of efforts from outside the country to effect political change. President Robert Mugabe <a href="https://mg.co.za/article/2008-07-16-mugabe-lashes-out-at-uk-as-inflation-soars">routinely insisted </a>that sanctions and other policies designed to isolate Zimbabwe were intended to bring about “regime change”. </p>
<p>These interventions included the round of sanctions first <a href="https://www.theguardian.com/world/2002/feb/18/zimbabwe">imposed by the European Union in 2002</a> and <a href="https://www.congress.gov/107/plaws/publ99/PLAW-107publ99.pdf">the passage</a> by the US government of the Zimbabwe Democracy and Economic Recovery Act in 2001. The act encouraged the president to implement travel bans and financial restrictions against people conducting political violence.</p>
<p>The Zimbabwean African National Union-Patriotic Front (ZANU-PF) has equally consistently claimed that the collapse of the Zimbabwean economy is a result of the imposition of sanctions. Recently Mnangagwa <a href="https://www.news24.com/Africa/Zimbabwe/remove-illegal-sanctions-against-zimbabwe-mnangagwa-pleads-with-the-west-20180929">claimed</a> that the sanctions, which are still in place, are “illegal”.</p>
<p>Setting aside the Zimbabwe government’s reaction – which is to be expected – do sanctions work, which ones work and what conditions are necessary to make them work? </p>
<p>There is enormous controversy, politically and academically, around the issues. Furthermore, what impact do sanctions have, how do you measure this, and does impact measure up to the objectives notionally to be achieved? </p>
<p>In the Zimbabwean case, the US and EU insist that the measures they have taken are “targeted sanctions”. These are designed to hurt individuals identified as members of the repressive ZANU-PF regime rather than the ordinary people of Zimbabwe. For instance, the US Zimbabwe law led <a href="https://www.voanews.com/a/us-reforms-first-then-removal-of-zimbabwe-sanctions/4572810.html">to the imposition of travel bans</a> and financial restrictions on members of the ZANU-PF regime. </p>
<p>Yet reliable data on how effective such measures have been is lacking. Critics would argue that the present crackdown on protests demonstrates their manifest failure. There may well be a case for arguing that the imposition of targeted sanctions by both the US and EU are designed to demonstrate to domestic audiences that “they are doing something” as much as to bring about improved governance. </p>
<p>Yet does this mean they should be abandoned?</p>
<h2>The case for keeping up the pressure</h2>
<p>Immediate cancellation of such sanctions would clearly send out an extraordinarily dispiriting message to Zimbabweans who are on the receiving end of regime violence. </p>
<p>There is also a message here for the Ramaphosa government, and for other member governments of the southern African region.</p>
<p>By all means keep the borders with Zimbabwe open, the traffic flowing, and economic exchanges continuing. At the same time, there’s an urgent need to get serious with the Mnangagwa government. The time for diplomatic niceties is long past. South Africa needs to make life as uncomfortable as possible for members of the regime by adopting practical and measurable strategies: stop their travel to and through South Africa, freeze their bank accounts, stop them sending their children to private schools and South Africa’s top universities. </p>
<p>It may well be that if South Africa is to effect change for the better in Zimbabwe its diplomacy must remain “quiet”. If so, it must also be tough.</p><img src="https://counter.theconversation.com/content/110578/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Roger Southall has received funding from the National Research Foundation.. </span></em></p>South Africa needs to make life as uncomfortable as possible for members of Zimbabwe’s government.Roger Southall, Professor of Sociology, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1105252019-01-25T14:28:08Z2019-01-25T14:28:08ZDavos: why measures of economic progress must consider the quality of work on offer<figure><img src="https://images.theconversation.com/files/255573/original/file-20190125-108345-17btqy1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/blurred-motion-shot-warehouse-worker-wearing-682632361?src=IexQJOrYtZ81XeB_t-A6bw-1-8">Shutterstock</a></span></figcaption></figure><p>Davos offers a place for the rich and not-so-famous to meet and exchange views on the <a href="https://theconversation.com/davos-leaders-talk-about-globalisation-as-though-its-inevitable-when-it-isnt-110216">present and future of capitalism</a>. As in previous years, the theme of automation and the “fourth industrial revolution” has been a core of the 2019 meeting. The concern is over how technology might help to raise economic growth and add to prosperity. </p>
<p>Lip service, of course, is paid to wider social and ethical goals, but in truth the central concern is with the needs of the global economy. The worship of growth (measured by GDP) dominates proceedings. </p>
<p>But this focus diverts attention from what are pressing problems in society. In particular, it misses the costs of work. Far from the ski slopes of Davos are real people struggling in dull jobs and on stagnant incomes. Any consideration of how technology will destroy or create jobs needs to recognise that the quality of the work we do is also important. </p>
<p>The fourth industrial revolution includes the rise of artificial intelligence, 3D printers and driverless cars. While many fear the disappearance of jobs due to digital automation, debate at Davos recognises the capacity for technology to create new jobs. It will present new sources of demand and new work opportunities such as engineers to design and service the new digital architecture. </p>
<p>Yet, the prospect of jobs growth is itself a problem if it means workers working in more low quality jobs. If technology erodes the skill content of work, drives down wages, and raises the duration and intensity of work, then workers may face the prospect of having to undertake work that is much worse than now. </p>
<h2>Work realities</h2>
<p>The rise of the so-called <a href="https://theconversation.com/the-rise-of-the-low-pay-workforce-when-seven-jobs-just-isnt-enough-106979">“gig economy”</a> shows the darker side of technological innovation. Advanced economies have seen a steady decline in skilled manufacturing jobs and the growth of low-skilled zero-hours contracts jobs in their place. Meanwhile, the output of large corporations <a href="http://www.pewresearch.org/fact-tank/2017/07/25/most-americans-unaware-that-as-u-s-manufacturing-jobs-have-disappeared-output-has-grown/">continues to grow</a>, showing how technology can be harnessed for profit-making, at the expense of the <a href="https://www.theguardian.com/commentisfree/2018/feb/21/uk-employment-workers-philip-hammond-gig-economy">welfare of workers</a>.</p>
<p>The hard realities of work in modern society speak to the limits of visions of progressive change via automation. They highlight, in particular, how technology may add to the problems of work, while sustaining people in work. </p>
<p>The focus on economic growth, as measured by GDP, does not help here. Consider an economy where GDP is rising. Growth may be fuelled by rising employment, higher work force participation, and/or longer work hours. But this fails to consider the costs of the work involved. The fact that GDP may depend on a substantial number of workers being exposed to toxic conditions at work is obscured. And the process of generating GDP growth often has an environmental impact, including <a href="https://www.weforum.org/agenda/2016/04/gdp-ignores-the-things-that-matter-like-climate-change/">more pollution and waste</a>. </p>
<h2>Automation as distraction</h2>
<p>At Davos and other forums, it is convenient for big business to focus on the topic of automation. It creates, on the one hand, a sense of fear about the future of work. This fear is useful for capital owners because it helps to suppress wages and reduce demands for better work, as people become just so grateful to have a job at all.</p>
<p>The focus on automation, on the other hand, helps to win support for the status quo. Capitalism, so the story goes, is not to blame for the ills of work, but rather these ills stem from the seemingly natural processes of technological change. Technology, in this way, becomes a useful mechanism to hide the specific injustices of work linked to existing corporate structures and practices. </p>
<p>Davos promotes the fourth industrial revolution slogan, in part because it reflects the interests of the class that it represents. </p>
<p>In our society, technology does not guarantee – as it should – more leisure time and more meaningful work; rather it offers more work and, for many, greater drudgery. Paradoxically, the prospect is of work continuing, while technology advances. </p>
<p>The reason for this paradox relates at an essential level to unequal power. It reflects who owns and controls technology – how powerful capital owners can use it in the service of profit generation. The discussion at Davos about technological change remains closed to voices demanding real change. Yet it is only by reimagining technology – its ownership and control – that we can create a better automated future.</p>
<p>Meanwhile, concerns about sustaining economic prosperity must incorporate measures of the quality of work available to people. Beyond growth, we need to embrace measures of progress that capture how well work fits us as human beings. Some useful attempts to define the quality of work <a href="https://www.cipd.co.uk/Images/understanding-and-measuring-job-quality-2_tcm18-36524.pdf">exist</a>. The challenge is to use these in conjunction with other measures such as GDP to come up with broader indicators of economic and social progress. That way, we might realise ways of working and living that are to the benefit of all.</p><img src="https://counter.theconversation.com/content/110525/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Spencer has previously received funding from ESRC, EPSRC, and FP7</span></em></p>An obsession with GDP growth fails to account for some of society’s most pressing problems.David Spencer, Professor of Economics and Political Economy, University of LeedsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1105302019-01-25T13:24:31Z2019-01-25T13:24:31ZImagining a Davos for the many that was actually serious about climate change<p>From the moment world leaders claiming to want to fight climate change arrived in private jets, the 2019 World Economic Forum in Davos attracted controversy. With global inequality growing and the threat of environmental destruction looming ever larger, the jets are getting <a href="https://www.fastcompany.com/90295752/what-climate-change-davos-bigwigs-slammed-for-taking-private-jets">larger and more expensive</a>. The <a href="https://www.aircharterserviceusa.com/about-us/news-features/news/1500-private-jets-predicted-to-descend-on-davos-this-week">director of one private charter company</a> says surging demand for his planes is partly down to “business rivals not wanting to be seen to be outdone by one another”.</p>
<p>This contradiction between rhetoric and action goes far beyond the use of private aircraft. It reveals the broader problems of allowing billionaires to not only control a disproportionate amount of the world’s wealth but also shape its political and economic agenda. While recognising the need for change, their solutions will almost always lead to a defence of the status quo from which they profit so handsomely.</p>
<p>Davos is just the tip of the iceberg of the more pervasive problem of “<a href="https://www.theguardian.com/news/2018/may/24/the-trouble-with-charitable-billionaires-philanthrocapitalism">charitable billionaires</a>”. On the surface, it would appear that having “the 1%” direct their wealth toward worthy causes is both laudatory and necessary. But such philanthrocapitalism promotes market-friendly policies and devalues the ability of democratic governments to provide social welfare or meet the needs of their citizens. As one critic <a href="https://www.jacobinmag.com/2018/02/charity-philanthropy-howard-buffett-congo">noted</a>: </p>
<blockquote>
<p>the problems capitalist philanthropists claim to be solving are rooted in the same economic system that allows them to generate such enormous wealth in the first place.</p>
</blockquote>
<p>An obvious answer may then be to simply dismiss the World Economic Forum and Davos altogether. Stopgap solutions such as seeking to address economic insecurity through employee “mindfulness and <a href="https://www.washingtonpost.com/posteverything/wp/2015/01/26/the-dark-underbelly-of-the-davos-well-being-agenda/?utm_term=.489eafc91d3e">well-being</a>” could be mocked, at best. </p>
<h2>An alternative and sustainable Davos?</h2>
<p>However, the ethos of Davos still has much to offer. It represents an effort to bring together global leaders and influencers to address problems that go beyond national borders. If anything, it would appear that we need more of these trans-national spaces for discussing technological innovation and social transformation.</p>
<p>For Davos to truly be effective though, it must stop serving as a space for elites to defend their status and power. It must no longer be a forum, for instance, for CEOs like Tim Cook of Apple to <a href="https://www.ft.com/content/46be5d76-1efa-11e9-b126-46fc3ad87c65">defend</a> his company and his executive allies from the legitimate “big tech backlash”. Rather, it should be an opportunity to force billionaires to invest in ambitious progressive solutions for solving the very problems they are primarily responsible for causing.</p>
<p>Climate change is a crucial place to start. At the moment, the most that pro-environmental voices such as New Zealand PM Jacinda Ardern can do is <a href="https://www.theguardian.com/business/live/2019/jan/22/davos-2019-financial-risks-climate-dangers-bolsonaro-attenborough-prince-william-arden-live?page=with:block-5c474839e4b00173154a9368#block-5c474839e4b00173154a9368">plead with elites</a> to “get on the right side of history and embrace ‘guardianship’ of the earth”. Alternatively, Davos could be used to promote a more ambitious green agenda and directly challenge the power of the billionaire class and the politicians who continue to prop them up.</p>
<p>Leading up to Davos, US congresswoman Alexandria Ocasio-Cortez made headlines by calling for a “Green New Deal”. It <a href="https://www.vox.com/energy-and-environment/2018/12/21/18144138/green-new-deal-alexandria-ocasio-cortez">proposes</a> to have the US become a global leader in “decarbonising” its economy within ten years. Further, it will achieve these aims through massive public investment, a federal jobs guarantee, and a dramatic increase in the taxing of high income. The growing public support for this plan has also been a platform for progressive lawmakers to question the huge US <a href="https://www.vox.com/policy-and-politics/2019/1/7/18171927/alexandria-ocasio-cortez-60-minutes-trump-racist">military budget and tax cuts</a>. Why, they ask, are war and wealth being prioritised over the housing, healthcare or the environment?</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1080269371921088514"}"></div></p>
<p>This is a good beginning. Yet it would benefit from having the support of global movements and the capital of global elites. In an alternative world, Davos could be just such a venue for an international commitment to innovation and progressive change. Rather than just having countries fight to tax their richest citizens and corporations, they could also mandate that they have to invest a percentage of their profits in the ideas and agenda proposed by leading experts and activists around the world every year. In this case, it would be for helping to fund countries and communities to put in place a “green new deal”.</p>
<p>The roots of such an alternative are already growing in events like the “<a href="https://wsf2018.org/en/english-world-social-forum-2018/">World Social Forum</a>” which is an attempt to bring together community and political leaders with leading thinkers to imagine a different “world” to the corporate-friendly one supported by the World Economic Forum. Critically, it advocates “glocal” solutions, customised to local conditions. Davos, in this regard, could be a yearly corrective where those most affected by elite policies could put forward the specific solutions for them to rectify it.</p>
<p>For this to happen it would mean transforming the very ethos of Davos from one of “idea sharing” to that of democratic accountability and justice. It entails delinking social value and influence from economic wealth and the political influence it buys. Instead, Davos could be an annual opportunity for experts and “the people” to propose the best and most cutting edge ideas for redistributing this wealth to where it is truly needed and can do the most good. Scientists <a href="https://www.theguardian.com/environment/2018/oct/08/global-warming-must-not-exceed-15c-warns-landmark-un-report">warn</a> that we have only 12 years potentially left to avert a “climate change catastrophe”. It is why we need to create an alternative Davos “for the many, not the few” as soon as possible.</p><img src="https://counter.theconversation.com/content/110530/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Bloom does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The World Economic Forum in Davos must change its ethos from ‘idea sharing’ to one of democratic accountability and justice.Peter Bloom, Senior Lecturer in Organisation Studies, Department of People and Organisation, The Open UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1104112019-01-25T11:53:06Z2019-01-25T11:53:06ZWhy the Davos elites are still relevant<figure><img src="https://images.theconversation.com/files/255501/original/file-20190124-196244-1n8y7qo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A police officer stands guard over the global elites who decided to make the trek to Davos this year.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Switzerland-Davos-Forum/8413fe4b50ce4c9bac5aa27b1abc7335/19/0">AP Photo/Markus Schreiber</a></span></figcaption></figure><p>Has Davos lost its mojo?</p>
<p>After U.S. President Donald Trump, U.K. Prime Minister Theresa May and other world leaders <a href="https://www.ft.com/content/27926bca-1d99-11e9-b2f7-97e4dbd3580d">nixed plans to attend</a> the World Economic Forum annual meeting in Switzerland, some began to claim “<a href="https://www.washingtonpost.com/news/powerpost/paloma/daily-202/2019/01/22/daily-202-davos-is-in-decline-as-elites-fail-to-tackle-the-globe-s-biggest-problems/5c469bf11b326b29c3778c5c/?utm_term=.64987c0e12b4">Davos is in decline</a>.”</p>
<p>I take the opposite view. <a href="https://www.huffingtonpost.com/christopher-michaelson-phd/davos-2012_b_1245312.html">Having been there</a> in the past as part of a participant’s supporting staff – condescendingly referred to by <a href="https://www.weforum.org/agenda/2019/01/fewer-private-jets-in-davos-2019/">status-conscious attendees</a> <a href="https://www.weforum.org/agenda/2016/09/what-you-need-to-know-about-the-g20/">as a “sherpa”</a> – I have seen up close how much can be accomplished by a handful of people sitting in a room and talking. </p>
<p>As a <a href="https://www.stthomas.edu/hollorancenter/about/leadership/christopher-michaelson.html">philosopher and business ethicist</a>, I believe it’s worth remembering some of the history that’s been made in that rarefied Alpine air and why Davos still matters today. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=472&fit=crop&dpr=1 600w, https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=472&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=472&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=593&fit=crop&dpr=1 754w, https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=593&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=593&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Yasser Arafat and Shimon Peres shake hands at Davos in 2001, their second meeting at the forum.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Associated-Press-International-News-Switzerland-/350fc46403e5da11af9f0014c2589dfb/19/0">AP Photo/Michel Euler</a></span>
</figcaption>
</figure>
<p>The stated aim of the World Economic Forum – which we commonly refer to by the name of the ski resort in the Swiss Alps where it is held – is “<a href="https://www.weforum.org/our-impact">improving the state of the world</a>.”</p>
<p>It does this by promoting <a href="http://www3.weforum.org/docs/WEF_AM19_Meeting_Overview.pdf">global collaboration</a>, <a href="https://www.foreignaffairs.com/articles/2008-01-01/global-corporate-citizenship">capitalism that includes many stakeholders</a> and <a href="https://www.weforum.org/about/world-economic-forum">public-private cooperation</a>.</p>
<p>Numerous international agreements and breakthroughs have emerged from Davos. Examples include <a href="http://www.bbc.com/news/business-35285852">preventing war</a> between Turkey and Greece in the 1980s and <a href="http://www.nytimes.com/2012/01/29/business/global/in-davos-europe-is-pressed-for-debt-crisis-solution.html">helping resolve the eurozone’s debt crisis</a> in 2012 – the year I was last there. It brought together world leaders as oppositional as South Africa’s <a href="https://www.flickr.com/photos/15237218@N00/963931930/">Nelson Mandela and F.W. de Klerk</a> in 1992 and <a href="http://www.dailyherald.com/storyimage/DA/20160927/news/160928811/EP/1/6/EP-160928811.jpg&updated=201609272331&MaxW=800&maxH=800&noborder">Yasser Arafat and Shimon Peres</a> in 1994 and 2001. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=367&fit=crop&dpr=1 600w, https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=367&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=367&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=461&fit=crop&dpr=1 754w, https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=461&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=461&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Prince William and Sir David Attenborough watch the latter’s new documentary ‘Our Planet.’</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/APTOPIX-Switzerland-Davos-Forum/640d31808598444ca0d598551cf2e9aa/128/0">AP Photo/Markus Schreiber</a></span>
</figcaption>
</figure>
<p>But Davos doesn’t need to make a breakthrough in an ancient conflict to be effective. Its theme this year, “<a href="https://www.iafrica.com/wef-in-davos-globalisation-4-0-what-does-that-mean/">Globalization 4.0</a>,” served as an important rebuke to the <a href="https://theconversation.com/why-the-rise-of-populist-nationalist-leaders-rewrites-global-climate-talks-107870">nationalists emerging</a> in the world today who have shown a <a href="https://www.msnbc.com/stephanie-ruhle/watch/business-leaders-concerned-about-rise-of-u-s-nationalism-populism-1430526531560">disdain for multilateralism</a> and a preference for <a href="https://www.usnews.com/opinion/thomas-jefferson-street/articles/2017-09-14/donald-trump-and-the-rise-of-zero-sum-politics">confrontation over cooperation</a>. </p>
<p>And in fact, <a href="https://www.cnn.com/2019/01/22/economy/central-banks-global-economic-slowdown/index.html">most</a> of the <a href="https://www.nytimes.com/2019/01/23/technology/world-economic-forum-data-controls.html">sessions</a> <a href="https://www.ft.com/content/47c36e02-1fb6-11e9-b126-46fc3ad87c65">focused</a>, as I believe they should, on <a href="https://www.weforum.org/events/world-economic-forum-annual-meeting/programme">finding cooperative ways</a> to solve the world’s pressing problems. </p>
<p>And the world <a href="https://www.reuters.com/article/us-davos-meeting-climatechange/failure-to-curb-climate-change-a-top-risk-davos-survey-idUSKCN1PA13J">has many to deal with</a>, from worsening economic inequality and climate change to the growing scarcity of water. <a href="https://www.weforum.org/events/world-economic-forum-annual-meeting/programme">All were discussed</a> at Davos this year.</p>
<p>Were any breakthroughs made? Maybe not. </p>
<p>Davos cannot realistically be expected to solve the world’s problems in less than a week each year. But despite its elite reputation, I believe it helps direct attention toward actually making the world better for everyone – and not just the elites in the audience.</p><img src="https://counter.theconversation.com/content/110411/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Michaelson is affiliated with the World Economic Forum as a member of its Expert Network. </span></em></p>The high-profile absence of several world leaders including Trump from the World Economic Forum has led some to suggest its influence is in decline. A philosopher who has seen Davos up close disagrees.Christopher Michaelson, Professor of Ethics and Business Law, University of St. ThomasLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1104092019-01-24T11:09:54Z2019-01-24T11:09:54ZGreta Thunberg at Davos: why Gen Z has real power to influence business on climate change<p>The time for action is now – this is the mantra being taken up by Generation Z across the world. Already this year, <a href="https://www.dailymail.co.uk/wires/ap/article-6606517/Students-Germany-Switzerland-protest-climate-change.html">thousands of high school students</a> <a href="https://www.independent.co.uk/environment/brussels-climate-protest-global-warming-children-school-belgium-a8732726.html">across</a> the <a href="https://www.thelocal.ch/20190118/thousands-of-students-protest-against-climate-inaction">world</a> have skipped school to protest their governments’ inaction on climate change. The students were inspired by 16-year-old Swede <a href="https://twitter.com/gretathunberg?lang=en">Greta Thunberg</a>, who started the movement by <a href="https://www.theguardian.com/science/2018/sep/01/swedish-15-year-old-cutting-class-to-fight-the-climate-crisis">skipping school</a> every Friday since August 2018. This is only the beginning: further demonstrations are already scheduled for the coming weeks.</p>
<p>Gen Z has the most to lose from the negative effects of climate change, and Thunberg made a compelling <a href="https://www.youtube.com/watch?v=HzeekxtyFOY">call to action</a> at the recent <a href="https://cop24.gov.pl/">COP24</a> conference in Katowice, Poland: “You say you love your children above all else – and yet you are stealing their future in front of their very eyes,” she told global leaders during the climate summit. “Until you start focusing on what needs to be done rather than what is politically possible, there is no hope. We cannot solve a crisis without treating it as a crisis,” she added. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1073527918616297472"}"></div></p>
<p>Despite the urgency in Greta’s speech and calls for <a href="https://theconversation.com/cop24-climate-protesters-must-get-radical-and-challenge-economic-growth-107768">climate protesters to get more radical</a>, the outcomes of COP24 <a href="https://www.dazeddigital.com/politics/article/42953/1/over-10000-students-skip-school-in-belgium-to-protest-climate-change">left much to be desired</a>, in terms of <a href="https://www.theguardian.com/commentisfree/2018/dec/16/the-guardian-view-on-cop24-while-climate-talks-continue-there-is-hope">actionable steps to cut emissions</a>. It remains to be seen whether Greta’s call to action will take root and drive meaningful change. But our intuition is that, armed with social media and growing economic clout, Gen Z is best positioned to influence business practices, rather than global climate agreements, where <a href="https://theconversation.com/cop24-what-to-expect-107862">political gridlock</a> appears to be the status quo.</p>
<h2>A proud history of activism</h2>
<p>A look back at recent social and environmental movements proves that youth activism <a href="https://theconversation.com/is-the-zero-hour-youth-climate-march-a-turning-point-or-more-of-the-same-100173">can shape the current debate</a> around climate change. Approaching the 60th anniversary of the <a href="https://www.smithsonianmag.com/smithsonian-institution/courage-at-the-greensboro-lunch-counter-4507661/">Greensboro sit-ins</a> – where students flouted segregation by occupying seats at diners – it’s timely to recall the instrumental role young people played throughout the American civil rights movement’s <a href="https://www.washingtonpost.com/news/retropolis/wp/2018/02/20/children-have-changed-america-before-braving-fire-hoses-and-police-dogs-for-civil-rights/?utm_term=.649f2de9385b">most critical moments</a>. <a href="https://www.history.com/topics/black-history/march-on-washington">Their actions</a> helped to desegregate schools, <a href="https://www.britannica.com/event/sit-in-movement">challenge racism</a> and advance voter and civil rights legislation. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/255372/original/file-20190124-135142-1720hek.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/255372/original/file-20190124-135142-1720hek.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=374&fit=crop&dpr=1 600w, https://images.theconversation.com/files/255372/original/file-20190124-135142-1720hek.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=374&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/255372/original/file-20190124-135142-1720hek.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=374&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/255372/original/file-20190124-135142-1720hek.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=470&fit=crop&dpr=1 754w, https://images.theconversation.com/files/255372/original/file-20190124-135142-1720hek.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=470&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/255372/original/file-20190124-135142-1720hek.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=470&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Civil rights protesters at a sit-in, North Carolina, 1960.</span>
<span class="attribution"><a class="source" href="https://upload.wikimedia.org/wikipedia/commons/5/5f/Civil_Rights_protesters_and_Woolworth%27s_Sit-In%2C_Durham%2C_NC%2C_10_February_1960._From_the_N%26O_Negative_Collection%2C_State_Archives_of_North_Carolina%2C_Raleigh%2C_NC._Photos_taken_by_The_News_%26_%2824495308926%29.jpg">State Archives of North Carolina/Wikimedia Commons.</a></span>
</figcaption>
</figure>
<p>Other notable youth movements over the past 50 years have included the <a href="https://www.history.com/topics/vietnam-war/vietnam-war-protests">Vietnam War protests</a>, <a href="https://www.amnesty.org.uk/china-1989-tiananmen-square-protests-demonstration-massacre">Tiananmen Square</a> and the <a href="https://www.nytimes.com/2011/03/18/world/middleeast/18youth.html">Arab Spring</a>. While each of these movements is unique to its time and place in history, they share a common element: a clear authority to protest against.</p>
<p>Arguably, young climate activists today face an even tougher challenge than their historical predecessors. Getting political action on climate change is a <a href="https://link.springer.com/article/10.1007/s11077-012-9151-0">seemingly impossible task</a>, and youth movements over the past 30 years have been <a href="https://theconversation.com/is-the-zero-hour-youth-climate-march-a-turning-point-or-more-of-the-same-100173">unable to influence global policy</a> in any meaningful way. This is largely because no single government or organisation has the necessary authority to create the kind of change needed to address climate change on a global scale. </p>
<h2>A powerful appeal</h2>
<p>While Greta’s message may have fallen on deaf ears at COP24, her <a href="https://www.desmog.co.uk/2019/01/17/climate-change-high-agenda-davos-summit-despite-privileged-access-fossil-fuel-industry">appeal to global business leaders</a> at the annual <a href="https://www.weforum.org/events/world-economic-forum-annual-meeting">World Economic Forum</a> in Davos, Switzerland, holds more promise. As scholars in social innovation, we are interested in understanding how youth activism can transform the business sector, by aligning sustainable business models with a meaningful purpose and positive impact on the environment. </p>
<p>Companies are already looking for ways to <a href="https://theconversation.com/hitching-a-ride-on-social-or-political-movements-can-help-firms-profit-and-change-for-the-better-105159">hitch a ride on social and political movements</a> and tap into <a href="https://www.forbes.com/sites/jiawertz/2018/10/28/how-to-win-over-generation-z-who-hold-44-billion-of-buying-power/#69be247b4c13">Gen Z’s purchasing power</a>, reportedly worth US$44 billion globally. And a number of recent campaigns by young activists have already succeeded in making corporations change their ways. </p>
<p>The <a href="https://eu.usatoday.com/story/news/2018/07/18/anti-straw-movement-based-unverified-statistic-500-million-day/750563002/">anti-straw movement</a>, started by nine-year-old Milo Cress in 2011, illustrates how social media can change behaviour at multinational companies such as <a href="https://www.theguardian.com/business/2018/jun/15/mcdonalds-to-switch-to-paper-straws-in-uk-after-customer-concern">McDonalds</a> and <a href="https://www.theguardian.com/business/2018/jul/23/starbucks-straws-ban-2020-environment">Starbucks</a>. Likewise, the Facebook page <a href="https://www.facebook.com/kidscutpalmoil/">Kids Cut Conflict Palm Oil</a> has – with the help of Australian NGO <a href="http://wildlifeasia.org.au/">Wildlife Asia</a> – successfully lobbied PepsiCo <a href="https://news.mongabay.com/2018/03/pepsi-cuts-off-indonesian-palm-oil-supplier-over-labor-sustainability-concerns/">to cut ties</a> with an Indonesian palm oil supplier over deforestation and labour concerns.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/255380/original/file-20190124-135151-fb8atf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/255380/original/file-20190124-135151-fb8atf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/255380/original/file-20190124-135151-fb8atf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/255380/original/file-20190124-135151-fb8atf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/255380/original/file-20190124-135151-fb8atf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/255380/original/file-20190124-135151-fb8atf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/255380/original/file-20190124-135151-fb8atf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Students take a stand.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/tallahassee-florida-united-states-february-21-1030448821?src=cmvlOXrHA6fdQWbboVnI8Q-1-1">KMH Photovideo/Shutterstock.</a></span>
</figcaption>
</figure>
<p>Recent initiatives to end gun violence in the US have also seen youth activists play a major role. Following the <a href="https://www.nytimes.com/2018/02/14/us/parkland-school-shooting.html">shooting that killed 17 people</a> at a school in Parkland, Florida, students began social media campaigns <a href="https://abcnews.go.com/US/companies-cutting-ties-nra-grows-include-hertz-metlife/story?id=53322436">targeting major companies</a> with ties to the National Rifle Association, forcing them to end those relationships. Dick’s Sporting Goods, a major gun retailer, <a href="https://www.cnbc.com/2018/02/28/major-gun-retailer-dicks-will-stop-selling-assault-style-rifles-nyt.html">pulled assault-style rifles from its stores</a> in response. </p>
<p>Companies also want to understand how digital natives use social media to interact with their products and services. From <a href="https://www.cnbc.com/2018/10/27/gen-z-expert-jonah-stillman-is-consulting-for-intuit-linkedin-and-nfl.html">hiring Gen Z advisors</a> to guide digital marketing efforts, to putting <a href="https://qz.com/389387/companies-need-more-millennial-board-members-if-they-want-to-stay-relevant/">Millennials and Gen Z on their board of directors</a>, companies are racing to connect with young people. </p>
<p>Understanding that Gen Z are <a href="https://www.entrepreneur.com/article/305021">motivated by social causes</a>, companies are making efforts to genuinely engage with this demographic on social media. For example, <a href="https://boxedwaterisbetter.com/">Boxed Water</a> has pledged to plant two trees for every picture of their product shared with #betterplanet, and has planted nearly 800,000 trees to date.</p>
<p>The international community <a href="https://www.ipcc.ch/sr15/">has been warned</a> that there is only a 12 year window to keep global temperatures from rising more than 1.5C – the limit to prevent “<a href="https://www.bbc.com/news/av/science-environment-45792362/climate-change-how-15c-degrees-of-global-warming-could-change-the-world">climate catastrophe</a>”. By that time, Greta Thunberg will be just 28 years old – so it’s no wonder that today’s youth are determined to keep up the pressure. </p>
<p>Tackling climate change is going to need buy-in from corporations, governments and civil society. If today’s young activists can speed up this process, all power to them. After all, as <a href="https://quoteinvestigator.com/2013/01/22/borrow-earth/">the old proverb</a> goes, we don’t inherit the world from our parents – we borrow it from our children.</p><img src="https://counter.theconversation.com/content/110409/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Gen Z is best positioned to influence business practices, rather than global climate agreements, where political gridlock appears to be the status quo.Vanina Farber, elea Professor for Social Innovation, International Institute for Management Development (IMD)Patrick Reichert, elea Research Fellow in Social Innovation, International Institute for Management Development (IMD)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1102162019-01-22T13:13:55Z2019-01-22T13:13:55ZDavos: leaders talk about globalisation as though it’s inevitable – when it isn’t<p>Global leaders have descended on the Swiss ski resort of Davos for the World Economic Forum’s annual meeting. This year’s theme is “<a href="http://www3.weforum.org/docs/WEF_AM19_Meeting_Overview.pdf">Globalisation 4.0</a>: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution”. </p>
<p>On the agenda is how countries can respond to and shape changes in how goods are produced, distributed and consumed. It is based on the idea that the world is entering a fourth industrial revolution, where a new wave of technological progress will launch us into a new era of globalisation. But while the world’s leaders pin their hopes for economic growth on a technological leap, the rest of us are left to wonder what the implications may be. </p>
<p>The first industrial revolution saw the mechanisation of production, using water and steam power. This dramatically transformed how people <a href="https://yalebooks.co.uk/display.asp?k=9780300205251">lived and worked</a>. The second industrial revolution used electric power to create mass production. The third saw the automation of production using electronics and information technology. </p>
<p>The fourth industrial revolution is characterised by a fusion of technologies that is blurring the lines between the physical and digital. It is based not just on digitisation but on the integration of new and emerging technologies such as robotics, artificial intelligence, big data and <a href="https://theconversation.com/its-not-just-hype-3d-printing-is-the-bridge-to-the-future-43493">3D printing</a>. These will combine into the “<a href="http://ec.europa.eu/research/industrial_technologies/factories-of-the-future_en.html">factories of the future</a>”, which are wholly automated. Supply chains will be transformed with predictions that production will become more local to consumers. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/254919/original/file-20190122-100279-180ezhi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/254919/original/file-20190122-100279-180ezhi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=390&fit=crop&dpr=1 600w, https://images.theconversation.com/files/254919/original/file-20190122-100279-180ezhi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=390&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/254919/original/file-20190122-100279-180ezhi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=390&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/254919/original/file-20190122-100279-180ezhi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=490&fit=crop&dpr=1 754w, https://images.theconversation.com/files/254919/original/file-20190122-100279-180ezhi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=490&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/254919/original/file-20190122-100279-180ezhi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=490&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">3D printing is part of globalisation 4.0.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/3d-printer-printing-objects-yellow-form-546055189?src=8P_jtI017Udp39UhvMV3Eg-1-32">MarinaGrigorivna / Shutterstock</a></span>
</figcaption>
</figure>
<p>There is <a href="https://www.industryweek.com/emerging-technologies/preparing-factory-future">some evidence</a> that progress towards this vision is happening. <a href="https://medium.com/@jennifer_johns/the-evolution-of-the-additive-manufacturing-industry-59b0a75bff5e">3D printing</a> is quickly advancing. Digitising manufacturing technology enables production systems to be integrated and intelligent. Many governments have developed policies designed to support the factory of the future, such as Germany’s <a href="https://www.gtai.de/GTAI/Navigation/EN/Invest/Industries/Industrie-4-0/Industrie-4-0/industrie-4-0-what-is-it.html">Industrie 4.0</a> and the UK’s <a href="https://www.gov.uk/government/topical-events/the-uks-industrial-strategy">industrial strategy</a>.</p>
<h2>A surprising choice</h2>
<p>The logic of the World Economic Forum’s choice to focus on Globalisation 4.0 is connected to debates in industry and among policy makers about the potential transformation of production and consumption. This begins with a shift in how goods are manufactured. The <a href="https://books.google.co.uk/books?id=ytrqJswoRCoC&printsec=frontcover&dq=schumpeter+creative+destruction&hl=en&sa=X&ved=0ahUKEwih7PyK8f7fAhViUBUIHRqqCW8Q6AEINDAC#v=onepage&q=schumpeter%20creative%20destruction&f=false">Schumpeterian “creative destruction” thesis</a> is increasingly used to justify the fourth industrial revolution idea. Schumpeter argued that capitalism is driven not by incremental efforts to cut costs and boost profits in a competitive market (as Adam Smith suggested) but by the pursuit of game-changing technological transformations. </p>
<p>But focusing on this at Davos is surprising, given the plethora of highly troubling issues facing the global economy. These include <a href="https://www.theguardian.com/environment/2018/oct/08/global-warming-must-not-exceed-15c-warns-landmark-un-report">renewed concerns about the environment</a>, <a href="http://reports.weforum.org/global-risks-2018/geopolitical-powershift/">geopolitical tensions</a>, the rise in <a href="https://www.ft.com/content/59a37a38-7857-11e8-8e67-1e1a0846c475">nationalism</a> and <a href="https://www.theguardian.com/world/migration">migration crises</a>. </p>
<p>The focus on technology may have been chosen precisely because, at first glance, it is apolitical and uncontentious. Surely everyone can benefit from technological improvement? But the Davos agenda does not appear to critique the very notion of this new globalisation enough. It assumes our inevitable progression towards this vision and fails to question whether it is even a desirable future. </p>
<h2>Mixed fortunes</h2>
<p>Globalisation 4.0 is based on the assumption that globalisation is a perpetual, unstoppable force. Klaus Schwab, founder of the World Economic Forum, <a href="https://www.foreignaffairs.com/articles/world/2019-01-16/globalization-40">recently said</a> that at the core of Globalisation 4.0 is the understanding that globalisation won’t disappear. He said it will deepen, based on the connectivity of national digital and virtual systems and the related flow of ideas and services. Yet the current <a href="https://www.independent.co.uk/news/business/news/huawei-china-national-security-threat-arrests-technology-spying-espionage-a8734461.html">nationalism around technology</a> and the <a href="http://trade.ec.europa.eu/doclib/docs/2018/june/tradoc_156979.pdf">increase in trade barriers</a> suggests not.</p>
<p>Nor does the theme indicate that much attention is being paid to the implications of the fourth industrial revolution. Technological shifts are disruptive. The <a href="https://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond/">WEF</a> suggests it has the potential to raise global income levels and improve the quality of life for populations around the world. But this is contrary to the effects we’ve seen of <a href="https://books.google.co.uk/books/about/Globalization_and_Its_Discontents.html?id=LOAeCgAAQBAJ&printsec=frontcover&source=kp_read_button&redir_esc=y#v=onepage&q&f=false">globalisation so far</a>.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/254920/original/file-20190122-100276-1ccsx9f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/254920/original/file-20190122-100276-1ccsx9f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/254920/original/file-20190122-100276-1ccsx9f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/254920/original/file-20190122-100276-1ccsx9f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/254920/original/file-20190122-100276-1ccsx9f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/254920/original/file-20190122-100276-1ccsx9f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/254920/original/file-20190122-100276-1ccsx9f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Globalisation has not benefitted everyone equally.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/inequality-between-people-concept-1159942408">Shutterstock</a></span>
</figcaption>
</figure>
<p>Unfortunately, capitalism and globalisation have benefited some but not others and there is currently little evidence that <a href="http://theconversation.com/what-the-industrial-revolution-really-tells-us-about-the-future-of-automation-and-work-82051">Globalisation 4.0 could be any different</a>. As the WEF acknowledges, greater inequalities could result, particularly through the disruption of labour markets. </p>
<p>Increased automation will radically alter the structure of work in the global economy. What will the displaced workers do? Deindustrialisation in advanced economies has created some profound difficulties including <a href="https://onlinelibrary.wiley.com/doi/book/10.1002/9780470773727">unemployment</a> and <a href="https://books.google.co.uk/books/about/Spatial_Divisions_of_Labor.html?id=X_uVogLRjQsC&redir_esc=y">poverty</a>. These have still not been adequately addressed. So it looks like we could enter the fourth industrial revolution without solving some serious problems remaining from the third. </p>
<p>Proponents of Globalisation 4.0 may argue that a greater number of highly skilled, highly paid jobs will be created instead. This could be partially true, but those industries charged with producing the fourth industrial revolution are repeatedly asking governments to help increase education and training in STEM subjects, especially engineering. </p>
<p>The Davos agenda states that “global growth must be inclusive and sutainable”.
This fails to recognise the rise and importance of “<a href="https://www.degrowth.info/en/what-is-degrowth/">degrowth</a>” movements. Instead of a focus on GDP growth, these emphasise well-being, conviviality and open, localised economies. </p>
<p>Davos is stuck in 20th century understandings of the global economy, viewing “progress” as being achieved through economic growth. This year’s meeting also runs the risk of being irrelevant thanks to the notable absences of leaders like Donald Trump, Theresa May and Emmanuel Macron. Perhaps the economic thinking upon which the WEF is based needs a revolution of its own in order to meet the challenges of future technological change.</p><img src="https://counter.theconversation.com/content/110216/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jennifer Johns receives funding from the British Academy. </span></em></p>There is a plethora of highly troubling issues facing the global economy that are caused, in part, by globalisation.Jennifer Johns, Reader in International Business, University of BristolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/956652018-04-26T13:29:00Z2018-04-26T13:29:00ZWhy only revolutionary change will deliver real freedom<figure><img src="https://images.theconversation.com/files/216480/original/file-20180426-175038-jlec60.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The ANC has had an exceptionally poor track record of governance.</span> <span class="attribution"><span class="source">EPA/Cornell Tukiri</span></span></figcaption></figure><p><a href="http://www.sahistory.org.za/dated-event/freedom-day-celebrated-south-africa">Freedom Day</a> is an annual public holiday in South Africa to celebrate the anniversary of the country’s first democratic election in 1994. The euphoria of that moment is now a distant memory. To many the promise of a truly democratic future marked out in the <a href="https://theconversation.com/the-legacy-of-south-africas-freedom-charter-60-years-later-43647">Freedom Charter</a> of 1955, and even the less radical commitments of the new <a href="http://www.sahistory.org.za/article/constitution-republic-south-africa-1996">Constitution</a> adopted in 1996, seem to have been <a href="http://abahlali.org/node/16440/">betrayed</a>.</p>
<p>From communities, to the mines and the factories, university campuses, and rural areas there is a deep sense that the promise of what was once called “the new South Africa” has been dashed. This often manifests in <a href="https://www.timeslive.co.za/news/south-africa/2018-04-19-mayhem-in-mahikeng-looting-and-loathing-in-the-north-west/">popular protest</a> and the emergence of new forms of popular organisation outside the ruling African National Congress (ANC).</p>
<p>The <a href="http://www.sahistory.org.za/article/convention-democratic-south-africa-codesa">negotiated settlement</a> that brought an end to apartheid at the end of the Cold War was once widely – if not universally – celebrated. But the settlement was a compromise, a fact that quickly became apparent. The negotiated settlement ensured that the transition left many of the colonial features of South African society intact. The interests of the <a href="https://www.pambazuka.org/advocacy-campaigns/co-optation-african-national-congress-south-africa%E2%80%99s-original-%E2%80%98state-capture%E2%80%99">old white elites and the emerging black elites</a> were systematically prioritised over those of the working class and impoverished majority.</p>
<p>Furthermore, the ANC has had an exceptionally poor track record of governance. The party is regularly charged with <a href="https://www.huffingtonpost.co.za/2018/04/23/new-york-times-slams-anc-says-the-party-has-become-gorged-on-corruption_a_23417690/">wholesale corruption</a>, repression (including, most notoriously, the 2012 <a href="http://www.sahistory.org.za/article/marikana-massacre-16-august-2012">massacre</a> of striking miners at Marikana), sustaining neo-apartheid forms of rule in the <a href="https://www.dailymaverick.co.za/article/2018-04-24-traditional-leaders-not-rural-citizens-are-at-the-centre-of-the-land-expropriation-debate-2/#.WuHKLYhubIU">countryside</a> and the <a href="https://mg.co.za/article/2018-03-09-00-urban-land-question-is-also-urgent">cities</a> and the failure to redistribute <a href="https://www.news24.com/Columnists/GuestColumn/land-expropriation-without-compensation-what-does-it-mean-20180304-5">land</a> and democratise the commanding heights of the economy by removing it from the domination of white capital.</p>
<h2>A great disappointment</h2>
<p>The broad sense of disappointment in post-apartheid South Africa is not just a matter of sentiment. It’s an undeniable fact that millions are unemployed and millions languish in shacks.</p>
<p>The most recent <a href="http://documents.worldbank.org/curated/en/530481521735906534/pdf/124521-REV-OUO-South-Africa-Poverty-and-Inequality-Assessment-Report-2018-FINAL-WEB.pdf">2018 World Bank Report</a> shows that over 55% of the population live below the poverty line. Those closest to the upper poverty line live on just R992 (USD$80) per person and over 76% live with the constant threat of poverty.</p>
<p>And, according to last year’s figures, 27.7% of the population is unemployed and up to <a href="https://theconversation.com/food-insecurity-is-a-reality-for-millions-of-south-africans-living-in-informal-settlements-48519">70% of homes</a> suffer food insecurity with many of these households skipping meals. </p>
<p>The education statistics are just as bleak. A <a href="https://www.google.co.za/search?q=age+at+grade+4&oq=age+at+grade+4&aqs=chrome..69i57.2772j0j7&sourceid=chrome&ie=UTF-8">2016 international literacy report</a> found that eight out of 10 school pupils in Grade 4, that is between the ages of 9-10, cannot read.</p>
<p>Two decades after the end of apartheid the majority of the black population still labours under conditions of exploitation, oppression and poverty despite South Africa being classified as a <a href="https://www.brandsouthafrica.com/investments-immigration/business/economy/south-africa-economy-overview">upper middle income economy</a> with the second largest economy on the continent. </p>
<p>The stark contrast between rich and poor makes South Africa the most <a href="http://documents.worldbank.org/curated/en/530481521735906534/pdf/124521-REV-OUO-South-Africa-Poverty-and-Inequality-Assessment-Report-2018-FINAL-WEB.pdf">unequal country in the world</a>. This inequality is deeply raced and gendered. African women are consistently at the bottom of all indicators – from poverty to income, education, safety and food insecurity. The key question that arises is how have such conditions been able to continue in a country as rich as South Africa?</p>
<h2>Betrayal of a promise</h2>
<p>The ANC came to power via the strength of a <a href="http://www.sahistory.org.za/topic/timeline-labour-and-trade-union-movement-south-africa-1980-1990">working-class mass movement</a> based both in communities and workplaces. But once the ANC attained power it demobilised the movements that had defeated apartheid. This allowed the party to become a vehicle for elite interests. Black elites sought to integrate themselves into existing power structures, and to become partners in the management of exploitation and oppression, rather than to build a just society.</p>
<p>The majority of black South Africans were left with <a href="http://www.justice.gov.za/legislation/constitution/SAConstitution-web-eng.pdf">liberal rights</a> on paper. In reality, however, they continued to suffer severe impoverishment and exploitation. As the gap between the promises of the “new South Africa” and lived reality widened, protests became <a href="https://theconversation.com/protests-soar-amid-unmet-expectations-in-south-africa-42013">more frequent</a>, and repression rapidly worsened.</p>
<p>The ANC lacked the political will to implement even the most basic economic reforms for the majority of South Africans. This is in stark contrast to <a href="https://www.dailymaverick.co.za/opinionista/2018-04-08-brazil-lulas-imprisonment-an-attack-on-the-working-class-globally/#.WuCGPdNubjA">Lula’s government in Brazil</a> which made modest reforms that, nonetheless, made a real difference to people’s lives. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/216484/original/file-20180426-175044-1wj2fdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/216484/original/file-20180426-175044-1wj2fdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/216484/original/file-20180426-175044-1wj2fdc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/216484/original/file-20180426-175044-1wj2fdc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/216484/original/file-20180426-175044-1wj2fdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/216484/original/file-20180426-175044-1wj2fdc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/216484/original/file-20180426-175044-1wj2fdc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Many South Africans continue to wallow in poverty 24 years after freedom.</span>
<span class="attribution"><span class="source">EPA-EFE/Nic Bothma</span></span>
</figcaption>
</figure>
<p>The rhetoric of the ANC, and its partners in the <a href="http://www.sacp.org.za/">South African Communist Party</a> and the <a href="http://www.cosatu.org.za/show.php?ID=925">Congress of South African Trade Unions</a> was, and is often, left wing, sometimes even socialist. But in reality, the country has been ruled by a comprador elite unwilling to make even the most limited moves to reform the countryside, the cities or the economy. The crux of the country’s disappointment lies in the fact that the ANC tied itself to the interests of capital rather than to the majority of South Africans.</p>
<h2>Ramaphosa no panacea</h2>
<p>Under Jacob Zuma’s disgraceful rule the degeneration of the ruling party spiralled into free fall. But as much as the removal of Zuma from the Presidency is to be welcomed, it <a href="https://www.jacobinmag.com/2017/12/jacob-zuma-south-africa-anc">does not resolve</a> the country’s fundamental problems. Corruption did not begin with Zuma, and the entire negotiated settlement was a deal structured to keep rapacious forms of capitalism in place.</p>
<p>President Cyril Ramaphosa <a href="https://www.fin24.com/Economy/ramaphosa-a-deeply-compromised-capitalist-billionaire-saftu-20171228">is an oligarch</a> who became a key figure in the forms of accumulation and repression that have left the majority of black South Africans still impoverished and exploited after apartheid.</p>
<p>If freedom is to be realised for the majority of people, South Africa will have to construct a new rural order, a new urban order and a new economic order. But charming the elites in <a href="https://www.fin24.com/Economy/South-Africa/ramaphosa-wows-davos-money-20180128-2">Davos</a> and the <a href="https://www.huffingtonpost.co.za/2018/04/18/were-here-for-the-ramaphosa-tells-london-elite_a_23414106/">City of London</a> won’t change the lives of impoverished and working class South Africans. A return to neoliberalism cannot be the answer to our tremendous problems.</p>
<h2>Towards socialism</h2>
<p>If the promise of freedom is to be restored to South Africans, the first step is to rebuild the power of the working class and impoverished people. And a clear vision of a better future needs to be developed that goes beyond liberal rights and into substantive entitlements. New formations need to build their power to the point where a new order can be constructed in the countryside, the cities and in the economy.</p>
<p>South Africa, is fortunate to still have a mass-based working class movement. By building the power of progressive formations of impoverished and working class people across the country the country can begin to build an alternative society in which socialism is not just empty rhetoric. It is in this kind of change, revolutionary change, that the hope for real freedom lies.</p><img src="https://counter.theconversation.com/content/95665/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Vashna Jagarnath is affiliated with The National Union of Metal Workers of South Africa NUMSA</span></em></p>The removal of Jacob Zuma from power is to be welcomed but, it’s not the answer to South Africa’s problems.Vashna Jagarnath, Senior researcher, Centre for Social Change, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/908742018-02-06T13:08:57Z2018-02-06T13:08:57ZDigital dark age fears stoked by Davos elite do little to address cybersecurity<figure><img src="https://images.theconversation.com/files/205067/original/file-20180206-14096-dcg9y3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/hexagon-network-covering-world-map-glowing-660792934?src=vv5AqSpZwD2gOpWaL6sEvQ-1-72">Shutterstock</a></span></figcaption></figure><p>Business leaders who recently convened in Davos for the annual <a href="https://www.weforum.org/">World Economic Forum</a> fretted over the various catastrophes that could hit the globe hard and – given the recent spate of cyberattacks – cybersecurity was high up on the agenda.</p>
<p>The end result was the launch of a <a href="https://www.weforum.org/press/2018/01/to-prevent-a-digital-dark-age-world-economic-forum-launches-global-centre-for-cybersecurity">Global Centre for Cybersecurity</a> (GCC) with a clear mission to “prevent a digital dark age”. It claims to be the first platform for cybersecurity coordination on a global scale, bringing together governments, business and law enforcement agencies. The importance of cybersecurity is growing not only for traditional computer networks but also for “artificial intelligence, robotics, drones, self-driving cars and the Internet of Things”.</p>
<p>Cyberattacks are like any other crime, except that the origins and reach can be global. Put simply, a cyber criminal in one country can reach out to target victims at the other end of the world. Likewise, a gang of cyber criminals could organise themselves across several countries to target their victims. </p>
<p>It’s the unfortunate reality of the connected world we live in, where the internet doesn’t only provide connectivity but also anonymity and transient access, all of which serve to enable such attacks. </p>
<p>On top of that, parallel structures over the internet – known as the <a href="https://theconversation.com/what-is-the-dark-web-and-how-does-it-work-63613">dark web</a> – have emerged to facilitate cyber attacks of all kinds, allowing a black economy to thrive and be marketised. </p>
<p>This year’s <a href="http://reports.weforum.org/global-risks-2018/">Global Risk Report</a> places cyberattacks in the top five global risks, behind only extreme weather events and natural disasters. The World Economic Forum <a href="http://reports.weforum.org/global-risks-2018/global-risks-2018-fractures-fears-and-failures/">said</a>:</p>
<blockquote>Most attacks on critical and strategic systems have not succeeded – but the combination of isolated successes with a growing list of attempted attacks suggests that risks are increasing. And the world’s increasing interconnectedness and pace heightens our vulnerability to attacks that cause not only isolated and temporary disruptions, but radical and irreversible systemic shocks.</blockquote>
<p>It’s clear that a globally coordinated approach to cybersecurity is essential.</p>
<p>While this is laudable, there have been similar efforts over the past decade or so – with mixed results. The <a href="https://www.coe.int/en/web/conventions/full-list/-/conventions/treaty/185">Budapest Convention on Cybercrime</a>, launched in 2001 by the <a href="https://www.coe.int/en/web/portal">Council of Europe</a>, was one such attempt to align laws and to enable a key provision of securing digital evidence across jurisdictions to effectively resolve investigations. <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2615789">Harmonisation</a>, however, has been a challenge with <a href="https://www.theregister.co.uk/2017/07/27/asia_can_take_world_beyond_budapest_convention_on_cybercrime/">competing regional efforts emerging</a> in various parts of the world.</p>
<p><a href="https://ccdcoe.org/">NATO’s Cooperative Cyber Defence Centre of Excellence</a> based in Tallinn, Estonia, is another such effort. It has played a major role in help producing the <a href="https://ccdcoe.org/tallinn-manual.html">Tallinn Manual</a>, which is the most comprehensive of international treaties for cyberspace law. Its impact is severely limited, however, because it is strictly an academic study and legally non-binding. </p>
<h2>Geopolitics and cybersecurity collide</h2>
<p>The quality of a state’s capacity to respond to such a <a href="https://theconversation.com/its-the-year-2020-hows-your-cybersecurity-57868">complex</a> problem is rapidly being recognised as an important element of global competitiveness. What, then, could global coordination achieve for effective cybersecurity?</p>
<p>A key aim of the proposed GCC is to work towards an appropriate and agile regulatory framework on cybersecurity. Regulatory alignment needs significant teamwork on global policy at all levels, sometimes from officials with little relevant expertise. They are required – often in time-critical scenarios – to assess evidence from a mix of sources including official threat intelligence, academic sources and industry threat reports. </p>
<p>All of which present policy challenges. How effective is the threat assessment? How good is the risk perception associated with a potential cyber attack? How are consequences judged, particularly in terms of critical and national assets? How does one account for a proportionate response, especially when it is <a href="https://theconversation.com/cyber-espionage-is-more-difficult-to-pin-to-a-state-than-spying-in-the-physical-world-32977">nearly impossible to pin down perpetrators</a>? And, most importantly, how do we shape future policy to address these questions? </p>
<p>The <a href="http://www.gcsp.ch/">Geneva Centre for Security Policy (GCSP)</a>, a leading security thinktank, plays host to an <a href="http://www.atlanticcouncil.org/programs/brent-scowcroft-center/cyber-statecraft/cyber-9-12">annual student competition</a> to address these questions. Competing teams from all over the world enter the competition and attempt to present a set of viable policy options for each round of the game. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=406&fit=crop&dpr=1 600w, https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=406&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=406&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=510&fit=crop&dpr=1 754w, https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=510&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=510&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Business folk hitch a ride at the World Economic Forum in Davos, where cyber risks were a hot topic.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/davos-switzerland-jan-25-2018-working-1011856720?src=Rr_Ux6WAl-n9y-Bacy-5uQ-1-17">Shutterstock</a></span>
</figcaption>
</figure>
<p>A panel of judges choose winners for each round based on the most appropriate response to a set of cybersecurity threats identified. As rounds proceed, the scenarios escalate becoming more complex. The winning team is the one that demonstrates excellence in deep technical knowledge and international relations skill. It’s an example of a truly global competitive effort. Could such games pave the way for a globally-coordinated <a href="https://www.oecd.org/cfe/leed/44681969.pdf">capacity building</a> initiative which seeks to allow all members – including the poorest and most disadvantaged – to develop skills and competencies?</p>
<p>Perhaps, but capacity building is only one challenge. How would a global effort serve to resolve national concerns over an <a href="https://gspp.berkeley.edu/research/featured/the-cyber-security-challenge">overt declarative policy</a>, effective deterrence, guarantee of civil liberty, democratic oversight and use of public-private cooperation for cyberspace? How would age-old political fault lines be resolved in the Middle East and East Asia, which <a href="https://www.weforum.org/agenda/2016/05/who-are-the-cyberwar-superpowers/">persist</a> across cyberspace? And how would new <a href="https://www.reuters.com/article/us-africanunion-summit-china/china-denies-report-it-hacked-african-union-headquarters-idUSKBN1FI2I5">global cyber conflicts</a> be prevented?</p>
<p>The GCC undoubtedly offers a reasonable proposition to nation states, by urging them to collaborate on overcoming cyber threats in a coordinated way. But for such a noble goal to work, it requires deeper resolve to deliver and a level of national commitment unprecedented over previous efforts. Given the increased global uncertainty, we are yet to have faith.</p><img src="https://counter.theconversation.com/content/90874/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Siraj Ahmed Shaikh receives funding from EPSRC. </span></em></p>Cyberattacks are in the top five global risks, behind extreme weather events and natural disasters. But global cooperation remains deeply problematic.Siraj Ahmed Shaikh, Professor of Systems Security, Coventry UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/907962018-02-04T20:37:48Z2018-02-04T20:37:48ZWhy Justin Trudeau is not the leader many believe he is<figure><img src="https://images.theconversation.com/files/204614/original/file-20180202-162066-1mcidl7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Prime Minister Justin Trudeau walks past Ivanka Trump at the Women and Development event at the G20 summit in July 2017 in Germany. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Ryan Remiorz</span></span></figcaption></figure><p>Stephen Harper, Canada’s former prime minister, might well have been less colourful and pleasing to eye and ear than the current Canadian leader. </p>
<p>But Harper focused on what he believed Canada needed to get ahead in the world, not on his image and on making Canadians feel good about themselves. This contrasts markedly with the approach under Prime Minister Justin Trudeau. </p>
<p>How much longer will Canada have to pay the price so Trudeau can remind us that he is a human rights activist? </p>
<p>Take, for example, the inquiry into violence against Indigenous women and girls, and the flow of refugees and asylum seekers coming to Canada. </p>
<p>One of the most sensitive issues during Canada’s 2015 federal election was the debate about creating an inquiry into missing and murdered Indigenous women and girls. <a href="https://news.vice.com/article/harper-again-rejects-call-for-inquiry-into-missing-and-murdered-indigenous-women-in-canada">Harper resisted creating one</a>, despite years of urging by Indigenous communities, the United Nations and human rights groups. <a href="https://ca.reuters.com/article/domesticNews/idCAKBN0TR2BY20151208">Trudeau committed to launching a national inquiry</a> during the political campaign.</p>
<p>Canadians finally believed this issue would be addressed, <a href="http://www.cbc.ca/news/politics/justin-trudeau-afn-indigenous-aboriginal-people-1.3354747">and there was new hope for reconciliation</a>. Trudeau promised a “<a href="http://nationalpost.com/news/politics/trudeau-says-canada-will-forge-ahead-with-a-total-renewal-of-relationship-with-first-nations">total renewal</a>” of Canada’s relationship with Indigenous communities. Carolyn Bennett was named Minister of Indigenous and Northern Affairs, and assigned to the <a href="http://www.mmiwg-ffada.ca/">National Inquiry into Missing and Murdered Indigenous Women and Girls</a>.</p>
<p>But Bennett, the <a href="http://www.cbc.ca/radio/unreserved/reconciliation-steps-forward-and-the-importance-of-animals-in-modern-indigenous-life-1.3612605/5-questions-with-carolyn-bennett-minister-of-indigenous-affairs-1.3613711">so-called minister of reconciliation</a>, has proven unable to make much progress on the inquiry. </p>
<p>It <a href="https://www.theglobeandmail.com/opinion/editorials/globe-editorial-inquiry-into-missing-and-murdered-indigenous-women-can-still-make-a-difference/article36827702/">languishes</a> to this day, money wasted, mired in recrimination and hostility. <a href="https://www.theguardian.com/world/2017/jul/30/canada-first-nations-indigenous-women-inquiry">Expectations dashed</a>, some from Indigenous communities say they have been <a href="http://aptnnews.ca/2017/10/17/this-is-not-what-i-walked-across-canada-for-tensions-rise-at-national-inquiry/">failed once again</a>.</p>
<p>In a recent cabinet shuffle, Trudeau split Bennett’s ministerial portfolio, a reflection of her performance in a hard job, but she <a href="https://pm.gc.ca/eng/minister-crown-indigenous-relations-and-northern-affairs-mandate-letter">remains lead minister</a> for the inquiry. <a href="https://www.theglobeandmail.com/news/politics/trudeaus-shuffle-reveals-two-truths-about-liberal-cabinet/article36101146/">Expectations remain low</a>.</p>
<h2>Polished, poised</h2>
<p>Harper lost the 2015 election for several reasons – he’d spent a long time in power, there was a <a href="https://www.usatoday.com/story/news/world/2015/10/20/justin-trudeau-canadas-new-leader-profile/74256118/">charismatic new opposition leader</a> on the scene, and he seemed to lack patience any longer to provide the morally superior rhetoric that Canadians love. This nationalistic self-praise, proclaiming Canadians’ virtue over and above all other countries, is what Canadian scholar <a href="http://www.queensu.ca/politics/people/faculty/kim-richard-nossal">Kim Richard Nossal</a> aptly termed “<a href="http://journals.sagepub.com/doi/abs/10.1177/002070200506000408?journalCode=ijxa">ear candy</a>.”</p>
<p>Not Trudeau. Polished and poised, he always says the “right” thing. If Trudeau’s Canada is famous for anything in the world, it is for setting a good example to other countries. </p>
<p>Trudeau implemented his <a href="http://www.cbc.ca/news/politics/trudeau-syria-refugees-settlement-groups-1.3291959">election campaign promise to allow 25,000 Syrian refugees</a> expedited entry to Canada. And when U.S. President Donald Trump moved in January 2017 to <a href="https://www.theguardian.com/us-news/2017/mar/06/new-trump-travel-ban-muslim-majority-countries-refugees">ban travellers from targeted Muslim-majority</a> countries, Trudeau sent a tweet depicting Canada as a tolerant haven, and emphasized its welcoming, open borders.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"825438460265762816"}"></div></p>
<p>Trudeau’s approach to the Syria crisis and to immigration generally is in stark contrast to the <a href="https://www.theguardian.com/world/2015/oct/08/canada-stephen-harper-processing-syrian-refugees">Harper government’s.</a> His viral tweet last year was spun into a widespread media assertion that Canada <a href="https://www.theguardian.com/world/2017/aug/25/justin-trudeau-forced-to-backtrack-on-open-invitation-to-refugees">would accept everyone who came</a>. Perhaps this was exactly what he wanted: To showcase his human rights credentials and Canada’s friendliness and compassionate attitude compared to Trump’s.</p>
<p>However, Trudeau’s tweet created a huge problem.</p>
<p>When thousands of Haitian asylum-seekers, afraid <a href="http://www.cbc.ca/news/canada/montreal/quebec-announcement-asylum-seekers-1.4240038">Trump might end their temporary protected</a> status that allows them to remain in the U.S., illegally crossed the border into Québec, the Trudeau government started singing a different tune. In July and August 2017, <a href="https://www.washingtonpost.com/news/worldviews/wp/2018/01/10/canada-is-sending-a-politician-to-california-to-dissuade-salvadorans-from-crossing-the-border-illegally/?utm_term=.556d3a99c30f">250 people a day crossed</a> the border, many of them Haitians. Ministers rushed to explain there was no open invitation: <a href="https://www.theguardian.com/world/2017/aug/25/justin-trudeau-forced-to-backtrack-on-open-invitation-to-refugees">There are rules</a> that must be adhered to, and <a href="http://www.cic.gc.ca/english/department/media/multimedia/misleading-false-information-refugee-status-canada.asp">claiming asylum is not a free ticket into Canada</a>.</p>
<p><a href="https://www.npr.org/sections/thetwo-way/2017/08/10/542589246/canadas-army-builds-tent-camp-for-haitian-asylum-seekers-arriving-from-u-s">Tent camps</a> for the initial refugee processing have been set up along the Canada-U.S. border. And more people may come. Canadian <a href="https://www.nytimes.com/2018/01/13/world/canada/quebec-immigrants-haitians.html">officials are gearing up for an influx</a> of migrants heading north in the coming months. <a href="https://www.washingtonpost.com/world/national-security/trump-administration-to-end-provisional-residency-for-200000-salvadorans/2018/01/08/badfde90-f481-11e7-beb6-c8d48830c54d_story.html?utm_term=.932b10e020f8">Cancellation of protected status for the 50,000 Haitians</a> in the U.S. has been confirmed by the Trump administration, effective July 2019. It’s also announced that protected status for the nearly <a href="https://www.nytimes.com/2018/01/13/world/canada/quebec-immigrants-haitians.html">200,000 Salvadorians</a> living in the U.S. won’t be renewed either.</p>
<p>There’s little doubt those migrants are eyeing Canada.</p>
<p>But Canada is not prepared to accept everyone, despite Trudeau’s tweet. It ushered in the 25,000 Syrians shortly after his election, but after that it was back to business as usual, regardless that the <a href="http://edition.cnn.com/2015/09/11/world/syria-refugee-crisis-when-war-displaces-half-a-country/">scale of need was in the millions.</a></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/204611/original/file-20180202-162082-17e240o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/204611/original/file-20180202-162082-17e240o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=433&fit=crop&dpr=1 600w, https://images.theconversation.com/files/204611/original/file-20180202-162082-17e240o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=433&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/204611/original/file-20180202-162082-17e240o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=433&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/204611/original/file-20180202-162082-17e240o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=544&fit=crop&dpr=1 754w, https://images.theconversation.com/files/204611/original/file-20180202-162082-17e240o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=544&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/204611/original/file-20180202-162082-17e240o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=544&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Prime Minister Justin Trudeau coaches a youth soccer team formed by migrants and refugees at the Roma Soccer Club Stadium in Rome in May 2017 while he was in Italy for a G7 summit.</span>
<span class="attribution"><span class="source">(The Canadian Press/Sean Kilpatrick)</span></span>
</figcaption>
</figure>
<p>Far away from the world’s war zones, Canada has always been able to roll out the welcome mat when it wanted. That’s why closer to home, the asylum issue with the U.S. is causing serious concerns for the Trudeau government — it exposes the difference between the nationalist self-congratulation that the prime minister trades in, and what Canadians are willing to accept in practice. </p>
<p>Many countries aren’t so lucky. Consider, by comparison, the refugee situation for Germany as it existed in 2015. <a href="https://www.nbcnews.com/news/world/germany-grapples-integration-after-its-opening-borders-n810361">Some days, more than 10,000 Syrian refugees arrived</a> in Germany. Almost <a href="https://www.thelocal.de/20150907/over-10000-refugees-arrive-in-one-weekend">20,000 arrived</a> in one weekend, 10,000 in Munich alone. </p>
<p>Canada has not had to cope with such numbers. What’s more, Canada is tough on those lucky enough to arrive here. Since 2000, at least <a href="https://theconversation.com/migrants-are-dying-in-detention-centres-when-will-canada-act-87237">16 people have died</a> in Canada’s system of immigration detention centres.</p>
<p>And yet Trudeau continues to burnish his personal political image and to poke Canada’s greatest ally in the eye — most recently in Davos. </p>
<h2>A Trump snub?</h2>
<p>France’s <a href="https://www.cnbc.com/2017/07/16/macron-my-charm-offensive-may-soften-trumps-climate-stance.html">Emmanuel Macron</a> and China’s Xi Jinping have mounted apparently successful charm offensives to advance key priorities with Trump. Not Canada’s leader. Trudeau <a href="http://www.scmp.com/news/china/diplomacy-defence/article/2087518/10-minutes-xi-jinping-changed-donald-trumps-mind-north">did not bother to meet Trump</a> at the recent <a href="https://www.weforum.org/focus/davos-2018">Davos World Economic Forum</a> so that, he said, <a href="https://www.theglobeandmail.com/news/world/trudeau-defends-decision-to-not-seek-meeting-with-trump-in-davos/article37731758/">other leaders could have a chance</a>. </p>
<p>Some have pointed to Trudeau’s apparent charm offensive with Ivanka Trump as clever and strategic. In addition to <a href="https://www.ctvnews.ca/politics/canada-us-women-s-group-created-by-trudeau-ivanka-trump-issues-first-proposals-1.3763474">working with the president’s daughter</a> on issues facing women in the workplace, <a href="http://www.cbc.ca/news/canada/newfoundland-labrador/pm-justin-trudeau-1.4026218">he attended the Canadian Broadway</a> play, <em>Come From Away</em>, with her in March 2017. But the play itself was about <a href="https://www.nytimes.com/2017/03/15/theater/justin-trudeau-ivanka-trump-broadway-come-from-away.html">Canadian inclusiveness and support for foreigners in need</a>, not-so-subtly underscoring Trudeau’s criticism of Trump’s public policy. Is this a winning strategy?</p>
<p>For Trudeau, everything seems to be about glorifying Canada, and himself by extension. That’s not always in the best interests of Canada, but it is what Canada gets in abundance from its current prime minister. Harper, <a href="https://www.theglobeandmail.com/news/politics/obama-harper-dont-like-each-other-and-only-a-new-leader-can-thaw-relations/article21691812/">despite his private reservations about former president Barack Obama</a>, never publicly threw shade at his fellow leader.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/204618/original/file-20180202-162082-1hi8gsz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/204618/original/file-20180202-162082-1hi8gsz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=367&fit=crop&dpr=1 600w, https://images.theconversation.com/files/204618/original/file-20180202-162082-1hi8gsz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=367&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/204618/original/file-20180202-162082-1hi8gsz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=367&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/204618/original/file-20180202-162082-1hi8gsz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=461&fit=crop&dpr=1 754w, https://images.theconversation.com/files/204618/original/file-20180202-162082-1hi8gsz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=461&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/204618/original/file-20180202-162082-1hi8gsz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=461&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Former prime minister Stephen Harper speaks at a barbecue in Calgary in July 2015.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Larry MacDougal</span></span>
</figcaption>
</figure>
<p>Harper was less popular than Trudeau, but Canadians could count on him for one thing — not making his personal image on the global stage a top priority. What Trudeau says obviously appeals to Canadians. But do his actions back up his words? On Indigenous issues, on immigration, on welcoming refugees, the answer is no. Whether Canadians agreed or disagreed with Harper, his actions matched his words.</p>
<p>Trudeau almost has it all. He’s got that famous name. He’s got the central casting looks. He’s got the top job in Canada. The one thing he needs is for Canada and the world to regard him as human rights activist, because even when it disadvantages the national interest, that’s seemingly less important than his own personal interests — a far cry from Canada’s previous prime minister.</p><img src="https://counter.theconversation.com/content/90796/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grant Dawson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Prime Minister Justin Trudeau is making a political career out of burnishing his self-image and convincing the world he’s a human rights leader. Do his actions match his words?Grant Dawson, Assistant Professor of Social Science and International Politics, University of NottinghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/907322018-01-28T16:54:49Z2018-01-28T16:54:49ZViolent past, digital future: Angela Merkel’s remarks at Davos<figure><img src="https://images.theconversation.com/files/203616/original/file-20180127-100915-iv720x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Merkel after her address in Davos</span> <span class="attribution"><span class="source">AP Photo/Markus Schreiber</span></span></figcaption></figure><p>Two world wars and a genocide have a way of focusing the mind. </p>
<p>Maybe that’s why references to “lessons of the past” are almost ritualistic in addresses such as German Chancellor Angela Merkel’s to the World Economic Forum. Here’s how Merkel checked that box in Davos:</p>
<blockquote>
<p>“100 years after the end of the First World War, and with eyewitnesses to the Second World War dying off, we must ask: have we really learned from this history, or haven’t we?”</p>
</blockquote>
<p>In the era of Brexit, though, such statements are not just ritual. They are also a reminder that the European Union was created not to tweak trade measures or to massage monetary policies, but to make Europeans stop killing each other. As Merkel noted, the generations born after World War II will determine whether those lessons stick. Her implicit message was that the jury is still out. </p>
<p>Yet in Merkel’s remarks, the generational divide appeared most consequential not in attitudes toward the European Union or immigration, but rather in another context: digitalization.</p>
<h2>The postwar generations</h2>
<p>Merkel was born in 1954: a true representative of the postwar generation. Yet she appeared at Davos, as she does in so many international settings, as the staid senior counterpoint to France’s flashier President Emmanuel Macron, who was born in 1970. To express concern about “postwar generations” is not necessarily to hand elders the moral upper hand: Today’s seniors as well as young people are products of postwar Europe. </p>
<p>The economic challenges of an aging society are familiar in Europe. Fewer working people paying into the system, more retirees drawing from it. Yet Merkel also lamented another pitfall of an aging population – a lack of appetite for innovation, particularly in regard to digital technologies. Germany, Merkel bluntly said, is far behind the digital curve. Yet delaying digitization because seniors are comfortable without it is a disservice to younger generations. </p>
<p>Nevertheless, Merkel held, Europe has a critical role to play in shaping the digital future by navigating the issue of ownership of data. As she put it: In the United States, private firms have nearly uninhibited ownership of data; in China, the bodies collecting data and the state function almost as a single unit. Europe’s social market economy offers a middle way: a more just digital order built on a balance between private ownership and state control of data.</p>
<p>The “social market economy” does not just evoke Europe’s more generous welfare and labor policies. It is also a historical reference: a nod to the architects of postwar West Germany, who sought a middle way between free market capitalism and a state-planned economy. In the 1950s, memories of capitalism’s failure in the Great Depression, and its catastrophic political consequences, were close at hand. The equally frightening counterpart was the repressive, state-command economy of the USSR and its satellites. Now, Merkel seemed to say, the social market economy not only remains necessary: It should be a model for solving a distinctly 21st-century problem.</p>
<p>Germany’s concern for privacy is also a legacy of the past. During the Great Depression, social workers’ collection of information to assist with clients’ medical and mental health needs seemed like a good idea – until the Nazis got their hands on all those records. For decades after the war, West Germany took painstaking measures to protect citizens’ privacy. The state-run telephone company, for example, did not keep records of numbers dialed by customers lest someone, someday be tempted to use those records to track a private citizen’s telephoning habits. </p>
<p>That was all well and good as long as the state had a monopoly on telephone lines. </p>
<p>If older Germans show little appetite for full-bore digitalization, younger Germans are as quick to post selfies in an age of facial recognition technology as their U.S. counterparts. Germany maintains stricter privacy laws than many other states, but German industry complains that such laws hinder innovation. As Merkel put it, “The Europeans haven’t decided how we want to handle data, and there’s a great danger that we may be too slow, that the world may steamroll us as we conduct philosophical debates about the sovereignty of data.” </p>
<p>Merkel’s metaphoric eye-roll at “philosophical debate” evoked a popular stereotype of Europeans - but one with queasy associations. The Weimar-era Nazis and Communists mocked parliamentary democracy as an impotent debating society. They, by contrast, were parties of action.</p>
<p>Merkel is not criticizing parliamentary democracy. She’s trying to save it from a <a href="https://theconversation.com/merkels-challenge-governing-germany-in-an-age-of-rising-nationalism-84577">re-emergent radical right</a>. But in an era when firms like Google are more powerful than most states on the planet, liberal democracy faces a threat that is at least as potent as xenophobic political parties: preservation of the rights of the individual if individuals’ data is the property of private corporations or the state. </p>
<p>Merkel’s – and Europe’s – quandary is this: how to move forward in the digital age when Europe’s contribution is to seek balance between state power, individual rights and the dynamism of capitalism. Achieving that balance – achieving any balance – means slowing things down. It means philosophizing.</p>
<p>And so the question at hand may not be: Will postwar generations remember the lessons of the 20th century? Rather, the real question may be: Is this history an adequate guide to our present-day circumstances? And if it isn’t, can Germany, Europe or some other actor find an alternative in time to save us from the privacy-wrecking options already in play?</p><img src="https://counter.theconversation.com/content/90732/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Elizabeth Heineman does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Will young Germans remember their history – and will older German embrace the digital future?Elizabeth Heineman, Professor of History and Gender, Women's, and Sexuality Studies, University of IowaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/907442018-01-27T02:38:40Z2018-01-27T02:38:40ZMacron calls for a ‘global contract’ at Davos<figure><img src="https://images.theconversation.com/files/203564/original/file-20180126-100926-h3klf3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Macron in Davos on Jan. 24, 2018, where he argued that economic growth wasn't an end in itself.</span> <span class="attribution"><span class="source">AP Photo/Markus Schreiber</span></span></figcaption></figure><p>French President Emmanuel Macron’s speech at the World Economic Forum in Davos on Jan. 24 called for nation-states and businesses to join in a “true global contract” to invest in human capital, and meet the challenges of terrorism and climate change.</p>
<p>“Globalization is undergoing a major crisis,” Macron said, “and this enormous challenge requires a collective effort.”</p>
<hr>
<iframe src="https://webcasts.weforum.org/widget/1/davos2018?p=1&pi=1&th=1&hl=english&id=a0W0X00000BRhbQUAT" height="480px" frameborder="0" scrolling="no" width="100%"></iframe>
<h2>A ‘cultural shift’</h2>
<p>In terms of domestic policy, Macron proclaimed France’s commitment to creating a business-friendly environment. Speaking in English for the first 20 minutes of his speech, he declared “France is back!” This was an implicit challenge to the United States, which under President Donald Trump has threatened to ignite a trade war by <a href="http://www.cnn.com/2017/08/28/politics/trump-china-tariffs/index.html">implementing costly protective tariffs</a>.</p>
<p>Macron’s domestic program is also a repudiation of France’s long-standing commitment to social protection and a regulated form of capitalism. France’s postwar policies, he said, produced a nation in which companies were both “forbidden to fail” and “forbidden to succeed.”</p>
<p>Macron’s economic reforms aim to improve French productivity and competitiveness by encouraging a more flexible labor market, essentially by making it easier for firms to fire their employees. In the past, French governments have hesitated to push such reforms, because of the <a href="https://www.economist.com/blogs/economist-explains/2014/03/economist-explains-15">long-standing power of French unions</a>. Macron appears to believe that his <a href="https://www.nytimes.com/2017/05/07/world/europe/emmanuel-macron-france-election-marine-le-pen.html">decisive defeat</a> of both the candidates of the left and the right in last year’s presidential election gives him more leverage in this fight than his predecessors François Hollande and Nicolas Sarkozy.</p>
<p>Macron also boasted of a “cultural shift” taking place in France. No longer would the French government assume that adjusting social inequalities with tax policy and job protections was enough. He promised instead that his government would address the fundamental causes of inequality, rather than simply try to “correct” it with taxpayer money. Significantly, his speech gave no specifics on how he would accomplish this, beyond his general enthusiasm for economic growth.</p>
<h2>En Français</h2>
<p>Switching to French, Macron made a very different argument about the global economy. Economic growth, he stated, can never be an end in itself. A world where all nations compete against one another has led to an unsustainable Darwinian struggle, a race to the bottom. Short-term profits accrue to the few. The distribution of wealth in the world is increasingly unjust.</p>
<p>Macron pointed out that a commitment to growth at all costs creates serious divisions within nations. New technologies and the disproportionate growth and power of the financial sector have created winners and losers in every country. The “nomadic” and talented few who are able to adapt to the new economy move easily from New York to London to Tokyo and back, Macron suggested. Many more cannot adapt and are left behind.</p>
<p>In this way, Macron argued, democracies are corroded from within, providing fertile ground for nationalists whose only solution is to turn inward and close the borders against the world. Populist parties in Europe and North America blame globalization for all their problems. Their leaders pull out of international agreements at precisely the moment when cooperative efforts are most needed. Macron did not name names in his speech, but the audience at Davos certainly understood the reference: Trump’s <a href="https://www.forbes.com/sites/phillevy/2018/01/22/the-nafta-withdrawal-threat-is-real/#b30b82b6458c">attacks on NAFTA</a> and the Trans-Pacific Partnership; British <a href="https://theconversation.com/brexit-is-on-britain-votes-to-leave-the-eu-experts-respond-61576">voters opting for Brexit</a>; and France’s <a href="https://www.nytimes.com/2017/01/23/us/politics/tpp-trump-trade-nafta.html">own National Front calling</a> for the French to leave the EU.</p>
<p>For Macron this is the danger of the present moment: a relapse into a sterile nationalism that is incapable of addressing the real challenges posed by the present. </p>
<h2>Three obligations</h2>
<p>Macron called for a “true global contract” that rests on three obligations that fall equally on nation-states, their populations and private businesses. </p>
<p>The first is the “duty to invest,” particularly in the education of young women in developing countries. </p>
<p>The second obligation is the “duty to share” both the profits and costs that accompany the new economy. </p>
<p>Finally, Macron insisted that the global contract implies a collective “duty to protect.” The challenges of terrorism, large-scale migrations and climate change can only be met with a collective, multilateral effort. </p>
<p>Macron’s global contract sounds eerily like the promises of the postwar European welfare states: Invest in human capital through subsidies of education, redistribute the value generated by capitalism to all participants in the global economy, and protect the vulnerable through multilateral and cooperative policies that involve both states and the private sector. </p>
<p>The difference, of course, is that France’s older social model depended on a strong state to mediate the clash of interests between employers and labor. His “global contract” is a form of multilateralism that includes both states and nonstate actors. It lacks a mediating force to insist that everybody play by the rules.</p>
<p>Macron’s hope is that a united Europe might play this mediating role. A democratic Europe might thread the needle between the unregulated capitalism often endorsed by the United States and the statist and anti-democratic model provided by China. It’s a compelling vision, but even the optimists will admit that it is easier to see the paths that lead to failure than to success. Macron understands the stakes — but seems to see no other option.</p><img src="https://counter.theconversation.com/content/90744/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joshua Cole does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>French companies will no longer be ‘forbidden to fail’ and ‘forbidden to succeed,’ the French president tells the World Economic Forum.Joshua Cole, Professor of History, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/907912018-01-26T22:41:50Z2018-01-26T22:41:50ZDavos grapples with inequality<figure><img src="https://images.theconversation.com/files/203613/original/file-20180126-100915-15snula.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">This year's World Economic Forum in Davos honored musician and philanthropist Elton John for his contributions to upholding 'human dignity.'</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Switzerland-Davos-Forum/4a9f06c411d64f8ba9ad4796eb88b2d5/2/0">AP Photo/Markus Schreiber</a></span></figcaption></figure><p>In accepting an award for his efforts to “<a href="https://www.weforum.org/agenda/2018/01/meet-the-2018-crystal-awardees/">uphold human dignity</a>” at the 2018 World Economic Forum, musician and philanthropist <a href="https://www.msn.com/en-gb/entertainment/celebrity/davos-2018-elton-john-blasts-disgraceful-inequality-as-he-picks-up-human-rights-crystal-award/ar-AAv2E6W">Elton John</a> decried economic inequality as “disgraceful.” Panelists at the invitation-only conference in Davos, Switzerland, hashed over inequality in line with its theme of “<a href="http://www3.weforum.org/docs/WEF_AM18_Overview.pdf">Creating a Shared Future in a Fractured World</a>.”</p>
<p>And in a report released to coincide with the elite confab, the charity <a href="https://www.oxfam.org/en/pressroom/pressreleases/2018-01-22/richest-1-percent-bagged-82-percent-wealth-created-last-year">Oxfam reported</a> that 82 percent of the wealth created globally last year went to the top 1 percent while the bottom half of humanity, 3.7 billion people, saw absolutely no gains in their wealth.</p>
<p>Over my decades of research and experience as a clinical law professor representing low-income clients, I have seen not only the effects of economic inequality, but also the importance of the perspectives of those most affected. I believe that until the drivers and dishwashers toiling in the chalets at Davos – along with their working brothers and sisters across the globe – get the microphones and push the levers of policy, economic inequality is likely to persist and perhaps <a href="https://www.washingtonpost.com/news/wonk/wp/2018/01/04/massive-new-data-set-suggests-inequality-is-about-to-get-even-worse/">get worse</a>. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"955563480756625409"}"></div></p>
<h2>Fear and fretting at Davos</h2>
<p>The global elites at Davos are paying attention. They worry that inequality is driving the sort of <a href="https://www.washingtonpost.com/business/economy/ahead-of-davos-even-the-1-percent-worry-about-inequality/2018/01/21/551392d0-fd2f-11e7-ad8c-ecbb62019393_story.html?utm_term=.0e70260c338a">political populism</a> that landed Donald Trump in office. His nationalistic “<a href="https://newrepublic.com/article/146571/donald-trump-davos-man">America-First” philosophy</a> runs contrary to the Davos dogma of globalization, economic integration, and free trade.</p>
<p>In addition, a growing number of business leaders are realizing that if they <a href="https://theconversation.com/how-corporate-america-can-curb-income-inequality-and-make-more-money-too-62339">do not share</a> the economic pie, there will be no one left who can afford the goods and services that drive corporate profits.</p>
<p>However, if you asked the average worker about economic inequality, you would likely hear a set of different concerns.</p>
<p>To begin with, economic inequality is unfair. Most citizens of Western democracies support capitalism. They believe that talent and hard work should beget monetary rewards. But their work ethic is not paying off. In America, since the mid-1970s, worker productivity has grown <a href="https://www.epi.org/productivity-pay-gap/">six times faster</a> than wages. </p>
<p><iframe id="Fy3k0" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/Fy3k0/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>What meritocracy?</h2>
<p>Meanwhile, the rich are amassing their fortunes from <a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2018/sessions/how-is-rentier-capitalism-aggravating-inequality">sources other than work</a>, such as investments and property ownership, which they then pass on to their heirs. For Wall Street executives, pay is often unmoored to actual performance, yet they earn <a href="http://fortune.com/2017/07/20/ceo-pay-ratio-2016/">271 times more</a> than their workers. </p>
<p>Middle-class parents in the United States can no longer count on their children out-earning them. Only half of U.S. workers <a href="https://www.nytimes.com/2016/12/08/opinion/the-american-dream-quantified-at-last.html">born in 1980</a> earn as much as their parents did at the same age, economist Paul Krugman, a New York Times columnist, has observed.</p>
<p>What’s more, <a href="http://www.pewtrusts.org/%7E/media/legacy/uploadedfiles/pcs_assets/2012/pursuingamericandreampdf.pdf">40 percent</a> of the people born at the bottom rung of the income ladder remain there throughout their lives. The same stickiness exists at the top quintile, meaning that who your parents are often determines where you end up economically. For many people, this reality renders the national faith in an American work-hard-and-rise meritocracy <a href="https://www.newyorker.com/magazine/2014/03/03/the-mobility-myth">a myth</a>.</p>
<p>If asked, average American <a href="https://economix.blogs.nytimes.com/2013/03/08/the-rise-of-part-time-work/">workers probably want full-time</a> employment with <a href="https://www.theatlantic.com/business/archive/2015/04/the-very-real-hardship-of-unpredictable-work-schedules/390498/">predictable schedules</a>. They surely want paid family leave <a href="https://www.urban.org/sites/default/files/publication/90201/paid_family_leave_0.pdf">(like every other developed nation guarantees)</a>, along with <a href="http://cepr.net/documents/publications/psd-summary.pdf">paid sick leave</a>, <a href="https://www.npr.org/2016/10/22/498590650/u-s-parents-are-sweating-and-hustling-to-pay-for-child-care">affordable child care</a> and <a href="https://www.kff.org/other/state-indicator/percent-of-firms-offering-coverage/">health insurance</a>.</p>
<p>Economic inequality is also <a href="https://www.equalitytrust.org.uk/resources/the-spirit-level">correlated with</a> a range of societal dysfunctions, including poor physical and mental health, increased maternal and child mortality, lower educational attainment, high levels of crime and incarceration and shorter lifespans. These social ills not only reduce productivity, they are costly to combat.</p>
<h2>Beholden politicians</h2>
<p>Yet politicians have little incentive to tackle these problems because they are beholden to the interests of their donors. Studies show that politicians implement <a href="http://faculty.wcas.northwestern.edu/%7Ejnd260/cab/CAB2012%20-%20Page1.pdf">policies favored</a> by the wealthy. Our lawmakers know little about the struggles of the average person because they usually come from the <a href="http://people.duke.edu/%7Enwc8/Carnes_StatesPowerAndSociety.pdf">elite classes</a> themselves.</p>
<p>The <a href="http://www.scotusblog.com/case-files/cases/citizens-united-v-federal-election-commission/">Supreme Court</a> has ruled that political spending by corporations and lobbyists and other <a href="https://www.opensecrets.org/outsidespending/">outside groups</a> <a href="https://www.opensecrets.org/news/2017/02/outside-groups-spent-more-than-candidates-in-27-races-often-by-huge-amounts/">can’t be meaningfully restrained</a>. Mega-rich donors are <a href="https://www.opensecrets.org/news/2017/01/citizens-united-7-years-later/">spending lavishly</a> on elections, thus ensuring an outsized influence in policies. </p>
<p>Not surprisingly, the rich are winning big.</p>
<p>One example: About <a href="http://www.taxpolicycenter.org/publications/distributional-analysis-conference-agreement-tax-cuts-and-jobs-act/full">83 percent</a> of the new tax law’s economic benefits will flow to the wealthiest 1 percent of Americans. Meanwhile, it’s expected that the GOP will seek to pay for these tax cuts on the <a href="https://theconversation.com/3-myths-about-the-poor-that-republicans-are-using-to-support-slashing-us-safety-net-89048">backs of the poor</a>, by slashing spending on safety net mainstays such as <a href="https://theconversation.com/medicaid-work-requirements-could-cost-the-government-more-in-the-long-run-90080">Medicaid</a> and <a href="https://theconversation.com/3-myths-about-the-poor-that-republicans-are-using-to-support-slashing-us-safety-net-89048">food stamps</a>.</p>
<p>If the financial and political elite who gather in Davos really want to understand and solve economic inequality, they need to leave the ski resort and include the voices and concerns of everyone who doesn’t get to go there.</p><img src="https://counter.theconversation.com/content/90791/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michele Gilman is affiliated with the ACLU of Maryland and the Women's Law Center of Maryland.</span></em></p>The global elites are paying attention.Michele Gilman, Venable Professor of Law, University of BaltimoreLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/905482018-01-23T14:54:47Z2018-01-23T14:54:47ZWhy shaking up South Africa’s power utility matters for the economy<figure><img src="https://images.theconversation.com/files/203050/original/file-20180123-182973-1b61qkn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Cyril Ramaphosa, South Africa's deputy president who was recently elected as the leader of ruling party, is seen to be fighting corruption.</span> <span class="attribution"><span class="source">EPA</span></span></figcaption></figure><p><em>South Africa’s power utility Eskom has seen a remarkable leadership shake up in the past few days. Almost the entire board has been replaced with seasoned businessmen. And a well respected acting CEO has been put in place, too. The developments appear to reflect resolve by the country’s deputy president Cyril Ramaphosa, who was elected as president of the African National Congress in December. Sibonelo Radebe asked Jannie Rossouw to discuss what the changes at Eskom mean.</em></p>
<p><strong>What do you make of the shake up at Eskom?</strong></p>
<p>The announcement of a <a href="https://www.enca.com/south-africa/eskom-appoints-new-board">new board at Eskom</a> is welcome for a number of reasons. </p>
<p>Firstly, the previous board and top executive layer proved to be incompetent if not downright destructive. Secondly, the power utility had sunk into dire <a href="https://www.fin24.com/Economy/Eskom/eskom-could-collapse-sa-economy-warns-gigaba-20180118">financial difficulties</a> on their watch. Recent reports suggested that the power utility has <a href="https://www.fin24.com/Economy/Eskom/exclusive-eskoms-cash-dries-up-20171113-2">run out of funds</a> and wouldn’t be able to meet its obligations unless government stepped in with another huge bailout. This, after the government <a href="https://www.ujuh.co.za/brian-molefe-the-ceo-of-south-africas-power-utility-is-overrated/">injected</a> R23 billion in equity and and wrote off about R60 billion over the past five years.</p>
<p>Over the past five years or so, Eskom has been hit by a series of corporate governance breaches of the worst kind. These included the former CEO Brian Molefe trying to secure a <a href="http://www.702.co.za/articles/265740/public-protector-to-probe-brian-molefe-s-r30-million-pension-pay-out">R30 million payout</a> for only 18 months at the helm.</p>
<p>And it’s become clear from the <a href="http://amabhungane.co.za/article/2017-06-09-guptaleaks-how-eskom-was-captured">Gupta leaks</a> that the power utility had come to play a central role in a raft of activities related to state capture. It appears to have served as <a href="https://www.ujuh.co.za/state-of-capture-public-protectors-report/">a conduit to transfer government resources</a> to well-connected and corrupt individuals and families in South Africa.</p>
<p>Given the damage that’s been done, the previous board at Eskom simply could not continue. It had <a href="http://ewn.co.za/2018/01/18/gigaba-treasury-can-t-afford-more-eskom-bailouts">no plan</a> to turn the company around or stop corruption. Its only strategy was to lean on the South African government for more financial assistance.</p>
<p>The Eskom shake up is also significant because it’s a signal that the new president of the ANC Cyril Ramaphosa is committed to fighting <a href="http://ewn.co.za/2018/01/19/ramaphosa-we-re-dead-serious-about-addressing-corruption">corruption</a> in both the public and private sectors.</p>
<p><strong>Why does Eskom matter?</strong> </p>
<p>Eskom is arguably South Africa’s most important state owned enterprise. The South African economy depends on continuous and uninterrupted power supply. This puts Eskom in a different league to other embattled state owned enterprises like the national airline, South African Airways (SAA).</p>
<p>SAA is also dependent on government <a href="https://www.fin24.com/Economy/live-out-of-cash-saa-faces-parliament-20170804">bailouts</a>, but the South African economy will continue to function without it. Eskom, on the other hand, is a monopoly power supplier. All South Africans depend on it for power. </p>
<p><strong>There seems to have been an urgency to make changes. Why?</strong></p>
<p>It seems that Ramaphosa moved quickly to wrap up the Eskom shake up before he left for the World Economic Forum in Davos. It’s not difficult to understand why. South Africa has had some very bad headlines over the past few years, including downgrades by international rating agencies, and its economy is in the doldrums. </p>
<p>A significant portion of South Africa’s economic pressure originates from declining confidence of local and international investors in the country’s economy. This is evident from the South African <a href="https://tradingeconomics.com/south-africa/business-confidence">business confidence index</a>, which has plummeted. Since 2013 business confidence has been on a declining trend from above 50 to a current level below 35.</p>
<p>Replacing the Eskom board before the Davos meeting was a smart and necessary move. Davos is a rare occasion to showcase South Africa as an investment destination of choice for international investors. One condition for attracting international investment is a clear commitment to addressing corruption and instilling sound management in government enterprises.</p>
<p><strong>What in your view is the long term solution around Eskom?</strong></p>
<p>The long term solution to the problems at Eskom and other troubled state owned enterprises is a rethink of their role in the South African economy. </p>
<p>Some, such as South African Airways, are really unimportant and their disposal or even their closure would have little impact on the domestic economy. Disposal or closure are necessary options as these entities add an unnecessary burden on the national fiscus.</p>
<p>But others, like Eskom, are more strategic and matter enormously and the government should retain them. </p>
<p>It has also become necessary for South Africa to rethink the <a href="https://businesstech.co.za/news/wealth/194164/ceo-vs-employee-salaries-at-eskom-saa-and-other-state-companies/">remuneration policies</a> for executives of state owned enterprises. They earn salaries that aren’t commensurate with the risks they face. The consequences of failure are much more severe for executives in the private sector. Executives of state owned enterprises simply apply for bailouts when they’re in trouble. </p>
<p>So there’s no justification for exorbitant remuneration at state owned enterprises. And no executive at any state owned enterprise should get a bonus: how can a bonus be justified when the South African government provides the bailout in the event of financial difficulty?</p>
<p>The new Eskom board should urgently revise the company’s remuneration policy to restore some sanity in the level of remuneration. The board should also review business practices to ensure that Eskom remains financially viable without any financial assistance from the government.</p>
<p>It is also important that the South African government and the board of Eskom should make it clear to the general public and to investors that the proposed <a href="https://awethu.amandla.mobi/petitions/campaign-for-a-just-energy-future?gclid=EAIaIQobChMI58iX0pnu2AIVzr_tCh3WcwUoEAAYASAAEgLYwfD_BwE">nuclear procurement project</a> plan will not go ahead: neither the South African fiscus nor Eskom can afford such a project.</p><img src="https://counter.theconversation.com/content/90548/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jannie Rossouw is a NRF C3-rated researcher and receives funding from the NRF. </span></em></p>The shake up at South Africa’s power utility, Eskom, sends a good signal about where Cyril Ramaphosa is taking the country.Jannie Rossouw, Head of School of Economic & Business Sciences, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/900752018-01-22T11:29:35Z2018-01-22T11:29:35ZTrump goes to Davos: 4 books he should read on first trip to gathering of global elites<figure><img src="https://images.theconversation.com/files/202727/original/file-20180122-110100-xro742.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">This unassuming, snowy town becomes home to the global elite for a few days each year. </span> <span class="attribution"><span class="source">AP Photo/Markus Schreiber</span></span></figcaption></figure><p>For the first time <a href="http://money.cnn.com/2000/01/29/economy/davos_clinton/">since 2000</a>, a sitting American president <a href="https://www.ft.com/content/a3d696b4-f565-11e7-88f7-5465a6ce1a00">is attending</a> the World Economic Forum’s annual meeting, which takes place in Davos, Switzerland, from Jan. 23-26. </p>
<p>The invitation-only gathering is basically a who’s who of the global elite: business heads, current and past world leaders, well-connected celebrities and academics. They make business deals in hallway meetings and at parties and hobnob in program sessions that seek to tackle global problems such as <a href="https://www.thesun.co.uk/news/2619213/the-richest-eight-tycoons-on-the-planet-are-worth-as-much-as-the-poorest-3-6-billion-people-oxfam-claims/">poverty</a>, <a href="https://www.weforum.org/agenda/2007/01/climate_change_/">climate change</a> and <a href="https://www.theguardian.com/business/2016/jan/22/refugee-crisis-dominates-downbeat-davos-2016">refugee crises</a>.</p>
<p>In many ways, the Davos crowd and its interests are the epitome of what Donald Trump’s populist base reviles. Although the Davos neophyte is wealthy and powerful like many of the other attendees, Trump with his coarse manners and protectionist policies may find an unsympathetic audience.</p>
<p>Davos, already an inherent contradiction of elites purporting to change the world from which they have profited, will become even more of a paradox with Trump’s attendance. As such, the American president could surely use a primer on the gathering to prepare him for the <a href="https://www.japantimes.co.jp/news/2018/01/20/world/politics-diplomacy-world/trumps-trip-davos-sets-clash-cultures/">clashes sure to come</a>. </p>
<p>As a business and humanities <a href="https://link.springer.com/article/10.1007/s10551-017-3538-y">scholar</a> who has seen Davos <a href="https://www.huffingtonpost.com/christopher-michaelson-phd/davos-2012_b_1245312.html">up close</a>, I recommend he pack four books for his transatlantic flight, as a strange but sure way to diminish his culture shock.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/202725/original/file-20180122-110097-1mzxsc4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/202725/original/file-20180122-110097-1mzxsc4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/202725/original/file-20180122-110097-1mzxsc4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/202725/original/file-20180122-110097-1mzxsc4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/202725/original/file-20180122-110097-1mzxsc4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/202725/original/file-20180122-110097-1mzxsc4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/202725/original/file-20180122-110097-1mzxsc4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Klaus Schwab is deferentially known as ‘Professor Schwab.’</span>
<span class="attribution"><span class="source">AP Photo/Markus Schreiber</span></span>
</figcaption>
</figure>
<h2>Sanatorium for the elite</h2>
<p>Before the mountainside village of Davos became synonymous with the most powerful networking meeting in the world, it was more well-known as a destination for respite from ailments acquired in the world below. </p>
<p>Thomas Mann’s 1924 novel “<a href="https://www.penguinrandomhouse.com/books/107311/the-magic-mountain-by-thomas-mann/">The Magic Mountain</a>,” in which a German travels to a sanatorium in Davos intending to visit a cousin for a few weeks but ends up staying seven years, provides an apt metaphor for the World Economic Forum.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/202747/original/file-20180122-110106-iew0ox.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/202747/original/file-20180122-110106-iew0ox.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=956&fit=crop&dpr=1 600w, https://images.theconversation.com/files/202747/original/file-20180122-110106-iew0ox.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=956&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/202747/original/file-20180122-110106-iew0ox.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=956&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/202747/original/file-20180122-110106-iew0ox.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1202&fit=crop&dpr=1 754w, https://images.theconversation.com/files/202747/original/file-20180122-110106-iew0ox.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1202&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/202747/original/file-20180122-110106-iew0ox.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1202&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>Just as the man is convinced that only the rarefied air of the Alps – far from the cares and concerns of his regular life – can cure his apparent ailments, the forum operates in a similar way, with the elites gathering in former sanatoriums turned luxury hotels to dissect and diagnose the problems of the world below. </p>
<p>Founder and Executive Chairman Klaus Schwab convened the first gathering of what was then known as the European Management Forum in 1971, drawing around 500 business leaders and academics to Davos to free them from the distractions of the day-to-day world. This year, more than 3,000 <a href="https://www.weforum.org/agenda/2018/01/whos-coming-to-davos-2018/">participants</a> are expected to show up.</p>
<p>Mann’s literary masterpiece should remind Trump that the confines of exclusive settings like Davos, the White House and his beloved Mar-a-Lago both literally and figuratively isolate decison-makers from the very people whose problems they are ostensibly trying to solve.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/202728/original/file-20180122-110103-htqjnu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/202728/original/file-20180122-110103-htqjnu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/202728/original/file-20180122-110103-htqjnu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/202728/original/file-20180122-110103-htqjnu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/202728/original/file-20180122-110103-htqjnu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/202728/original/file-20180122-110103-htqjnu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/202728/original/file-20180122-110103-htqjnu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Davos used to be know primarily for its sanatoriums. Many have now become luxury hotels, such as the Hotel Schatzalp.</span>
</figcaption>
</figure>
<h2>Capitalism and power</h2>
<p>While the forum’s <a href="https://www.weforum.org/about/history">original goal</a> was to introduce U.S. management practices to European executives, it quickly began to promote a theory of business sharply at odds with the American focus on <a href="http://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html">maximizing stockholder wealth</a>.</p>
<p>This 20th-century form of capitalism perhaps can be best summed up by four books deemed by some, including <a href="https://weforum2010.sched.com/event/3b4o/reading-leaders-minds">at least one panel of Davos participants</a>, as “classics of business literature”: Niccolo Machiavelli’s “<a href="https://www.gutenberg.org/files/1232/1232-h/1232-h.htm">The Prince</a>,” Sun Tzu’s “<a href="http://classics.mit.edu/Tzu/artwar.html">The Art of War</a>,” Adam Smith’s “<a href="http://www.econlib.org/library/Smith/smWN.html">The Wealth of Nations</a>” and Charles Darwin’s “<a href="http://darwin-online.org.uk/EditorialIntroductions/Freeman_OntheOriginofSpecies.html">On the Origin of Species</a>.”</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/202748/original/file-20180122-110081-10fjibf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/202748/original/file-20180122-110081-10fjibf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=907&fit=crop&dpr=1 600w, https://images.theconversation.com/files/202748/original/file-20180122-110081-10fjibf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=907&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/202748/original/file-20180122-110081-10fjibf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=907&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/202748/original/file-20180122-110081-10fjibf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1140&fit=crop&dpr=1 754w, https://images.theconversation.com/files/202748/original/file-20180122-110081-10fjibf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1140&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/202748/original/file-20180122-110081-10fjibf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1140&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>This survival-of-the-fittest vision of business evokes Trump’s <a href="https://www.politico.com/story/2016/09/trump-housing-collapse-228708">own economic thesis</a> and policies, such as <a href="https://www.politico.com/story/2016/09/trump-housing-collapse-228708">when he said</a>, “hoping for a housing collapse is just smart business sense.” In this view, capitalism is about predator and prey, powerful and the powerless. </p>
<p>In contrast, “Professor Schwab” – as he is deferentially called – was an early proponent of what is known as <a href="http://stakeholdertheory.org/">stakeholder capitalism</a>. This theory considers businesses <a href="https://www.foreignaffairs.com/articles/2008-01-01/global-corporate-citizenship">corporate citizens</a> that earn their license to operate by serving social prosperity and working with government, and <a href="https://widgets.weforum.org/history/1973.html">by 1973</a> had become the “Davos manifesto.”</p>
<p>A novel that could help Trump begin to see the purpose of capitalism and power in a new light would be “<a href="https://www.jstor.org/stable/41445156">The Reluctant Fundamentalist</a>” by Mohsin Hamid. Set around 9/11, it’s a suspenseful depiction of a meeting between an unidentified American and a Pakistani man who has become disaffected with the U.S. The novel raises uncomfortable questions about how capitalist predators who abuse their power risk becoming the prey of social upheaval and terrorism.</p>
<h2>Status symbols</h2>
<p>The broad stakeholder focus of Davos shows that at its heart, it aims to promote an inclusive brand of economics and politics. So how can it stay true to this mission when everything else about the event – its admission criteria, its hospitality and even its remote location – is about as exclusive as you can get? </p>
<p>That irony is made plainly visible by the Forum’s complex badging system. The badges that attendees wear reinforce a strict social <a href="http://blogs.reuters.com/felix-salmon/2012/01/19/davoss-status-levels/">hierarchy</a> that smacks of the very castes that the gathering’s agitation against <a href="https://www.weforum.org/agenda/archive/inequality/">inequality</a> and other economic ills seems intended to diminish.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/202749/original/file-20180122-110094-9jm0mu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/202749/original/file-20180122-110094-9jm0mu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=818&fit=crop&dpr=1 600w, https://images.theconversation.com/files/202749/original/file-20180122-110094-9jm0mu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=818&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/202749/original/file-20180122-110094-9jm0mu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=818&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/202749/original/file-20180122-110094-9jm0mu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1028&fit=crop&dpr=1 754w, https://images.theconversation.com/files/202749/original/file-20180122-110094-9jm0mu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1028&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/202749/original/file-20180122-110094-9jm0mu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1028&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>Davos is a social science laboratory of who’s “in.” You are your badge, the colors of which enable other delegates to judge whether or not you are worth talking to. In a world of elites, white-with-blue badges are a nose above the rest.</p>
<p>The badges on participants’ bellies function like the stars in Dr. Seuss’ “<a href="http://seuss.wikia.com/wiki/The_Sneetches">The Sneetches</a>.” In the children’s book, some of the bird-like creatures who inhabit the world have green stars while others do not. Those with stars discriminate against the ones without until the latter get tattoos that make them all equal. Miffed at their loss in status, the ones born with the stars have them removed to regain their elitism.</p>
<p>The picture book conveys in a compelling way the absurdity of status symbols, <a href="https://www.bloomberg.com/view/articles/2017-07-19/trump-cares-about-looking-good-not-doing-good">something</a> the president <a href="http://www.cnn.com/2016/11/25/opinions/what-does-trump-care-about-dantonio/index.html">tends to care about a lot</a>. “The Sneetches” shows how these superficial and arbitrary caste systems may do more to reinforce the problems of existing hierarchies than to change and fix them.</p>
<h2>‘America first’ and the powerless</h2>
<p>Trump’s press secretary <a href="http://www.cnn.com/2018/01/09/politics/president-donald-trump-davos/index.html">characterized</a> his decision to attend the meeting as a chance “to advance his <a href="https://theconversation.com/trumps-america-first-echoes-from-1940s-59579">America first</a> agenda with world leaders.” </p>
<p>Such rhetoric – and the <a href="https://www.washingtonpost.com/world/a-year-of-trumps-america-first-agenda-has-radically-changed-the-us-role-in-the-world/2018/01/20/c1258aa6-f7cf-11e7-9af7-a50bc3300042_story.html">inward-looking nativist policies</a> that have resulted – is diametrically opposed to <a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2018">Davos’ theme</a> this year, “Creating a Shared Future in a Fractured World,” which criticizes “divisive narratives” and a disregard for “shared obligations.”</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/202750/original/file-20180122-110113-e8fdgr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/202750/original/file-20180122-110113-e8fdgr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=914&fit=crop&dpr=1 600w, https://images.theconversation.com/files/202750/original/file-20180122-110113-e8fdgr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=914&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/202750/original/file-20180122-110113-e8fdgr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=914&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/202750/original/file-20180122-110113-e8fdgr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1149&fit=crop&dpr=1 754w, https://images.theconversation.com/files/202750/original/file-20180122-110113-e8fdgr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1149&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/202750/original/file-20180122-110113-e8fdgr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1149&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>In the spirit of sharing, if I could choose one more book for Trump to read on the trip, it might be Imbolo Mbue’s 2016 novel, “<a href="https://www.penguinrandomhouse.com/books/251547/behold-the-dreamers-oprahs-book-club-by-imbolo-mbue/9780525509714/">Behold the Dreamers</a>.” The story is about a Cameroonian immigrant who becomes a chauffeur for a Lehman Brothers banker shortly before the bank’s – and the financial system’s – collapse. </p>
<p>It reinforces the three key ethical lessons that the other items on the reading list introduce while offering a fourth: that America is as dependent upon the work of new immigrants as it is on the old money of Wall Street bankers. By reading “Behold the Dreamers,” Trump may learn that immigration should be a negotiation among equally worthy and human parties, not the <a href="https://www.washingtonpost.com/politics/trump-attacks-protections-for-immigrants-from-shithole-countries-in-oval-office-meeting/2018/01/11/bfc0725c-f711-11e7-91af-31ac729add94_story.html?utm_term=.3494fd2e543a">powerful wielding authority</a> over the vulnerable.</p>
<p>If only Trump could get over his <a href="https://newrepublic.com/minutes/133566/donald-trump-doesnt-read-books">distaste for books</a> and read them.</p><img src="https://counter.theconversation.com/content/90075/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Michaelson does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A business and humanities scholar advises the president to pack three novels and a children’s story for his long transatlantic flight to Switzerland aboard Air Force One.Christopher Michaelson, Professor of Ethics and Business Law, University of St. ThomasLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/901102018-01-18T19:16:50Z2018-01-18T19:16:50ZVital Signs: jobs may be increasing but the real test is whether we get a pay rise this year<figure><img src="https://images.theconversation.com/files/202393/original/file-20180118-122906-1d4n43s.png?ixlib=rb-1.1.0&rect=0%2C13%2C4491%2C2794&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The latest data shows a big jump in jobs, but construction is slowing</span> </figcaption></figure><p><em>Vital Signs is a weekly economic wrap from UNSW economics professor and Harvard PhD Richard Holden (@profholden). Vital Signs aims to contextualise weekly economic events and cut through the noise of the data affecting global economies.</em></p>
<p><em>This week: explaining why the number of jobs increased while the unemployment rate rose too and a bump in housing finance due to state government incentives.</em></p>
<hr>
<p><iframe id="Hm03p" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/Hm03p/4/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>The most consequential Australian data this week were Thursday’s labour force figures. <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0">The ABS</a> announced that employment grew by 34,700, well ahead of market expectations of around 15,000. It was the first calendar year in which employment grew every month since the ABS recorded monthly data in 1978.</p>
<p>The trend toward full-time employment continued to be the key contributor. In 2017 full-time employment increased by 322,000 out of the 393,000 total increase. As often happens, the rosier employment numbers were accompanied by a seemingly confusing increase in the unemployment rate to 5.5%. </p>
<p>This occurs because a better labour market leads to more people looking for work. On that point, the participation rate stood at 65.5% - the highest rate since early 2011. Importantly, female labour-force participation was at a record high 60.4%.</p>
<p>Regular readers of Vital Signs will know what’s coming next. Despite this strong employment growth, wages remain stagnant in real terms. Perhaps they key economic variable in 2018 - and surely the key political variable - is whether we start to see stronger wage growth. The government’s “jobs and growth” slogan doesn’t sound so great if the jobs involve declines in real wages and still modest per capita GDP growth.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/vital-signs-australia-heads-into-2018-with-mixed-economic-signals-89144">Vital Signs: Australia heads into 2018 with mixed economic signals</a>
</strong>
</em>
</p>
<hr>
<p>With a lag in statistics, economic data for the new year began with what happened toward the end of 2017. Last week the Australian Bureau of Statistics (ABS) released <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/8731.0">building approvals data for November 2017</a> showing that approvals jumped 11.7% for the month to 21,055 on a seasonally adjusted basis. That was almost solely driven by a 30.6% jump in apartments - with the bulk of this coming from Melbourne.</p>
<p>These figures caused many of us to do a double take. Either there are some very lumpy high-rise apartment projects in Melbourne (possible) or there is something odd about the ABS’s seasonal adjustment of the statistics (possible, too, but less likely). Any revisions next month will be revealing.</p>
<p><a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/9314.0Main+Features1December%202017?OpenDocument">Australian new motor vehicle sales</a> were more or less as expected, with national sales up 6.7% on the year. Victoria led the charge, with an annual increase of 19.3%, while NSW was essentially flat, recording a 0.2% increase.</p>
<p><a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0">Housing finance</a> was up in November, with the total amount rising by 2.3% in seasonally adjusted terms. This was a solid result, with much of it attributable to owner occupier growth of 2.7% (compared to 1.5% for investors).</p>
<p>This reflects the prudent, if rather too late, measures put in place by the Australian Prudential Regulation Authority to curb investor lending. In part, it also reflects the silly <a href="http://www.abc.net.au/news/2017-03-06/first-home-buyer-tax-breaks-wont-help-affordability/8328766">first home owner grants</a> reintroduced by state governments relatively recently. As every economist knows (and 50 years of Australian economic history shows) this just inflates housing prices by the amount of the grant, making sellers better off, but not buyers.</p>
<p>A somewhat more leading indicator of trends in the housing market is construction, since it speaks to what new properties will be on the market in coming months. The Australian Industry Group’s widely watched <a href="https://www.aigroup.com.au/policy-and-research/mediacentre/releases/PCI-Dec-2017/">Performance of Construction Index</a> fell sharply, by 4.7 points to 52.8, again in seasonally adjusted terms in December 2017. This is down from the all-time high of 60.5 in July 2017. For these types of indices 50 is the “breakeven” point, so another drop like last month would essentially show construction in reverse gear.</p>
<p>The Australian economy begins 2018 exactly where it ended 2017, with a mixture of positive and troubling signs. There is reason to be optimistic, but also reason to be cautious.</p>
<p>Next week the focus will be more global, as the World Economic Forum meets in Davos to discuss the theme: “Creating a Shared Future in a Fractured World”. United States President Donald Trump is expected to speak on the final day. With French President Emmanuel Macron expected to attend, and German Chancellor Angela Merkel looking reasonably likely to make it, there is the potential for some fireworks.</p>
<p>Macron and Merkel could well suggest the US President has done a fair bit of fracturing of the world in his first year in office. And based on my reading of Michael Wolff’s book Fire and Fury, President Trump doesn’t deal too well with criticism.</p>
<p>Meanwhile, it would be remiss of me not to note that one of the key figures in that book, former Trump strategist Steve Bannon has been subpoenaed by special counsel Robert Mueller to testify before a Grand Jury. Those who have read Fire and Fury know that Bannon reportedly said a lot of things, but a notable one was that only morons lie to a Grand Jury. And say what you will about Bannon, he is no moron.</p>
<p>Trump may end up copping it both at home and abroad next week.</p><img src="https://counter.theconversation.com/content/90110/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Holden does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The number of jobs might be going up but the real test will be whether wages rise too.Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/716002017-01-30T14:37:00Z2017-01-30T14:37:00ZFighting inequality and poverty requires a more humane view of economics<p>When influential charity <a href="http://www.oxfam.org.uk/what-we-do/introduction-to-oxfam">Oxfam</a> published its report, “<a href="http://policy-practice.oxfam.org.uk/publications/an-economy-for-the-1-how-privilege-and-power-in-the-economy-drive-extreme-inequ-592643">An Economy for the 1%</a>”, it was well timed to coincide with <a href="https://www.weforum.org">2017’s January meeting</a> of the world’s rich and powerful at the Swiss ski resort of Davos. </p>
<p>Oxfam’s findings were widely discussed, including in a <a href="http://theweekjunior.co.uk/about-junior/">weekly news magazine</a> aimed at eight to 14-year-olds. Much of this discussion focused on the report’s headline statistics, <a href="https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-economy-for-99-percent-160117-en.pdf">which told us</a> most strikingly that “since 2015, the richest 1% has owned more wealth than the rest of the planet”. Or that the eight richest men in the world own as much wealth as 3.6 billion people – about half of the world’s population. It also pointed out that the incomes of the poorest 10% increased by less than US$3 a year between 1988 and 2011, while the incomes of the richest 1% increased 182 times as much.</p>
<p>These figures are certainly startling. But in response, the <a href="https://www.adamsmith.org/news/oxfams-wealth-statistics-are-persistently-misleading-ben-southwood-comment">Adam Smith Institute</a> questioned Oxfam’s interpretation of the existing data and its focus on the wealth of the rich rather than the welfare of the poor. Growth in the income of those at the bottom, the related reduction in global poverty and improvements in life expectancy, were the key issues for the economic think tank.</p>
<p>The Adam Smith Institute is quite right to highlight the progress that has been made in reducing global inequality and poverty. The gap between the global rich and the global poor is indeed closing when all these factors are taken into account. As the expert on global inequality <a href="https://www.socialeurope.eu/2016/12/speaking-up-for-globalisation-and-against-inequality/">Branko Milanovic</a> notes, since 2000, and for the first time in modern history, global inequality has been on the wane. </p>
<p>The overall level of global inequality, however, remains alarmingly high, as does income inequality within nations. Income inequality in the member states of the Organisation for Economic Cooperation and Development (OECD) for example, “<a href="https://www.oecd.org/social/OECD2016-Income-Inequality-Update.pdf">remains at record high levels</a> despite improving employment rates. The picture outside of the OECD <a href="http://www.oecd.org/social/inequality.htm">is similar</a>”. Economic growth in countries such as India, China and Brazil, has been rapid, but not inclusive.</p>
<p>Yet according to the <a href="http://www.worldbank.org/en/publication/poverty-and-shared-prosperity">World Bank</a>, the economic development of India and China, together with Indonesia, has contributed significantly to a reduction in the number of people living globally in extreme poverty. That number is now below 800m, or 10.7% of the world’s population. Since 2008, income inequality within countries has declined in more countries than it has increased. However, the position of those people that have been lifted out of extreme poverty is precarious. The most disadvantaged people globally, specifically women and children, <a href="https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/9846.pdf">have benefited little from recent progress</a>. They remain trapped in extreme poverty. </p>
<p>The threat posed by inequality to the goal of ending extreme poverty by 2030 <a href="http://www.worldbank.org/en/publication/poverty-and-shared-prosperity">has been well highlighted</a>. So too, has the relationship between inequality, poverty and the <a href="https://www.researchgate.net/profile/Eugenio_Bobenrieth/publication/46440722_The_Political_Economy_of_International_Environmental_Cooperation/links/55ddb07308ae79830bb531ed/The-Political-Economy-of-International-Environmental-Cooperation.pdf">“global public bads”</a> of climate change, pandemics and conflict. The threat posed by inequality to the future of <a href="https://www.theguardian.com/books/2014/apr/28/thomas-piketty-capital-surprise-bestseller">capitalism</a> and the fabric of <a href="https://www.youtube.com/watch?v=x1q8XOX_IEE">democratic society</a> has also been recognised. So, while there has been significant progress in reducing both global inequality and global poverty, the future is uncertain and there is still work to do.</p>
<h2>A ‘human economy’</h2>
<p>The <a href="http://www.worldbank.org/en/publication/poverty-and-shared-prosperity">World Bank</a> suggests six strategies for reducing global inequality and poverty. These include: universal health coverage, access to quality education, cash transfers to poor families and progressive taxation. <a href="https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-economy-for-99-percent-160117-en.pdf">Oxfam</a> posits that a fundamental rethink of the relationship between government and market, and a move away from neoliberal capitalism, with its emphasis on open markets, low taxes and capital mobility, is needed. In its place, they propose a “human economy”, at the heart of which is society and a strong accountable government that works for all, not just the 1%. </p>
<p>The proposals of the World Bank and Oxfam are not incompatible. A strong and accountable government, rather than markets, is needed to ensure that education, health and hi-tech infrastructure are available to all. Progressive taxation is also a central feature of a human economy as a means of bringing about an end to extreme inequalities in wealth and income.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/MTHvHQaNZeY?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>Oxfam’s sketch of a human economy reminds us that there are more inclusive models of capitalism and alternatives to neoliberalism. Given that economics is often discussed in an abstract manner, any effort to get people (including the young) to think about the nature of the economy and how the economy impacts upon society is welcome. </p>
<p>If we are to tackle the issue of inequality and related problems, we need more public discussion of these issues. Brexit and the election of President Trump have been described as turning points – an opportunity to make deals. We need to take these opportunities. Creating a “new deal”, could ensure that our eight to 14-year-olds get the chance to live in a society that is more fair, just and sustainable than what we have now.</p><img src="https://counter.theconversation.com/content/71600/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Dodgson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Oxfam is right to highlight disparities in wealth.Richard Dodgson, Lecturer in International Politics, Newcastle UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/715632017-01-23T04:50:14Z2017-01-23T04:50:14ZTomorrow’s ‘new collar’ jobs will be quite old-fashioned, our response should be too<figure><img src="https://images.theconversation.com/files/153787/original/image-20170123-2459-dozxh0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Technology will make things easier, but likely won't replace the human touch.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Artificial Intelligence (AI), inequality and globalisation were central themes of the World Economic Forum in Davos last week. Fearing that AI will <a href="https://theconversation.com/how-to-be-human-when-technology-is-driving-the-new-industrial-revolution-71230">destroy</a> jobs, IBM CEO Ginni Rometty called for a future where jobs are not white collar or blue collar, but <a href="http://www.cnbc.com/2017/01/17/ibm-ceo-says-ai-will-be-a-partnership-between-man-and-machine.html">“new collar”</a>. </p>
<p>While change is coming, these “new collar” will actually be quite old-fashioned. Teachers, nurses and waiters will all still be important as our economy continues to shift towards services. </p>
<p>Regardless of the jobs, technology will also continue to widen inequality if left unchecked. We must learn the lessons of the industrial revolution and see the world’s labour movements return to their roots: sharing the proceeds of progress with all.</p>
<h2>Technology destroys low-skilled jobs</h2>
<p>Thomas Mortimer <a href="https://books.google.com.au/books?id=cCAPAAAAYAAJ&pg=PA105&lpg=PA105&dq=%E2%80%9Cexclude+the+labour+of+thousands+of+the+human+race.%E2%80%9D&source=bl&ots=pOrCSH_zDq&sig=4Gi3roMy2PdxE2LS5rfRTx2y5UQ&hl=en&sa=X&ved=0ahUKEwiVxIrlp9fRAhVDmZQKHc_pAcYQ6AEIGzAA#v=onepage&q=%E2%80%9Cexclude%20the%20labour%20of%20thousands%20of%20the%20human%20race.%E2%80%9D&f=false">once feared</a> that saw mills would “exclude the labour of thousands of the human race”. That was in 1772 as the industrial revolution gained steam. </p>
<p>Historically, technology has replaced low-skilled jobs and complemented high-skilled ones. The invention of tractors replaced workers with pitchforks, but increased the need for engineers. </p>
<p>Trade has had a similar effect. When <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp9900/2000RP07">we cut tariffs on textiles</a>, <a href="http://www.smh.com.au/business/pac-brands-exits-australian-manufacturing-20090225-8hei.html">some factories closed</a> but Australian clothing designers <a href="http://www.smh.com.au/business/retail/pacific-brands-pays-first-dividend-in-two-years-after-profits-rebound-20160215-gmupu4.html">still flourish</a>. </p>
<p>So far this sounds like an excerpt from a Trump rally. But the story doesn’t end there.</p>
<h2>Replacing old jobs with new</h2>
<p>When one job disappears, a new one is created in its place. During the industrial revolution, farm workers found jobs in factories. Centuries later, they found them in call centres. We call this <a href="http://blogs.worldbank.org/developmenttalk/category/tags/structural-transformation">“structural transformation”</a>, as economies transition from agriculture to manufacturing and then on to services.</p>
<p>The Australian economy is now about <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5206.0Sep%202016?OpenDocument">75% services</a>. It isn’t just digging up things (mining: 7%), making things (manufacturing: 6%) or riding on the sheep’s back (agriculture: 2%). It is about doing things for other people.</p>
<p>What this means is these “new collar jobs” might actually be quite old-fashioned. While we will obviously need more programmers, computer scientists and engineers, we will also need plenty of teachers, nurses and policemen. </p>
<p>Services are not easily replaced. As William Baumol <a href="https://books.google.com.au/books?id=eyXQbYAXCBQC&pg=PA67&lpg=PA67&dq=William+Baumol,+beethoven+string+quartet&source=bl&ots=80bqUAgs2J&sig=vQGr32MOk4nQGNarFWVGkBVjYCA&hl=en&sa=X&ved=0ahUKEwiMiLioitfRAhWBjJQKHeoaBvkQ6AEIQTAG#v=onepage&q=William%20Baumol%2C%20beethoven%20string%20quartet&f=false">pointed out in the 1960s</a>, it still takes just as many people to perform a Beethoven string quartet as it did in the 1800s. It’s <a href="http://www.abc.net.au/news/2014-05-06/pesce-baristas-beware-robots-are-out-for-your-jobs/5431654">easy to automate an espresso</a>, but people <a href="https://www.ibisworld.com.au/industry/cafes-and-coffee-shops.html">still seem to prefer the personal touch</a>. AI will be hard pressed to replace the caring touch of a nurse on a sick patient’s cheek.</p>
<h2>Inequality</h2>
<p>However, new technologies still pose a problem: inequality. In Australia, the average individual real wage of the richest 10% grew <a href="http://www.pc.gov.au/research/supporting/income-distribution-trends/income-distribution-trends.pdf">seven times faster</a> than for the poorest 10% in the 20 years from 1988. While technology increases the size of the economic pie, the slices aren’t shared equally.</p>
<p>When someone’s job is automated they could be unemployed for months while they search and retrain. Older workers may never find another job. If they do, they could be competing with a host of people in the same situation. The costs of progress are borne at the bottom of the income ladder, while the proceeds are reaped at the top.</p>
<p>New technology may change this. While nurses and police officers may be safe, artificial intelligence has already made large gains in <a href="http://www.ibtimes.co.uk/ibms-watson-cracks-medical-mystery-life-saving-diagnosis-patient-who-baffled-doctors-1574963">diagnosing illnesses</a>, <a href="http://www.abajournal.com/magazine/article/how_artificial_intelligence_is_transforming_the_legal_profession">writing legal documents</a> and <a href="http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/where-machines-could-replace-humans-and-where-they-cant-yet">designing machine components</a>. </p>
<p>Doctors, lawyers and engineers are all now at risk.</p>
<h2>The response</h2>
<p>Regardless of which jobs are affected, we need to make sure the benefits of technology are shared equitably. It won’t happen naturally. The owners of businesses and machines – capital – are in a better bargaining position than ever. Something must be done.</p>
<p>We must learn the lessons of the past. The industrial revolution gave birth to the labour movement, which argued for better working conditions, minimum wages and shorter hours. All of these helped share the proceeds of progress. They also spurred growth.</p>
<p>Around the world modern labour movements have lost their way. While making important gains on social issues, the left in the UK and US has flirted with protectionism and strayed from its core business. That business is ensuring workers share in the proceeds of progress.</p>
<p>We must open our borders and our minds to the great benefits of globalisation and technology. We must also ensure the proceeds are shared.</p>
<p>A start would be a proper tax framework. Forcing tech companies to pay <a href="http://www.abc.net.au/news/2016-12-09/tax-data-transparency-ato/8106178">at least a dollar</a> of taxes doesn’t seem like too much. Basing taxes on global profits, prorated by local revenues, could help.</p>
<p>These taxes can then be redistributed. This could be through more retraining support, higher minimum wages or shorter work weeks. John Maynard Keynes <a href="https://www.theguardian.com/business/2008/sep/01/economics">predicted</a> that we would be working 15 hours a week by now. A <a href="https://theconversation.com/universal-basic-income-the-dangerous-idea-of-2016-70395">universal basic income</a> is also a possibility, and we should watch <a href="http://www.news.com.au/finance/money/wealth/the-basic-income-experiment-that-could-revolutionise-welfare/news-story/44d7a5f1076cc2262a6b44e200374055">Finland’s experiment</a> with interest.</p>
<p>Unions must help. In an age of self-driving cars, bus drivers might make good aged-care workers. This may hurt unions, whose membership is industry-based, but they will need to help ease the transition.</p>
<p>Artificial intelligence and globalisation offer an exciting future, but if we are all to enjoy it we must look to the past.</p><img src="https://counter.theconversation.com/content/71563/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Samuel Wills is a member of the Australian Labor Party. </span></em></p>The talk at the World Economic Forum was about technology killing white and blue collar jobs. What’s to come will be decidedly old-fashioned. Our labour movements should be too.Samuel Wills, Assistant Professor/Lecturer in Economics, University of SydneyLicensed as Creative Commons – attribution, no derivatives.