In 1975, a national delegate attending an international conference on the global economy joked: “Who do you expect will be at this conference in 100 years? France or General Motors?” Little could he imagine that just under 40 years later this question would be taken seriously. Every year, the organisers of the World Economic Forum (WEF) have to decide who to invite: France or General Motors. In 2013, neither party was invited.
While François Hollande from France didn’t make the cut, heads of other countries received personal invites to attend Davos for this year’s WEF conference. They included Britain’s David Cameron, Russia’s Dmitry Medvedev, German’s Angela Merkel, and Italy’s Mario Monti, to name just a few. General Motors, having fallen on hard times, are no longer a global player, so their absence wasn’t missed. This year’s contingent of corporate royalty included Microsoft’s Bill Gates, JPMorgan Chase’s Jamie Dimon, Walmart’s Mike Duke and a list of similarly well-credentialed CEOs.
The WEF is hard to ignore. It generates an impressive volume of headlines every January as the great, rich, famous and powerful come together to discuss the problems of the world. Why so much interest for a conference that has no formal authority to make decisions?
Does it really matter who gets an invite and who doesn’t? The world’s shakers and movers certainly think so, because to be absent from Davos means you’re not as much a “mover and shaker” as you thought you were. To be at Davos, on the other hand, is an opportunity to exercises considerable influence over global agenda and that is why there is such a scramble for invites every year.
To explain how decisions are made in a globalised world, WEF founder and executive chairman Klaus Schwab co-authored an article in Foreign Policy in which he wrote that “people around the globe, outside formal government channels … have become more aware that global problems require global trusteeship and that efforts to solve them solely through traditional means – government to government – might be inadequate.” He went on to suggest that “government officials now need to cast a much wider net, systematically embedding themselves in diverse, often informal, networks of expertise”. The raison d’etre of the WEF is to unite the most important of these networks.
Some have complained that WEF is undemocratic. But this objection is dismissed as irrelevant. It is argued that WEF it is merely a conduit for identifying technical solutions to global problems in an apolitical environment. But is that true?
While the WEF assiduously avoids partisan politics, the values held by its participants affect the remedies they offer up to solve global problems. Often these are market-based solutions. On other occasions, the WEF brokers partnerships between the public and private sectors. Corporations are also encouraged to work alone to tackle global problems.
Putting aside judgement of the values that the WEF brings to the table, I have other objections to the WEF’s growing influence. It has allowed governments to step back from cooperating on global issues as they gladly palm off problems to the private sector. Next, corporations are not altruistic, and will only take on projects that serve their commercial interests. This can distort global priorities and limit effective action. Finally, by effectively privatising environmental or social programs, there is little accountability for the outcomes. Misdirected programs can do more harm than good.
Turning to the question of legitimacy, what is often overlooked is that the WEF is a private club, bankrolled by the corporate sector. This allows them to decide who gets an invite and what is included on the program, handing them the unchallenged ability to shape the global agenda. As a consequence, governments have largely dealt themselves out of the game. In any case, they are not to up to the task, as Schwab told Forbes, because they cling to an “outmoded model of sovereignty … [which has] prevented nation states truly engaging with globalisation”.
Looking ahead, the “world of tomorrow is not a world based on a supra-structure of nation-states,” predicts Schwab in Newsweek. “It is a world where business is a major shaper not only of economic developments but also of social developments.” The WEF has been actively taking the world to this future.
So it is important to look behind the headlines and understand that the WEF is changing the very architecture of global governance by handing major parts of it over the private elites, with acquiescent politicians grateful to be welcomed in as honorary members of the most exclusive club in the world.
Unless governments can make existing international organisations works by putting aside parochial politics and cooperating on global issues, the public interest will continue to be left to the tender mercies of unelected elites.