Davos Has Learned to Fake Populism

The world’s most powerful economic elites are using anti-globalist rhetoric to help turbocharge globalization—and enrich themselves.

Brazilian President Jair Bolsonaro and Executive Chairman of the World Economic Forum Klaus Schwab at the World Economic Forum on Jan. 22, 2019 in Davos, Switzerland. (Fabrice Coferini/AFP/Getty Images)
Brazilian President Jair Bolsonaro and Executive Chairman of the World Economic Forum Klaus Schwab at the World Economic Forum on Jan. 22, 2019 in Davos, Switzerland. (Fabrice Coferini/AFP/Getty Images)

You don’t have to believe Klaus Schwab is a deep thinker to believe he is an important one. The founder of the World Economic Forum—the annual meeting of business leaders and politicians in Davos, Switzerland, that’s been convening this week—has always naturally articulated the views of the world’s economic elites.

So when Schwab publicly throws globalism under the bus, sounding like a leftist university professor while he’s at it, it’s worth paying attention. In the run-up to the 2019 World Economic Forum, Schwab wrote an article in which he declared that “Globalism is an ideology that prioritizes the neoliberal global order over national interests.”

Schwab, like the broader Davos set, is trying to adjust to the age of populism. But that’s not to suggest they’re surrendering to it. Quite the opposite: Schwab’s anti-globalist shift is a hijacking attempt. It shows how corporate elites are trying to accommodate nationalist populism while still maximizing their own personal gains—which, of course, come at the expense of the very masses they’re attempting to appeal to.

Schwab’s attack on globalism is aided by the ambiguity that has always surrounded the term. The convention, especially among right-wing populists, has been to portray “globalism” as the root of all evil, often with a certain anti-Semitic tinge to the accusation. The underlying suggestion is that globalism is a form of commercial world conspiracy, conducted by Goldman Sachs, George Soros, a series of U.S. Federal Reserve chiefs, and the like. In other ideological camps, globalism is considered a cover for the corporatist pursuit of neoliberal economic policies.

Schwab doesn’t adopt either of those definitions. Instead, Schwab differentiates between the “ideology” of globalism and the “phenomenon” of globalization. Globalization, he says, is a structural process involving the gradual dissolution of boundaries that is driven by technology and the movement of ideas, people, and goods.

In a sense, Schwab interprets these processes as ideology-neutral. And this framing does indeed make sense: Like it or not, and no matter what your political view is, globalization is a fact of life, just as climate change and pandemics are. None can be definitively stopped at a country’s border, even a country with a massive border wall.

The key issues that globalization in its ideology-neutral rendering does not address are the underlying or resulting inequities and other challenges stemming from the process of global integration itself. And this is exactly where “globalism” comes in. It aims at answering crucial questions such as: Will we address the downside effects of globalization within the confines of our own countries and societies? Are we to solve these issues nation-state by nation-state? Or unilaterally, as U.S. President Donald Trump believes?

Every government is free to try to pursue the answers it judges best, although there is plenty of evidence to suggest that going a purely unilateralist and national route is doomed to fail. Nationalism flattens out complexity, portraying complex issues in a simplifying, binary, and zero-sum way.

But populist politicians like Trump, even if they are ignorant, appear to have the virtue of consistency, in that they tend to rail against globalism and globalization at the same time. Schwab is more nuanced, but also more cynical in his approach. In separating international exchange from global governance—and only attacking the latter—he is encouraging a world in which politics is reduced to playacting action while economic elites remain unconstrained in their pursuit of profit. Schwab’s rhetoric might make his Davos confab more palatable to Trump-style populists. But it does not do anything to solve the real problems that fuel political discontent.

Any constructive way forward for politics would have to acknowledge the need for globalism—that is, for global governance—while acknowledging that our existing global institutions, which were built after World War II, are often ill-suited to manage the present moment. Part of the explanation for why confidence in institutions such as the World Bank, the International Monetary Fund, and the World Trade Organization has faded over the decades is their inclination to over-promise and under-deliver. Whatever their past value, they have not evolved enough to address the stresses of the 21st century.

This same overpromising applies to many global mega-corporations and their management teams, which have been the major winners of globalization. They have long run campaigns, largely coordinated in the framework of the World Economic Forum, to emphasize a spirit of corporate social responsibility—which essentially boils down to charity for globalization’s losers.

This smokescreen helps prettify the economic and social problems those corporate elites are helping to create. Whatever good those mega-corporations might do, their relentless drive for efficiency and shareholder value necessarily deprives most people of their political agency. The one way in which large corporations themselves get to taste how it feels to be deprived of agency is when they get caught on the wrong end of the global merger and acquisitions machinery (namely, that of the acquired party).

As tempting as it may be to some to follow Schwab’s readiness to throw globalism under the bus, his approach will accomplish nothing. In the real world, we are still dealing with a triple confidence crisis—in democracy, global institutions, and global corporations. It is more than ironic that basically every annual motto under which the annual meeting of the World Economic Forum has convened since 1971 has been designed to give the impression of addressing this trinity in earnest, obviously to little avail so far.

While the forum has largely failed in that regard, it is only logical that these three challenges must be addressed together. We have to modernize our nation-state democratic institutions as well as our network of global institutions so that they are more responsive to the challenges we are facing.

This also means addressing global mega-corporations that are to an amazing extent—beginning with their grotesque shenanigans to avoid paying taxes—the biggest free riders in our troubled world. Their systematic effort to avoid paying their fair share and thereby contributing to preserving democracy and fairness in our societies can no longer be tolerated.

Holding these mega-corporations to account, rather than celebrating them, as Schwab invariably does, is also in their own immediate self-interest. Unless this happens, the essence of what these companies depend on—a consensus in favor of continued global integration—will vanish. It is already brittle enough.

Pursuing this triple challenge—advancing the accountability of large corporations, our own democracies, and global institutions—is, in the best sense of the word, the progressive solution to the challenges we face at the national and international level. It stands in stark contrast to the regressive withdrawal from democratic frameworks domestically and at the international level favored by the populists. It is globalism at its best—and, instead of his shallow attempt to placate the forces of global populism, should deserve Schwab’s praise.

Stephan Richter is the publisher and editor-in-chief of The Globalist.

Uwe Bott is chief economist of The Globalist.

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