Category: Strategic-Sustainability

Davos WEF Update #1.4, 1/19/20

A lone Occupy Wall Street protester sits in front of Federal Hall, across the street from the New York Stock Exchange, in New York June 8, 2012. More than eight months after Occupy Wall Street stormed the global stage, decrying economic inequality and coining the phrase "We are the 99 percent," the movement appears to be losing steam. Donations to the flagship New York chapter have slowed to a trickle. Polls show that public support is rapidly waning. Media attention has dropped precipitously.

WEF claims to do good. Others doubt it.

As the World Economic Forum oligarchs convene in Davos, Switzerland, check out the heart-felt doubts of an Occupy Wall Stree activist invited to Davos, Micah White. The Anonymous guy above reading the China Daily might as well be me, but I am upfront, hardly anonymous.

Klaus Schwab, the WEF founder, would be held in vile contempt by neoliberal champion Milton Friedman. Here’s why:

  • Friedman and orthodox neoliberal ideologues regard unfettered capitalism as Pareto Optimal (best of all possible worlds), meaning that we can’t do any better than that! All this impressive theoretical effort derives from a grand-theory deduction (Tinbergen), not from induction based on data, such as today’s news. And tomorrow’s.
  • Schwab regards corporations as potentially, not yet actually, responsible and transparent social agents accountable to stakeholders. Costco provides a model mission and, yup, Walmart may be heading in that direction. Ray Dalio and even BlackRock, the largest investment corporation, have publicly declared such revision in their mission statements, with results. Corporate Social Responsibility does occasionally happen, so, as economist Kenneth Boulding states: “If it exists, it is possible.” Don’t go crazy yet: Profits provide the engine of capitalism (Shaikh).

Fossil fuels may provide the signal as to which of these models prevail. Divestment in coal is the litmus test for financial behemoths. Watch the coming Aramco IPO for insights about the future of these models of corporate behavior. The Aramco IPO will assess such variables as the adequacy of corporate governance, transparency and integrity, and, critically, the long-term price of a barrel of oil. The Saudi oil powerhouse appears to produce sweet product at the cost of $4/barrel. Their proven reserves appear to be 268 billion barrels and the sunk infrastructure investment is enormous, and vulnerable to sabotage. Do the math. As I write, the market price is about $65/barrel and the IPO has been valued at $1.85 trillion, to the chagrin of the Crown Prince who expected over $2 trillion to support his tottering feudal welfare state. See my notes. The worst event for Aramco: Petroleum reserves become stranded assets as climate destruction takes over.

Micah says:

At the heart of the World Economic Forum is the conviction that decisions are best made when the interests of all stakeholders are served. Explaining this concept in 1971, Schwab wrote:

Consumption Trumps Production

For a simple reason: Consumers rule in the capitalist hegemon, the USA, where nearly 70% of the GDP provides private household consumption. No other nation comes close.

As I explored the Livelihood layer of capitalist civilization through volume one of Braudel, I advocated the bolstering of the household as an intermediary between civil society and the highest layer of capitalism, the global — now captured as Neoliberalism.

A seminal source comes from Annie Leonard, now the director of a CSO the powerhouse Greenpeace, the highly informative and entertaining Story of Stuff.

A robust theoretical review from Schnaiburg adds depth to the underlying potential. Barnes captures the neglected significance of the household that, despite its decentralized ubiquity (which can be transformed into a strength) but consumption rests with, well consumers, who can, in effect, vote with their money.

Less direct control over production exists, but indirect means are available, including the market signals emanating from demand. Investors, financial intermediaries, pension funds, sovereigns, however, can exert considerable sway, and do. The withdrawal of financing for new coal-fired electricity plants and nuclear energy (post-Fukishima) have a profound impact through the nerves of capitalism.

Existentially, the decision-makers at the quarternary level live in real-time, with families and with reputations to uphold. Their income suffices. Much potential to guide future investments can result.

I, however, appeal to the consumer to exert leverage that registers and gets results. Cases are needed here. Start with Annie Leonard.