The Washington PostDemocracy Dies in Darkness

Are we past peak Davos?

What if Klaus Schwab threw a forum and nobody cared?

Students protest during a “School Strike 4 Climate” in front of the Congress Center at the last day of the 49th annual meeting of the World Economic Forum in Davos, Switzerland. (Laurent Gillieron/Keystone via AP)

My Washington Post colleague Fareed Zakaria last week reported his observations from attending the World Economic Forum in Davos, Switzerland. His assessment was rather grim: “The mood here is subdued, cautious and apprehensive. There’s not much talk of a global slowdown, but no one is confident about a growth story, either. There is no great global political crisis, yet people speak in worried tones about the state of democracy, open societies and the international order.” His op-ed is worth reading, because it points out that the United States was hardly the only country to not make much of an appearance in Switzerland: Europe is “distracted, divided and despondent.” China is “playing a more muted role at the forum than in the past.”

At the same time, another Post colleague, Anne Applebaum, tweeted a more provocative thesis: What if the problem is less with the world than with Davos itself?

Her tweet is worth mulling over. After it ended, the forum offered a list of 33 ways that Davos “made an impact on the world.” By my reckoning, exactly one item on that list merited significance: the launching of e-commerce talks.

The world has many problems, and the Davos model — what I described three years ago as “a giant green room for politicians to meet plutocrats” — might be one of them.

Klaus Schwab, the founder of the forum, seems to recognize that something is amiss. In his own take on the dilemmas facing the world, Schwab tries to parse out “globalization” and “globalism.” Schwab explains, “Globalization is a phenomenon driven by technology and the movement of ideas, people and goods. Globalism is an ideology that prioritizes the neoliberal global order over national interests.”

Any political scientist worth their salt will immediately object to Schwab’s botched framing and historical amnesia. The notion that technological change lacks human agency is absurd. The adoption of Trump’s slur to describe the set of beliefs that Schwab embraced for decades is abhorrent. As Foreign Policy’s Stephan Richter and Uwe Bott noted in their critique of Schwab’s essay, “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.”

Indeed, for all the geopolitical fretting that occurred at Davos, what was striking from afar was the discomfiting behavior of its corporate sponsors and attendees. For example, Apple CEO Tim Cook and Microsoft CEO Satya Nadella dined politely with Brazilian President Jair Bolsonaro. I wonder if Cook raised any questions about Bolsonaro’s attitude toward gay rights.

While the CEOs in attendance seemed perfectly comfortable with far-right politicians, they were much more scornful of those on the left who were not in attendance. Watch the video below to see why:

There are plenty of juicy policy debates to have about raising taxes on the rich. Furthermore, I am leery of arguments that say “we had high taxes in the 1950s and that was a pretty awesome economic era, so we could do it now and everything will be great.” The world looks a lot different now. Still, blithely dismissing the possibility of more progressive taxation to bolster social safety nets demonstrates a callous disregard by CEOs of everyone but their stockholders.

This matters immensely, since the real takeaway from this year’s Davos was the corporate obsession with artificial intelligence and automation. Zakaria noted, “The one area of consistent optimism among the attendees remains technology. Executives from multinational corporations such as Novartis and Cargill spoke about the next great technological opportunity — leveraging artificial intelligence to make their companies far more efficient and productive. This is a trend that they see as inexorable, forcing them to adapt or watch the competition grow.”

The New York Times' Kevin Roose had a sharper take on this, in particular the dichotomy between public and private discourse on the subject from corporate officials:

In public, many executives wring their hands over the negative consequences that artificial intelligence and automation could have for workers. They take part in panel discussions about building “human-centered A.I.” for the “Fourth Industrial Revolution” — Davos-speak for the corporate adoption of machine learning and other advanced technology — and talk about the need to provide a safety net for people who lose their jobs as a result of automation.
But in private settings, including meetings with the leaders of the many consulting and technology firms whose pop-up storefronts line the Davos Promenade, these executives tell a different story: They are racing to automate their own work forces to stay ahead of the competition, with little regard for the impact on workers. ...
In Davos, executives tend to speak about automation as a natural phenomenon over which they have no control, like hurricanes or heat waves. They claim that if they don’t automate jobs as quickly as possible, their competitors will.
“They will be disrupted if they don’t,” said Katy George, a senior partner at the consulting firm McKinsey & Company.

Note the treatment of technological change as an agent-less, natural phenomenon, akin to Schwab’s framing. Which, again, it is not. The proof for this can be found in that last quote, which is the perfect distillation of the McKinsey view of automation and AI. As I have written elsewhere, this view on these things is not necessarily wrong, but it is badly compromised by self-interest. The management consultants of the world have an awfully big incentive to scare corporations into massive AI investments — and to hire management consultants to help them orchestrate the transitions this entails. Indeed, that is the best way to read the McKinsey Global Institute’s September 2018 paper, which seems reverse-engineered to mandate even more AI investments.

That McKinsey paper acknowledges that it “does not include ... important considerations like ethics.” For that, you should read George Soros’s speech at Davos, which warns that “the instruments of control developed by artificial intelligence give an inherent advantage to authoritarian regimes over open societies. For them, instruments of control provide a useful tool; for open societies, they pose a mortal threat.” It would have been nice if the corporations sponsoring Davos started thinking about, you know, ethics.

The hard-working staff here at Spoiler Alerts remain big fans of the open global economy and the requisite amounts of global economic governance to preempt crises and excesses. So it is disturbing to read the accounts of corporate behavior at Davos and think to myself, “These people are the problem.” Maybe I have become radicalized. But if the Davos crowd is losing someone like me, then their pillars of support elsewhere are dissolving fast.

Another quote from the McKinsey paper is: “This is a world of near-continuous discontinuity.” After reading what went down this year, it would seem that the arena most in need of disruption is Davos itself.