Klaus Schwab thinks that now is the time to start reassessing sacred cows and disposing of defunct ideologies

Klaus Schwab thinks that now is the time to start reassessing sacred cows and disposing of defunct ideologies

No event since World War II’s end has had as profound a global impact as COVID-19. The pandemic has triggered a public health and economic crisis on a scale unseen in generations and has exacerbated systemic problems such as inequality and great-power posturing.

The only acceptable response to such a crisis is to pursue a “Great Reset” of our economies, politics, and societies. Indeed, this is a moment to re-evaluate the sacred cows of the pre-pandemic system, but also to defend certain long-held values. The task we face is to preserve the accomplishments of the past 75 years in a more sustainable form.

In the decades after WWII, the world made unprecedented strides toward eradicating poverty, reducing childhood mortality, increasing life expectancy, and expanding literacy. Today, international cooperation and trade, which drove the post-war improvement in these and many other measures of human progress, must be maintained and defended against renewed skepticism of their merits.

At the same time, the world also must remain focused on the defining issue of the pre-pandemic era: the “Fourth Industrial Revolution” and the digitisation of countless economic activities. Recent technological advances have given us the tools that we need to confront the current crisis – including through the rapid development of vaccines, new treatments, and personal protective equipment. We will need to continue to invest in research and development, education, and innovation, while at the same time building protections against those who would misuse technology.

But other shibboleths of our global economic system will need to be re-evaluated with an open mind. Chief among these is the neoliberal ideology. Free-market fundamentalism has eroded worker rights and economic security, triggered a deregulatory race to the bottom and ruinous tax competition, and enabled the emergence of massive new global monopolies.

Trade, taxation, and competition rules that reflect decades of neoliberal influence will now have to be revised. Otherwise, the ideological pendulum – already in motion – could swing back toward full-scale protectionism and other lose-lose economic strategies.

Specifically, we will need to reconsider our collective commitment to “capitalism” as we have known it. Obviously, we should not do away with the basic engines of growth. We owe most of the social progress of the past to entrepreneurship and to the capacity to create wealth by taking risks and pursuing innovative new business models. We need markets to allocate resources and the production of goods and services efficiently, particularly when it comes to confronting problems like climate change.

But we must rethink what we mean by “capital” in its many iterations, whether financial, environmental, social, or human. Today’s consumers do not want more and better goods and services for a reasonable price. Rather, they increasingly expect companies to contribute to social welfare and the common good. There is both a fundamental need and an increasingly widespread demand for a new kind of “capitalism.”

To reconsider capitalism, we must reconsider the role of corporations. An early exponent of neoliberalism, the Nobel laureate economist Milton Friedman believed (quoting former US President Calvin Coolidge) that “the business of business is business.” But when Friedman pioneered the doctrine of shareholder primacy, he did not consider that a publicly traded company might be not just a commercial entity but also a social organism.

Moreover, the COVID crisis has demonstrated that companies that invested in strengthening their long-term vitality have been better equipped to weather the storm. In fact, the pandemic has hastened the shift toward a stakeholder model of corporate capitalism, following the US Business Roundtable’s embrace of this concept last year.

But for more socially and environmentally conscious business practices to stick, companies need clearer guidelines. To meet that need, the World Economic Forum’s International Business Council has developed a set of “Stakeholder Capitalism Metrics,” so that businesses can get on the same page when it comes to assessing value and risks.

If the COVID crisis has shown us anything, it is that governments, businesses, or civil-society groups acting alone cannot meet systemic global challenges. We need to break down the siloes that keep these domains separate, and start to build institutional platforms for public-private cooperation. Equally important, younger generations must be involved in this process, because it is inherently about the long-term future.

Finally, we must expand our effort to recognize the diversity of backgrounds, opinions, and values among citizens at all levels. We each have our individual identities, but we all belong to local, professional, national, and even global communities with shared interests and intertwined destinies.

The Great Reset should seek to lend a voice to those who have been left behind, so that everyone who is willing to “co-shape” the future can do so. The reset that we need is not a revolution or a shift to some new ideology. Rather, it should be seen as a pragmatic step toward a more resilient, cohesive, and sustainable world. Some of the pillars of the global system will need to be replaced, and others repaired or strengthened. To achieve shared progress, prosperity, and health requires nothing more – or less.


*Klaus Schwab is Founder and Executive Chairman of the World Economic Forum. Copyright: Project Syndicate, 2020, and published here with permission.

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41 Comments

10
up

Dreadful thinking here.
Looks a symptom as to why Europe & EU is the seething mess it is.

If you think it's dreadful Henry then I know it's good thinking. No ideology more defunct and destructive than neoliberalism

His thinking is accurate and progressive

11
up

Progressive you mean maxist

r

There you go - I presume you dropped.

You must be very, very old and well steeped indeed. Marxism was essentially about the fight over access to resources - adjudicated via token-issuance (money). He was advocating a more sharing. caring society. Nothing wrong with that.

What both 'sides'failed to see was thaty the process was one of extraction, consumption ahd waste-ejection, within a bounded system. It was therefore temporary; as in unable to be continued indefinitely. And the impasse has come to pass.

There were always going to be ideologically-hamstrung people left behind when the change happened - you need to walk faster, cranially speaking.

Progressive is not Marxism the same as Neoliberalism is not Nazism.

Dc, here is a start for you. Here are 3 things to nurture,

1. Rule of Law
2. Property rights
3. Markets (transparent pricing, free to access/participate in).

An elite ideology in 3 sentences.

Translated:
Set up a system they can't compete in.
Say what was theirs is yours.
Sell it to each other (but Joe's corner hardware store has free rights to compete with Walmart - it was his fault he wasn't smart enough to out-bid them, right?

That led to half-a-dozen offshore, conscienceless corporate giants ruling the world and contributing nothing back. Just the illogical logical result. And we only allowed it to happen to us, because of the HT types filling the Brownshirt role in modern form.

Needs more than just an uptick in support!

pdk you are far more concise and articulate than I will ever be, thanks!

There are places where the rule of law, property rights and markets are not respected and usually they are unpleasant places.

Your interpretation is popular with thumbs up. On election night it is worth noting that your objections mainly relate to who is making the law, who is defining the property right and who accepts monopolies as 'markets'. A healthy democracy enforces rights over common goods such as unpolluted water, clean air, good schools and education. If we are ruled by offshore, conscienceless corporate then in a democracy that is our own fault.

#3 needs a lot of work in this current framework.

No way can you call what we have a 'free market'.
Price discovery has been killed by a tsunami of liquidity so no transparent pricing.

Agree with your Henry. Total dribble. Go Trump!

Biggest problem in NZ is the lazy welfare recipients who are getting to much followed by the Government defending them not taking a job.
Headline: Thousands of jobs go begging because unemployed Kiwis won't take them
https://www.stuff.co.nz/business/industries/123055187/thousands-of-jobs-...
MBIE responds: However, Ministry of Business, Industry and Employment acting immigration policy manager Andrew Craig said it was expected that more New Zealanders would be available to fill job vacancies “if the sector makes the jobs more attractive”.

Really, I mean really? Is that the biggest problem we have in this country? How about poor housing standards and affordability, how about child poverty, how about pollution in our rivers, how about lack of solidarity of the rich and greed? An universal basic income would fix the broken welfare system, is that something you would support?

I figured he was trolling heavily....but he's praying for Trump to win elsewhere so maybe not.

Child poverty is the responsibility of those breeding the children.
Said parents can take a job but some prefer welfare so they are road kill unfortunately.
Polluted rivers are a problem but will only get worse. They will ramp up the tourists again after covid whoever is in power.
Don't be envious of the rich. Aspire to join them....

You have absolutely no idea.

One World Government/Corporate partnership - coming to a country near you.

Nope. Collapse of the system and fragmentation into 'local' and 'very local' is the more likely outcome.

We already had the one world order - it was google/facebook/twitter/pinterest etc. Not tax paid, no local societal allegiance, no differentiation between truth and lies. They've high-water-marked and the tide is ebbing.

Your wish is on the way being executed by NZ RBNZ, no body expecting a smooth glide descend since no NZ govt will allow that to happen the past 30 years, which left to RBNZ with the limited tools to do this heavy task.
I hope RBNZ steadfast using their limited time of 'independence' with 'limited tools'- No TD guarantee, No banks CAR, No LVR, No DTI, QEs/LSAP, FLP, soon Negative OCR, hope by mid 2021 they'll put QE into at least 300billions - There's no such things as have/have not, inequality - buy those RE now! it's intrinsic long term wealth things. It's Kiwis job to help our current economy, in this case Finance Insurance Real Estate stuff

"We need to break down the siloes that keep these domains separate, and start to build institutional platforms for public-private cooperation"

OK. How, precisely? Because the Clerisy (who revel in their siloes and will defend them to the last serf) don't take kindly to challenges to their dominance....and composed as they are of the oligarchs, the culture taste-makers, the bulk of Gubmint, higher ed and the media, they have the means to resist for decades yet.....

Interesting how all these guys (not sexiest but it appears to be men with the money and power at the top of the capitalist pie..) are coming out and saying the system is broken. Dalio is the same. Saying capitalism needs to change as its not working well enough for everyone. But I don't see any suggestions on what those changes might be? At the moment it would appear that, from a democratic perspective, people would rather run this thing into the ground as opposed to acknowledging that it isn't working as well as it should...

I have no reason to change my distaste for the opinions espoused by this character posted last June.

by Audaxes | 6th Jun 20, 11:14am
Klaus Schwab views the COVID-19 crisis as an opportunity to build healthier, more equitable, and more sustainable systems
Klaus Schwab is Founder and Executive Chairman of the World Economic Forum.

Is he qualified to undertake the task outlined in the title? Any reference to this group of self serving globalist, oligarchs practically disqualifies him from any sensible discussion about equitable outcomes.

The foundation is funded by its 1,000 member companies, typically global enterprises with more than five billion dollars in turnover (varying by industry and region). These enterprises rank among the top companies within their industry and/or country and play a leading role in shaping the future of their industry and/or region. Membership is stratified by the level of engagement with forum activities, with the level of membership fees increasing as participation in meetings, projects, and initiatives rises.[20] In 2011 an annual membership cost $52,000 for an individual member, $263,000 for "Industry Partner" and $527,000 for "Strategic Partner". An admission fee cost $19,000 per person.[21] In 2014, WEF raised annual fees by 20 percent, bringing the cost for "Strategic Partner" from CHF 500,000 ($523,000) to CHF 600,000 ($628,000).[22] Link

by Audaxes | 6th Jun 20, 11:15am
He and his kind promoted the virtues of "Free Trade", in reality it was anything but free. NZ ended up swapping jobs for debt - China got the jobs, NZ got the debt and virtually no tax receipts from those global corporations operating in our territory.

Yeah, I hear you on that one. My thought when reading it was of all the organisations that a ptb 'Great Reset' plan might come from - that is one - but, they'll never go willingly. Last paragraph says it all - "no revolution needed" - yeah right.

We need a Trump win. He is the only leader who can save the world from the woke and socialists.

I think he just gives them more strength - I.e the cause to rise up further

Disagree the woke and socialists are the reason he got elected in the first place.

Same argument could be made in NZ now - the self interested National/centre right views have repelled so many people they have fled to the left. Who should we blame? John Key? Simon Bridges? Collins? Did they not sell building roads and dropping taxes well enough?

America needs someone to bring them back together - not divide them further apart. And that is what Trump appears to have done. The woke (which you appear to dislike) will now be much more woke and there’s likely more of them as well. So you need to be careful what you create as we each influence one another.

Having last lived in the US 92 to 98 my view is the US was already divided. I also go back a lot and have a lot of family there
Some states are countries in themselves and most I dealt with didn't care what happened outside there states or what happens in Washington. The bigger the state the bigger the view of this. Many don't even vote.
Compares Texans to Californians to East Coast states.
Our news is so one sided and bias you would think everyone hates him. Half supported him last time around and it will be a close run thing.

Have you actually listened to what he is saying? He is racist, misogynistic, bigoted and supports white supremacists, also refusing to denounce the batshit crazy qanon movement.

Are you happy with all that then?

Biden, Sanders, Warren and AOC are much worse.
Its an anti woke vote.
I am sick of the woke and socialists wanting to tell everyone what to think and do.
So I say Go Trump.

Y'see, no one's telling you what to do. But there is responsibility in all of our actions. You just need to look outside your echo chamber.

You're happy with a full blown dictator who is insane then?

He doesn't have that much power if you knew what you were talking about or understood how the chambers are split and there functions.
Hence why they cant pass the current stimulus bill.
Republicans control the senate (but may loose it soon).
Democrats control the house of representatives.
Republicans control the Executive / White House via Trump.
Maybe do some research and learn about how the political system works in the US.

ZING!!

Excellent article, the half baked neoliberal ideas have brought us to a turning point in which inequality is threatening to break the social contract, for thirty years free market fundamentalist have implemented Reagan and Thatcher's wet dream, destroying the West's production system and turning economies into empty husks based in speculation in favor of just a few, which has fueled the asset bubbles we see now. Time for a change but need to be aware of Gatopardism.

Although to the second comma I'd agree with you then you clump together UK & USA and Thatcher and Trump. I lived in both those countries pre-Thatcher & Reagan - Thatcher halted and maybe turned round the rapid decline in the UK's economy (remember the 3 day week and nationalised shipbuilding. On the other hand American decline (excluding Internet based international monopolies) started with policies from the Reagan era. I suppose I'm saying a dose of neo-liberalism may do good to North Korea but wreck Denmark.

I strongly recommend you watch the movie Mr. Jones.

"The pandemic has triggered a public health and economic crisis on a scale unseen in generations and has exacerbated systemic problems such as inequality and great-power posturing."
Let's analyse the word "pandemic". Is it really a pandemic? What makes a pandemic (statistics needed). Where has it triggered public health crisis? Which country? As for the economic crisis, has the "pandemic" triggered the economic crisis or was the economic crisis being triggered by the reaction of governments around the world to the "pandemic" as advised by WHO?
Problems of inequality. This is as old as humanity. We are not all equal, that is the fact. No system has ever been able to deal with it. Not ever. But many have tried and the one we know for sure was Karl Marx. Yes, that was his dream and that is the ideology of Marxism. And this is what these people are once again supporting. Do we want to go there again, repeat the history? It was a dream - Utopia and the price was huge. Ask anyone from Eastern Germany, for example. Or from China about Mao era.
Just dig a bit deeper into this one sentence and it will take you to the place the world has already been before. And sorry, but that system does not work! It brings down everything and everybody, (but the handful at the top).
Why are people so naïve, it always makes me wonder?