[At the World Economic Forum’s conference in Davos this week,
elites will try to address problems from climate change to the threat
of worldwide recession. But these elites’ endless thirst for profit
will doom their efforts to fail.]
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AT DAVOS, CAPITALISTS ARE TRYING TO SOLVE THE PROBLEMS THEY
THEMSELVES CREATE  
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Grace Blakeley
January 17, 2023
Jacobin
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_ At the World Economic Forum’s conference in Davos this week,
elites will try to address problems from climate change to the threat
of worldwide recession. But these elites’ endless thirst for profit
will doom their efforts to fail. _

US House Foreign Affairs Committee chairman Gregory Meeks (center),
president of Moldova Maia Sandu (second from right) and prime minister
of Finland Sanna Marin (second from left) speak at World Economic
Forum in Davos, Switzerland, on January 17, 2023, Dursun Aydemir /
Anadolu Agency via Getty Images

 

At the start of each year, the World Economic Forum (WEF) —
organizer of the annual Davos conference currently underway in
Switzerland — releases its list of the “global risks” expected
to dominate over the following twelve months. This year, researchers
at the WEF decided that these risks are so great, and so interwoven,
that we are now entering an era of “polycrisis.”

The clearest risk in the immediate term is a global recession. The UK,
most of Europe, and the United States are pretty much guaranteed to go
into recession in 2023. The downturn will be worse in Europe due to
the ongoing energy crisis and the war in Ukraine.

The fact that an inflationary crisis — and, relatedly, a
cost-of-living crisis — is taking place alongside this economic
downturn makes the outlook even more grim. We’ve had a decade of
slow growth, and looking ahead, it’s hard to see where growth is
going to come from in the future.

Over the longer term, the greatest existential risk the world faces is
climate breakdown. The last eight years were the hottest ever
recorded, with 2016 being the warmest. Extreme weather events that
once took place every several hundred years are now taking place
annually.

We have already started to approach the tipping points that will
rapidly and unpredictably accelerate the processes causing the climate
breakdown. The oceans are becoming acidified, arctic ice and
permafrost are melting, and forests are being lost at a devastating
rate.

“Geoeconomic confrontation,” “cybercrime,” and “erosion of
societal cohesion” are all high up the WEF’s list of risks as
well.

Over the course of the next several days, the world’s elite will
come together to discuss among themselves how to tackle these
extensive challenges — as they do every year. But what can the
ruling class actually do about these problems?

Many of the “risks” on this list should be understood as
collective action problems, of the kind that are very familiar in
capitalist societies.

If individual capitalists were able to work together to increase
investment, they’d be able to engineer an end to low growth. If they
were able to work together to come to a binding agreement on how to
reduce their emissions, they’d be able to slow the rate of climate
breakdown.

Yet the world’s capitalist class is too scattered and divided to
achieve such coordination on its own. This is precisely why the state
— and international organizations like the WEF — are necessary.
They help capitalists to solve their collective action problems.

The postwar Keynesian settlement was a good example of an attempt to
do just this. Domestically, states agreed to step in when private
investment fell to avoid recessions and maintain profits.
Internationally, a series of agreements governing trade and investment
flows were enacted to protect global growth.

And for a while, these policies supported a near-unprecedented period
of global economic growth and stability — to the benefit of
capitalists in the Global North.

The only issue was that these policies also benefited workers in the
rich world. The ruling class quickly realized that the only thing that
allowed them to maintain order in capitalist societies — other than
the overt use of force — was the threat of recession.

If workers were no longer terrified of losing their jobs because they
knew that the state was capable of exercising control over variables
like growth and employment, what was to stop them from striking to
demand a greater share of the economic pie?

These questions were at the heart of the neoliberal shift of the
1980s. The policies introduced during this time — privatization,
austerity, the end of restrictions on capital mobility — were about
restoring the “governability
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of capitalist societies. They had nothing to do with shrinking the
state or freeing the market.

And these questions are, once again, at the very front of the minds of
the capitalist class as they meet in Davos to discuss the future of
the world economy. After decades of attempts at “market-based
solutions” to climate breakdown and slowing global growth, it must
be very clear to them that individual capitalists can’t solve these
problems on their own.

As the _Financial Times_ and the _Economist _have both recently
argued, some level of centralized planning will be necessary to deal
with climate breakdown. During COVID, public spending had to rise to
protect profits. And it is equally obvious that, without some
government action on the cost-of-living crisis, the risks of what the
WEF calls “the erosion of social cohesion” are significant.

Once again, the capitalist state needs to ride to the rescue of the
capitalist class. But how can the ruling class square this imperative
with the need to keep workers in their place, especially at a time of
rising industrial action?

The answer is, of course, that they can’t. Cue frenzied discussion
about
“stakeholder capitalism” and “international cooperation.”

The ruling class doesn’t want to have to rely on the state as a
spender of last resort for fear of the impact this might have on
working-class power. But they also realize that they need some
institutions capable of fostering coordination and collaboration among
the global capitalist class.

By bringing these men (and a few women) together in one room, the
self-proclaimed guardians of the capitalist world system can plead
with the interests assembled to work together to safeguard their own
futures — even if that means making decisions that might run
contrary to their short-term interests.

Of course, the very nature of capitalism makes it very difficult for a
corporation or financial institution to do anything that runs contrary
to their short-term interests. Why would the owners and managers of
the world’s most powerful private institutions sacrifice money and
power today to protect a future that most of them are unlikely to live
to see?

Even if, out of some latent sense of social responsibility, a few
executives wanted to change the way their businesses worked, the very
nature of capitalism means that one business’s unearned profit is
the potential profit of another.

This brings us to another potential solution to the problem of
collective action found within capitalist societies. If all the
world’s most powerful corporations ceased to compete and actually
began to cooperate, they would find themselves able to plan in a way
usually thought to be the preserve of states.

Competition has already decreased substantially in recent years as
large corporations have merged with or acquired their competitors,
with regulators doing little or nothing to stop them. And with the
rise of large asset managers like Blackrock, a few institutions now
own shares in pretty much all of the world’s largest businesses,
making them the new permanent owners of much of the world economy.

Perhaps those assembled at Davos believe they can rely on Larry Fink,
the CEO of Blackrock, to force the managers of the companies whose
shares he owns to behave “responsibly.” But Blackrock declines to
support the majority of shareholder motions pushing for more action on
climate breakdown, with Fink saying that such motions have become too
radical in recent years.

The only option left for what Gramsci would have termed the “organic
intellectuals of the ruling class” is to publish reports, assemble
the world’s most powerful people, and hope that by some miracle they
all agree to do as they’re told. They’re likely to be
disappointed.

As Geoff Mann has argued, Keynesianism was an ingenious attempt to
save capitalism from itself, protecting human civilization in the
process. But today, it has become clear that human civilization cannot
be saved without moving beyond capitalist social relations.

The greatest risk the world faces comes from the class currently
assembled at Davos. If they really wanted to save the world, they’d
hand over their wealth and power to their workers — the only class
with the ability and the incentive to deal with the challenges the
world currently faces.

Of course, at this point in human history, working people are far more
scattered and divided than the ruling class. Our only hope is that
this period of industrial action and class conflict leaves a legacy of
working-class solidarity and cohesion that would allow people to take
on these challenges together.

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Grace Blakeley is a staff writer at _Tribune_, and the author of
_Stolen: How to Save the World from Financialisation_.

* Davos; Capitalism; Working Class;
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