Everyone at Davos this year really wants you to know that the corporate world is cleaning up its act. Yes, O.K., maybe they’ve said things like that before, but this year they mean it. Walking around, I thought, at times, that I had mistakenly wandered into a business-casual Bernie Sanders rally: unrestrained capitalism has gone too far; corporate greed has endangered the planet; the time has come for radical change. On the train into Davos, a representative of Philip Morris told me that the company is “dedicated to a smoke-free future.” I blinked; she said the company has “a duty” to millions of addicted smokers.
Woke capitalism, in short, was the dominant motif at Davos 2020. Its visual symbol was a group of teenage girls and boys who were invited to Davos as “change-makers,” a gang of Greta-Thunbergs-in-training. They provided a visual contrast to the great masses of aging men in bluish suit jackets, and they were a particular delight to photographers, who stalked them like rare animals, which in a way, they are. “The forum used to be made up of a lot of old, rich white men,” explained Naomi Wadler, a 13-year-old anti-gun advocate, who perhaps was unaware that it still is. Though, to be fair, a record 24 percent of the participants this year were women.
At an anti-capitalist capitalist event, revolutionary sentiments can erupt in unexpected places. Will. I. Am, the musician, interrupted a fancy private concert co-hosted by a billionaire, Marc Benioff, to explain that he has come to see “talentism”— in which human ability is the dominant resource — as the replacement for capitalism. Benioff himself declared the next day that “capitalism as we’ve known it is dead,” and called for higher taxes on the wealthy. The range was broad: At an event entitled “2030,” Lucian Tarnowski and his cohort predicted a new golden age of human thriving following various radical changes, such as the overcoming of material wants and broader use of psychedelics for emotional health. And in an official nod to the revolutionary spirit, the World Economic Forum itself, which runs the show, released a new “Davos Manifesto,” for the “fourth industrial revolution.”
That Davos Manifesto is, I hasten to say, good stuff (as is the forum’s new “ESG” metric, designed to complement profit as a measure of corporate success.) Companies, the manifesto says, must pay their fair share of taxes; treat suppliers and workers well; accept fair competition; and have “zero tolerance for corruption.”
Unfortunately, there’s no particular requirement that Davos attendees actually sign or adhere to it. Donald Trump appears to have personally violated nearly every one of its dictates, yet he was a warmly welcomed opening speaker. Nor have the corporate attendees consistently endeavored, as the Davos Manifesto demands, to pay their “fair share” of taxes, continuously improve the “well-being” of employees, or treat “executive remuneration” responsibly.
It is true that good intentions are better than their opposite. Yet if Davos truly wants to redirect the ship of global capitalism, it should find some way to better reward actual do-gooders, as distinguished from the posers. It is just too easy to free ride at Davos: to talk the talk, adopt a few cute pet projects, and let that be it.
So why not make future attendance at Davos limited to those companies who pledge agreement to the Davos Manifesto, and lean harder on miscreants? Why not, for a start, suspend all members convicted of bribery or other serious ethical offenses? The major cigarette companies were quietly disinvited from official Davos events: Should the American sellers of opioids really be showcased at an event committed to “improving the state of the world?”
The forum’s traditional response is that Davos needs be a neutral platform, open to contending views, and even to those who are resistant to its goals. As Klaus Schwab, the founder of the forum, says in a new documentary, “If you were a priest in a church, you would want to make the sinners come visit you on a Sunday.”
To give Mr. Schwab fair credit, it is true that, for all but the most corrupted of institutions, real change usually comes from within. For the corporation, the virtue and character of its leadership, the internal culture and upward ethical pressure from employees can make all the difference.
What the World Economic Forum promotes is a process of joint self-realization — a kind of group therapy for chief executives — that, in theory, leads companies on the path toward more responsible approaches to doing business. And what, you might ask, is so bad about having the rich and powerful come together, pledge to clean up their acts, and hopefully go home and sin no more?
The problem is, it leaves behind one big hole. Why make hard changes if you can just get away with saying you mean well — “virtue signaling”? For every Microsoft, which made an expensive pledge to eliminate all of the carbon it has ever produced, there’s a Johnson & Johnson, claiming that it strives to “create healthier communities,” despite being recently fined over $450 million for fueling the American opioid crisis. (The company is appealing.) In a CNBC interview at Davos, Ericsson’s chief executive made the far-fetched claim that adopting 5G telecom technology (of which it is a leading provider) will help fight climate change. And as Greenpeace has pointed out, the banks in attendance, while pledging to help save the planet, have, since the Paris Accord, invested more than a trillion dollars in fossil fuel.
This is why, without some way of distinguishing real change from cheap talk, cynics will continue to see it as a grand exercise in hypocrisy. Or, perhaps, an excuse for governments not to do their job, because, hey, I was at Davos and the private sector told me they’ve got it all taken care of. The remaking of capitalism is an important and fragile undertaking, because it is hard to be the nice guy if your competitor is still playing by the old rules. That’s why, without some carrots and sticks, stakeholder capitalism will always be at risk of being a fad, an appeasement, as opposed to the deeper transformation it might become.
Tim Wu, a contributing Opinion Writer.