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Business-Managed Democracy

“Business-managed democracies are those in which the political and cultural arrangements are managed in the interests of business”

Sharon Beder

Business-Managed Government

World Economic Forum (WEF)

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The World Economic Forum (WEF) is a private group of top level business people who meet annually at the Swiss ski resort of Davos, and at numerous other more specialised meetings during the year, to network, have private discussions, share information and ideas, form alliances, and influence policy-makers. A “club atmosphere” is deliberately cultivated and a “privileged, informal, framework for intensive business networking”.

 

Setting the Global Agenda

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But business people also come to WEF meetings to set the economic and political as well as the business agenda worldwide. The WEF claims, on its home page, that its annual meeting in Davos “is now considered the global summit which defines the political, economic and business agenda for the year.” The WEF’s web pages describes its deliberate role in shaping the global political agenda:

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In building a content and process orientation, we will be moving away from an "event approach". One of our initiatives in this respect is the Centre for the Global Agenda (CGA) which will serve as a catalyst in defining, monitoring and driving the global agenda. It will act as a hub of networks and alliances on important global issues and will play a key role in the world's international system.
This orientation also encompasses our Centre for Regional Strategies which provides our members with privileged opportunities to have an impact on policy making in the world's regions.

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Claude Smadja The WEF Managing Director, Claude Smadja (pictured), described the 2000 Davos meeting as “a unique opportunity to set the tone at the outset of a new era, to send forceful signals on the orientations we should take, on the strategies we need to implement in addressing the new economic, technological, societal and geopolitical realities of the 21st century.”

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However the need to appear to be more open and avoid the appearance of backroom dealings has not been lost on WEF organisers.   It has sought to present a more open, humane persona and it has raised its public profile.  Its meetings WEF meetinghave sessions that are open to carefully screened media and are reported on its web pages. These sessions are often addressed by invited representatives of NGOs who are sometimes critics of unrestrained economic globalisation. However the key part of the meetings are the many private discussions that take place during these meetings and the WEF’s web pages have sections that are only accessible by members. One journalist described how the “working press” at Davos (as opposed to the club of Media Leaders mentioned above) are kept in a “dungeon like basement” and fed “reams of handouts, session summaries and snatches of the proceedings watched on live, closed-circuit TV”.

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Membership

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Klaus Schwab The WEF was founded in 1971 by Klaus Schwab (pictured), a professor of business administration at the University of Geneva and a German engineer. He organised a European Management Forum for CEOs of 44 European corporations to get together and discuss issues of mutual interest, including becoming competitive with US corporations. The Forum expanded to include corporations from other parts of the world, particularly the US, and to include political, economic and social issues into its discussions. In 1987 it was renamed the World Economic Forum (WEF) and today claims to be the world’s “foremost global business network”.

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The WEF is not a decision-making body but one that has power through the financial power of its members. It wields influence through bringing the world’s top business people and  top policy makers together at its meetings. Lord Major of Melbourne, Peter Costigan, a supporter of the WEF, argues that “The most accurate description of its nature is that it is the world’s most significant talkfest, with more economic and social influence than the United Nations and International Monetary Fund combined.”

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The WEF has a thousand foundation members, who are current CEOs of the world’s largest corporations. Membership is by invitation only and is restricted to corporations that have over $1billion in sales and banks that control over  $1billion in capital. The WEF is funded by its members.

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Activities

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The WEF also produces a bimonthly magazine called World Link which is aimed “senior management in the world’s largest corporations and financial institutions…and senior government figures and their advisers” and claims to be “the most powerful offered by any targeted business publication”.

Members can belong to a number of private clubs that the WEF has established “to bring together individuals committed to strengthening international cooperation in their particular fields. Each group is private and admission is limited in order to preserve their peer character”. These include:

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Government Access

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Government leaders are invited to WEF meetings enabling business leaders to have high level access to government ministers, prime ministers and presidents. The WEF claims to be the “leading interface for business/government interaction”. In 1982 the Forum invited the heads of major institutions such as the World Bank, IMF and GATT, as well as cabinet members of “major countries” to its annual Davos meeting for the first Informal Gathering of World Economic Leaders. Various other Informal groupings were subsequently formed including an Informal Gathering of Trade Ministers.  The Forum also created “CEO clubs” of the Chief Executive Officers of the largest corporations in thirteen different industry sectors.

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Schwab claims that “Chief executives do not come to Davos to learn how to make money… They come to improve the world.” However the needed improvements are seen through corporate eyes and a key improvement that they promote is economic globalisation and open access for corporate investment and trade.

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The WEF claims it “played a major role at the beginning of the eighties in launching the Uruguay  trade negotiations which resulted in the formation of the World Trade Organisation, which puts free trade ahead of other social and economic considerations.  The WEF also claims that it “has made a contribution to the process and negotiation of financial services liberalization, through private meetings among key players” in 1996 and 1997.

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According to researcher James Goodman, “WEF strategising drove the neo-liberal agenda in the 1980s… It offered a proactive forum, removed from the public gaze, and played a central role in diffusing neo-liberalism and was highly effective in extending the reign of the market.” Similarly, Kees van der Pijl, in his book Transnational Classes and International Relations, states that “Until well into the 1990s, the WEF was a pivot of neoliberal hegemony”.

The WEF claims on its web pages:

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Over the past 27 years, the World Economic Forum has evolved into a major force for economic integration at the corporate as well as the national economic levels. It has played a key role in identifying new trends in the economic, political, social and cultural domains, and in shaping strategies and actions for corporations and countries to integrate these changes and maximize their potentials.

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Business Values Dominate

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Schwab, who presided over the WEF for almost 30 years, says “My value system is very simple. It is that at the end, economic and social progress can be only achieved through entrepreneurship.” Schwab also argues that the “sovereign state has become obsolete” and the preference of those attending Davos is that national governments become subservient to corporate and financial interests.

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The WEF produces a Global Competitiveness Report which, according to critics, “ranks governments for business friendly policies”. According the the WEF, competitiveness depends on having small government, minimal government intervention in or regulation of the market and good incentives for investment in new technologies. 

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In its Europe 2050 report the WEF identifies the major concerns facing Europe as being youth unemployment and the associated marginalisation of youth, the cost of the welfare state, the access of entrepreneurs to capital and the aging population. It argues that a successful society “will afford its citizens the possibility to develop and contribute on a fair basis”, that is to ensure that they work, and equip institutions, particularly corporations one supposes, “with the capabilities of continued growth and development”. Therefore, “European countries must change agendas, direction and priorities in order to prepare for the future”. A future that suits the corporate members of the WEF.

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Environmental Issues

The WEF is also involved in environmental issues. It was official adviser to the Earth Summit in 1992 and was one of the many business groupings that prevented Agenda 21, the Rio Declaration and various treaties from calling for constraints on free trade or the activities of transnational corporations and their free access to markets.

At its 2000 meeting in Davos it was suggested that NGOs needed to be more accountable and suggested that an internet site be developed “that would rate NGOs according to their effectiveness, in order to help provide guidelines to potential donors.” Accountability of NGOs was also the subject of another session which concluded “In a best-case scenario, questions of legitimacy and accountability will eventually be settled and more constructive partnerships between business and NGOs will develop”.

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