Into ze Future mit Stakeholder Capitalism

Peter Smith06 Jun, 2022 4 Min Read
The return of S.P.E.C.T.R.E.

I thought of the song “Tomorrow belongs to me” from the movie Cabaret when listening to Klaus Schwab’s opening remarks at last month’s extravaganza in Davos. His pronunciation of ‘the’ as ze (according to my inexpert Standard English phonetic rendering) adds to the perturbing Teutonic effect. Be perturbed.

Ze future is not just happening. Ze future is built by us. By a powerful community, as you here in this room. We have the means to improve the state of the world.

He must have seen the movie. Subliminally, the unsettling phraseology pops out. Mind you, don’t discount the possibility that he’s deliberately messing with our minds. If so, it worked on me.

Australia’s eSafety Commissioner, Julie Inman Grant, got a spot at Davos. Didn’t recollect that we had an eSafety Commissioner, though she’s been in the job since January 2017. Maybe most countries have something similar these days? Fine, if they are employed to track and counter child sexual exploitation. But, of course, Parkinson’s Law prevails as does its counterpart, mission creep. A new Act (2021) gives Ms Grant extended powers to regulate online content. Has this gone to her head like bubbles in a glass of champagne? Apparently. There she is at Davos telling the assembled VIPs that we need a “recalibration” of free speech.

Here's something else. In 2020, the World Economic Forum (WEF), together with Apolitical, a global organisation of government bureaucrats, whose mission is to “help build 21st century governments that work for people and the planet,” appointed Ms Grant as one of the, so-termed, #Agile50. To wit, “one of the most influential leaders revolutionising government.” Who knew?

I dare say Nina Jankowicz would have been in line for a similar honorific; if only the Disinformation Governance Board had not been wantonly sabotaged, so it's sadly said, by disinformation. Anyway, it’s all too much for me to take in. The future obviously doesn’t belong to me.

What is the future? A good question to which I seek answers from the revised Davos manifesto issued in 2020. And, for historical perspective and to get a sense of the trajectory of the WEF's "Great Reset" agenda, I compare this with the first manifesto; issued in 1973, only two years or so after the WEF was established in January 1971. The 2020 manifesto declaims on the purpose of a company in the so-called fourth industrial revolution; the 1973 manifesto, on a code of ethics for business leaders. They are similar yet subtly, and not so subtly, different. Evolution has occurred.

“Professional management” charged with serving the interests of “stakeholders” in the first manifesto, morphs into the “company” in the second. This is not incidental. Companies encompass boards and large influential institutional investors as well as professional managers. All must be engaged in order to change the nature of capitalism and the world. And it’s working. It’s hard to find a company board or large institutional investor these days which hasn’t adopted ESG as its Holy Writ. Management eagerly complies with the expensive help of supremely woke major consulting firms.

AGL, Australia’s largest electricity supplier, had planned to split out its coal-power business. Along comes large shareholder, and green enthusiast, billionaire Mike Cannon Brookes, with institutional investors in his wake. A coal business on its own might not be eager to self-destruct. Won’t do. The split is derailed. Welcome to the world of the second manifesto.

To be clear, the manifestos are not all bad. Both emphasise the need for companies to earn sufficient profits, act ethically and pay their taxes. Ho-hum. Also, it’s unexceptional, on its face, for businesses which want to thrive to pay heed to the interests of their stakeholders. Small businesses know this instinctively. Customers matter, as do employees. As does the environment within which they operate. Being antisocial by throwing garbage into the street or local river might not be conducive to long-term success. Thus, you might query, why does the WEF make so much of stakeholder capitalism?

Two points. First, the focus is on companies rather than on businesses more generally. It’s all about the big guys. As Herr Schwab says, it’s about the “powerful community,” executing an agenda determined by, wouldn’t you know, the powerful community. It’s not immediately clear that this kind of stakeholder capitalism goes to the interests of small business or, say, those coal miners living in Poland or West Virginia. who find themselves unable to learn computer programming. Ah well, one can't make an omelette without breaking eggs.

Second, is the sheer reach of Schwab’s stakeholder capitalism. In the first manifesto this is described as management assuming “the role of a trustee of the material universe for future generations.” Can’t see Con the fruiterer in the corner shop embracing that concept very easily. The second manifesto goes further in asserting that a company “acts as a steward of the environment [as well as] the material universe for future generations [and that it] consciously protects our biosphere and champions a circular, shared and regenerative economy.”

Instructive too in the second manifesto, missing in the first, is the reference to multinationals. A multinational company, it says, “acts itself as a stakeholder—together with governments and civil society—of our global future.” And in case you think such a company might simply make, say, cars for profit, it’s required as being part of “corporate global citizenship [to collaborate] with other companies and stakeholders to improve the state of the world.”

As I’ve noted, serving stakeholders has always been part of capitalism. The leap in the first manifesto is to focus particularly on professional managers and to enjoin them in protecting the material universe. Where that starts and stops is anybody’s guess. The leap in the second is to broaden the focus to companies—and big ones to boot—and to enjoin them collectively as global citizens in protecting the biosphere; and, back to Schwab’s opening remarks at Davos, in improving the state of the world.

Improving the state of the world is like a team aiming to win a cup final. It comes from having the right systems in place. That doesn’t guarantee success, but it’s an essential prerequisite. The system of free-market capitalism has put trophies galore in the display cabinet. Got that perfect feeling that a rewarding future won’t stem from Schwab’s souped-up version of stakeholder capitalism, orchestrated by a global elite?  A miserable future? It’s happening. Covid diktats, soaring energy prices, power rationing, ESG, CRT, DEI; throw in rainbow flags, transgenderism, puberty blockers, regularising drug use, etc. Foretastes one and all. Willkommen, Bienvenue, Welcome.

After a career in economics, banking and payment-systems management, Peter Smith now blogs on the topics of the day. He writes for Quadrant, Australia’s leading conservative online site and magazine. He has written Bad Economics, of which, he notes, there is much.

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