Into ze Future mit Stakeholder Capitalism

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.

Diary of an Acclimatised Beauty: Davosing

Hello Davos at long last! It feels a little weird—being here in summer, and also like the prom date who's been stood up four times. but Davos is on, and there are 1,500 private planes here to prove it. I’d hired an assistant named Mila for the conference because I couldn’t very well be seen setting up my own meetings or trying to get myself into parties. I had several invites already but you never really do know which ones will be the hot ticket until you get here.  I’d also set her to the task of sorting out a driver.

A summer conference meant summer clothes, and I refused to be clomping around in wedge-sandals just because modern pavement hadn’t met old Europe. This is among the things Americans find particularly galling and I am starting to agree with them. Hotels never advertise the abysmal water pressure, the inability to use a hairdryer in bathroom, or the two children’s beds shoved together and presented as a king. 

I walked through the Partner’s Lounge after checking in with hospitality and could see there were very few women, in addition to a thousand fewer attendees than in previous years. It was hard to know if the drop-off in attendance was rising anti-elitist sentiment, or Putin's war in Ukraine, but many of the A-listers weren’t coming at all. Not Biden, or Boris, or Macron, or Prince Charles or even Greta. And not even Jamie Dimon, which was a double blow because Jamie’s always liked me, and it meant no JP Morgan Chase-hosted suite. Boo! In its geographic place this year is the Covid testing area, to which we all had to submit upon arrival.

Welcome to the World Environmental Forum.

Mila arrived on foot, and with a local bus map mumbling something about Line 4 (Flüelastrasse). Bus? This wasn’t going well. I was going to have to skip the second half of Xi Jinping to get ready for the India Today party.  It’s just as well, it was hard for me not to focus on the singular-plural mismatch by Xi’s translator. Also I wasn’t happy Klaus opened with Xi. I know we are the World Economic Forum but let’s be honest, the environment is our focus and I won’t give China any credit in that department. Detractors may find us duplicitous (we really should be called the World Environmental Forum) but they don’t grasp how important it is to do our fine work by any means necessary.

India Today went all out for the party, even if it wasn’t terribly exclusive. India itself had the biggest presence at the conference and they wanted to make sure everyone knew it. They had a hundred CEOs and a dozen government leaders. They insist its ‘India’s Century’, that they have the talent pool, and that they played a critical role in vaccinations. Did they? I seem to only remember Donald Trump saying he personally saved two million lives with his vaccine. But tonight I am to accept that India contributed the most. Maybe. But the planet is my passion and as for India… it was #2 on my environmental offender list, and I didn’t have a #3.  

Also missing from this year’s conference were every single one of my clients. It was just as well because the theme seemed to be bullseyes on the billionaires. And I was having a tough time squaring this because everyone that I work with is committed to zero carbon emissions and doing what they can to save our planet.

Day two came both bright and early. Perhaps one too many Mumbai Mules. The last I remembered was a back-and-forth between California’s Darrell Issa and England’s Nick Clegg.  I don’t know anything about Mr Issa but the most interesting thing about Nick is his wife and he turned up without her. Separate from that, I’ll never understand why he thought it smart to tell GQ he had bedded ‘not more than thirty women’ but I think he will always be remembered for his failed attempt to reform the House of Lords. All of this escaped Mr Issa, an American congressman who used to chair something called ‘The Oversight Committee’. That kept me laughing most of the night. 

Klaus Schwab

And the winner is...

Today I get my Schwab Foundation Award! I wanted to wear an asymmetrical Armani knit but I was afraid it wouldn’t photograph well so I opted for a sustainable label. No sooner had I stepped off the stage, I was rushed by a pre-pubescent prat sporting the dreaded orange (press) badge. UGH! He wasn’t here to congratulate me either. He launched into a rant against Barclays (the presenter of the awards). Seriously? How dare you! I’m the bug hostess, and my efforts may just make the difference between saving the planet and not! Plus I was kind of hoping I might parlay this into a stakeholder position with Barclays. ‘By the way, Barclays—you idiot—just set aside £17m for a sustainable impact programme’, I said, moving away from him. ‘…and they provide menopause support to retain their top talent!’

I think the last bit shocked him but he yelled back, ’Barclays' renewable energy banking chief has served on the board of the Sierra Club!’ 

‘Well yay Barclays!’ I retorted, really trying to lose him this time. Why is everybody so cranky post-Covid?

He wouldn't stop. ‘But the Sierra Club has been killing off nuclear plants around the U.S., while taking money from renewable energy companies. Turns out it’s a very lucrative business’. 

UGH! He had me and I knew it. Nuclear is by far the safest way to make reliable electricity and its particulate matter is insignificant compared to the particulate matter from fossil-and biomass-burning homes, cars, and power plants, which kill more than eight million people a year. I said nothing and left the room. It was day three and I was sure to let security know one of the orange tags had slipped through and harassed me. Orange Man Bad! as the saying goes.

I decided to interview a few folks myself, to discuss the things I wished to discuss and was heading straight for Henry Kissinger when Winnie Byanyima, the executive director of UNAIDS thrust herself into my mic. Oh Lord. Keep it light I thought, as she jumped right in. ‘Extreme inequality is out of control, it’s undermining our economies, and fueling crime’, she said. 

‘Thank you’.  I said. I'd heard her speak earlier. She thought if anyone has any more than another, it qualified as inequality and someone was cheating. ‘We don't want countries to simply come to Davos, we want them to put the burden on companies and rich people'. She used the example that in 1970 the top  tax rates were around 62 percent and that today they've been 'negotiated down by rich people’. 

‘Do you know I work with poultry workers in the richest country  in the world?  The United States?  And the poultry worker I spoke to has to wear diapers because she is not allowed to go to the bathroom.  These companies pay their CEOs well and cheat workers down the line’. 

Of course I didn’t know any of this, nor did I believe it,  but she wouldn't shut up so I googled it on my phone to find that the average salary of a poultry worker is $29,000 a year or about $14.10 per hour. No mention if that included diapers. ‘Do you know that $170 billion of profits, every single year, does not  get taxed? Think about that, $170 billion a year that is not given to others to support themselves', she banged on.

No diapers and 14 bucks an hour too!

There was no point explaining to her that all profits were not owed to someone else, and that if every country that came to Davos was forced into 'the burden of high taxation' no one would come here. This she called inequality. And  she went on about how 'jobs were not enough… people need dignified jobs'.  Fascinating really. This woman from Uganda, now making a quarter of a million dollars a year, was telling me that American jobs were not dignified--enough. And failure to hand over profits was stealing.  'Not dignified enough',  she insisted.  

I wanted to ask if she knew there were nearly ten million slaves in Africa but I did not.  But more than that, I wanted her to shut up. Apparently she had checked with the IMF and they told her, companies could afford to pay more. And in her mind that translated to must. This she explained, would fight climate change because apparently with more money, the first thing people  do is become passionate about their carbon footprint.

I tried to interject, and eventually I said:  'As I haven’t the occupational garments of those poultry women… I really must excuse myself.’ Suddenly, I was thankful for Mila and her bus schedule. 

Diary of an Acclimatised Beauty: Boarding

After participating in a disastrous environmental conference, I headed straight to my childhood home in St John’s Wood, only to find Daddy and Judith had gone to the country.  Granted they hadn’t expected me, but some notice would have been nice. It was just as well—I was frustrated with the way the conference had gone and just wanted a curry and a hot bath.

I woke up the next day refreshed, and decided to drive to Le Manoir in Oxfordshire and tuck into one of their eco-friendly suites.  I wasn’t up for any of their cooking or gardening programmes but I pinched some books from Daddy’s study and set off to arrive before lunch. 

The check-in process took an eternity. They are understandably proud of their Green Michelin Star, but I also had to hear about the 100% recyclable amenities, sensor lighting in the bathrooms, a state-of-the-art Rocket Composter, soaps and candles that get re-crafted by local seniors (re-crafted into what I did not want to ask!), and newspapers that are sent to Tiggywinkles Wildlife Hospital to be reused as bedding. Perhaps just a tad TMI?  I mean I don’t want to be thinking that my morning paper is going to be under some goat’s bum. As it stands I was just getting over learning that Prince Charles never leaves home without his favourite loo seat and velvet lavatory paper.

No green too Green for HRH.

In point of fact, all sustainability measures tickle my little green heart, but at £1,200 a night, I did not want to be thinking about their much-touted closed-loop waste system (whatever that even is!). I nearly had to shove the bellman out of my room to make it to luncheon before the cutoff.  Seven courses later, I couldn’t keep my eyes open. Wine without meat (I chose the vegan) packs an extra punch. I made my way back to my room and flopped on the bed which felt like Egyptian cotton but at this point I was beginning to wonder.

I might have slept right through the day but my phone started buzzing as it usually does around this time. No sense closing my eyes… I was up. UGH. I grabbed my earbuds and dialled my father.  

‘Yes, Jennifer', he answered. ‘We missed you at the end of the conference.’

‘Yes I know, I left. Obviously.’ 

‘Obviously’, he replied.  

I was grateful he didn’t push it. ‘So I was thinking of joining a board… I mean, I’ve been asked to join a board. It’s a pretty big deal'.

‘How big?’

‘HSBC big.’

‘I see', he said. ‘Because you know so much about banking?’ 

‘Obviously no’, I huffed. 'Because I can contribute in ways that help them meet stakeholder capitalism metrics'.

Stakeholder capitalism: everybody's a winner!

‘But they don’t need you for that', he observed. 'They can just make things up without any input from you or anyone else'.

‘Ouch! Not nice'. 

‘Actually I’m being very nice', he said. ‘Generous, even. I’ve always supported your ideas, pointed you away from avenues that were not well-reasoned… but this is crackers'.

‘I don’t agree that this is crackers, but historically you help me do my job, even if you don’t agree with it'.

‘Yes, and I will', he said. 'But understand exactly what you are doing here. You are essentially the mob'.

‘As a board member??’ 

'No, as you—Jennifer—thorn in the side of corporations. You are saying hire us to give our opinions, and if you don’t we will hurt your business'.

‘It’s not as simple as that’, I insisted.

‘Actually, it is. You can confer no benefit, you don’t know that your beliefs will improve the company’s bottom line, you don’t have the ability to affect their performance or their profitability. What you offer, is extortion: Pay us or else'. 

He had a point. UGH. ‘Okay…’ I continued. ‘I’m not saying I agree, but Klaus says that global challenges amplified by the COVID-19 have made…’

‘Stop right there. Covid didn’t amplify. Governments amplified. Unprecedented restriction amplified.  And governments, and shake-down artists like Klaus, searched for and found ways to use a health crisis to address other problems. Not to mention previously unimaginable levels of public spending. I submit to you this unprecedented restriction and profligate spending is why they were able to sell it as a pandemic, and why from the very start, it seemed more dramatic than a health crisis—because it was'.

Your papers, please, comrade.

My mind flipped through my many chapters of Covid.  The lockdowns, the travel restrictions, the fear, the confusion, all the take-out food—crazy time. And not to mention the cancellation of Davos—three times,  when in truth  we were all getting on with our lives as best as we could… still flying… still… OK, he had a point.  

‘So Jennifer, I’m not saying don’t take the position—take it.  If you don’t someone else will, and I know you will be more conscientious than the next fellow, but make an effort to reign yourselves in, and not be pushed to sound like a complete nutter'.

 ‘Meaning?’ I asked. 

‘Meaning don’t assume you are right just because it’s what you want. The jump from shareholder to stakeholder was a very slick manoeuvre. And I believe when they realise all they’ve done is let the fox in the henhouse, they’ll want an accounting of every hen that went missing'.

Bright and early the next morning I rang to say I’d take the position. ‘Excellent', replied the woman at the other end of the line. Although she didn’t mean excellent. She asked about my 'additional qualifications'. 

‘Like banking?’ I replied. I mean, she had to know I didn’t know the first thing about banking.

‘No, no...' she said laughing as if I’d given the world’s funniest response to a question of qualification. ‘No, I meant, racial makeup—POC, or sexual identity'. 'As a qualif…’ I bit my tongue. Oh boy. She did mean as a qualification.

And just like that, I went from qualified to unqualified. Perhaps the shortest tenure of a board member in history.  

The Davos Road to Serfdom

A recent tweet from Alexandria Ocasio-Cortez: “In a modern, moral, & wealthy society, no American should be too poor to live.” There is nothing remarkable about this empty trope. Scratch any leftist. Out it comes. Even those on the right of the political spectrum might nod along in unthinking moments. The Archbishop of Canterbury and the Pope would nod along in their thinking moments.

Christian religious leaders are prone to flights of fancy. Justin Welby and Francis are keen on so-called inclusive capitalism to solve the ills of the world. Utopia in the here and now. Heaven can wait. Call it also stakeholder capitalism, if you prefer the nomenclature of Klaus Schwab’s great reset of capitalism.

A first thing to say is that this surreal transfiguration of capitalism has no correspondence with reality. It’s made up. A chimera. It cannot be brought to sustained life. At least not the life envisaged. It could morph into something which can be brought to life; albeit a dissolute life. It’s called socialism.

Would you buy a used electric car from this man?

A friend of mine, and fellow Christian, is fond of echoing Gottfried Leibniz (1646-1716) in asserting that the universe and all of its contents, animate and inanimate, could not have been better made. It’s an article of faith but impregnable. Try something. For example, if only those pesky tectonic plates didn’t move and cause devastating earthquakes. Okay, if you want to sit on a powder keg in flatland. Everything is on such a knife edge that serious tampering always leads into an abyss. Capitalism is like that.

Capitalism is “free-market capitalism,” or else it isn’t capitalism at all. Yes, I know, capitalism is always accompanied by cronyism and never more so since global-warming boondoggles took off, but that in itself speaks to its power to survive sleazy deals.

Schwab sets "stakeholder capitalism" against what he calls shareholder capitalism, which he associates with (scary) Milton Freidman. But shareholder capitalism is, in fact, another name for free-market capitalism. Owners looking primarily to increase their profits is the way shareholder capitalism, aka free-market capitalism, works to make everybody better off. It’s the reason why poverty in the industrialised world has continually trended down since the mid-eighteenth century.

Best to remember too that the term shareholder capitalism gives a distorted picture of capitalism. Capitalism isn’t just a collection of giant corporations. For example, businesses with from one to 999 employees, account for almost 60 percent all U.S. private sector jobs. Those wielding influence at Davos should put themselves into perspective. Private jets tend to beget arrogance.

How the one percent lives.

We need a better understanding of capitalism. It dispels flights of fancy. As I’ve previously argued, capitalism is akin to a “living system.” Living systems (see James Grier Miller’s defining work) are systems which self-organise and interact with their environment. They are open systems which resist entropy. The second law of thermodynamics has its way with all closed systems. Entropy eventually undoes them.

An open system must have inputs which are higher in complexity than its outputs. Among other things, this gives it the capacity to forestall decay and undertake repairs and renewal. Additionally, an open system must have what Miller calls “a ‘decider” which causes its components to interact optimally.

Only free-market capitalism meets the requirement of an open economic system. A complex brew of resources—raw materials, skilled labor, physical and financial capital, ingenuity, invention, innovation and entrepreneurship—freely interact to produce outputs in the form of goods and services. The “decider” is market prices, which govern where resources are allocated. As for relative complexity, consider the engineering ingenuity which forms just one part of the inputs in producing, say, motor vehicles.

Now consider so-called stakeholder capitalism. “Shared value creation” must predominate according to Schwab. “Environmental, social and governance (ESG) goals… should complement financial metrics.” Executive salaries “should align with the new measure of long-term shared value creation.” Large companies should “work with other stakeholders to improve the state of the world in which they are operating. In fact, this proviso should be their ultimate purpose.”

A fascist spanner in the works.

At every step the open system is stymied. Profitable opportunities can’t be seized. Instead, they are subject to almost never-ending processes to discover their compatibility with normative external aspirations. Executives are prevented from seeking maximum reward and thus businesses which can best employ their skills are denied their services. Large companies face the unenviable and impossible task of improving the world. How’s that for inducing entrepreneurial paralysis.

One way or another, stakeholder capitalism walls off the economic system. Nebulous social and environmental obstacles are put in the way of the system responding to market forces. Prices aren’t the decider. Result: entropy and misery. Increasing prosperity is not an immutable facet of human existence. Plenty of examples of economic regression, e.g., real wages in Argentina more than halved in the thirty years between 1975 and 2005. I’ll leave it to Miller:

Walling off living systems to prevent [free] exchanges across their boundaries results in death by confinement... entropy will always increase in walled-off living systems.

Of course, there are no absolutes in real economic life. It is not a question of there being walls or no walls. How formidable are the walls, is the question? As to that, I don’t sense stunted ambition among the elite at Davos. And recall that a festering ambition to reset capitalism preceded climate-change alarmism and Covid hysteria. These are large dollops of additional grist for their build-back-better mill.

I’m sometimes prone to put the Great Reset in the category of bad things which might come about. A mistake. It’s already afoot; enervation underway: ESG and its ugly sister EDI (equity, diversity & inclusion) permeate boardrooms. Green lawfare, subsidised renewal energy, and woke financial corporations and fund managers are putting fossil fuels out of business. Except, that is, when it comes to Russian tanks and planes. Now there's a thought.

When the lights go out, expect not to see remorseful recanting elites but despotic measures to keep us energy-starved, newly-manufactured, serfs in check. Covid has given them practise runs. State premiers in Australia have shown themselves adept at tyranny, as have many U.S. state governors. As it turns out, mere novices compared with Canadian Duce Justin Trudeau. No shortage of willing Stasi, informants and Jobsworths to enforce rules. It’s time we stopped tiresomely pointing the finger at tyranny abroad and turned it inwards. Ask not for whom the bell tolls.

Awaiting the Future, Erasing the Past

He determined that the world would do better if he involved himself less. So wrote Amity Shlaes of President Coolidge in her history of the Great Depression. Here was a leader broadly content with the prevailing lot of his nation and I suggest, at the time, in sync with the feelings of most Americans. We now live in more disgruntled times. Still, sane nations and sane people are not systematically malcontent.

This brings me to those leaders and powerbrokers who almost entirely live for the future. They tend to despise the present and perforce the past. The future is all. Unlike the present and past it can be moulded; and, potentially, into a shape they desire. Malcontentedly, they lust after their own version of a better future. Take a couple of well-known dictators.

Hitler aspired to a Third Reich reaching across vast swathes of Eastern Europe. Xi Jinping aspires to ever-expanding Chinese hegemony. Dictators like these operate in plain sight. There is no mystery. But we have now in our midst another ilk of autocrats. Less obvious; just as real. Not dictators but, all the same, like dictators, they want power to mould the future. Their ambitions don’t go to territory or to national power. They want to change the way people think, work and live; they want to reset the agenda.

The coming Fourth Reich?

Pretexts presage power grabs. One or more are required. Climate change, the so-called third or fourth (depending on who’s counting) industrial revolution and, most recently, the response of governments to Covid have come together to provide a once-in-a-life-time confluence of pretexts.

The prime movers? Prominent is the World Economic Forum, whose executive chairman Klaus Schwab is a proponent of ‘The Great Reset’ and ‘stakeholder capitalism’. The Council for Inclusive Capitalism is a fellow traveller. Among many of the great and good, Bill Gates, George Soros with his misnamed Open Society Foundations, and Pope Francis are clearly engaged. Again, as with autocrats generally, they are deluded. But that doesn’t make them less dangerous to our prosperity and freedom.

It’s important to understand (though they might not) that they have not invented a third way. There is capitalism and individual freedom on the one hand and socialism and collectivism on the other. They are plumping for the latter whether they admit it, or see it, or not. They will likely, hopefully, fail in undoing our way of life; though, as I will suggest, the response of governments to Covid-19 is most worrying.

I will take each of the trio of pretexts in turn.

Tackling climate change offers the alluring prospect of undermining national governance in favour of global governance, run by elites, like them. This is very far from benign but, lucky for us, they have hitched their wagon to a crock. Renewable energy in the form of wind and solar is hopeless. You can only get away with it when you have dispatchable power at the ready.

Wind and solar now account for about 3 percent of the world’s energy generation. Already blackouts have occurred from Europe to South Australia to California. Exactly what will happen if that 3 percent becomes just 10 percent? Those hot or cold still nights will cause havoc. Quite simply it’s unworkable and will collide with real life. Its supporters would know that if they were not delusional.

Second to today’s industrial revolution. Schwab identified this revolution as the fourth in an article some years ago in the magazine Foreign Affairs. According to Schwab, it is characterised by “artificial intelligence, robotics, the internet of things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.” He, along with others, sees this revolution bringing profound and pacy breakthroughs; giving rise to production outstripping needs; to dislocation and unemployment. Dependency on government will soar. Just what is wanted to reset the agenda.

Good-bye to all that, right?

Troubling for them -- and fortunately for us -- it won’t unfold as they think. After three industrial revolutions have already played out, the labour force participation rate in the United States, in the U.K. and in Australia is higher now than in the buoyant 1950s. And there is no reason to believe things will be different this time. Those machine breakers of yore got it wrong as have current pundits. Market forces and human nature tell the story.

Businesses can’t produce products (including by using robots) and sell them at profit without customers who are inclined to own them and have sufficient wherewithal to buy them. A rising stream of production and falling employment do not gel.

As for human nature, ascetics and billionaires aside, men and women always want more goods and services than they are able to afford. Classical economists such as John Stuart Mill understood this. If Keynes had understood it, he would not have based his economics around scarcity of demand. If Schwab and company understood it, they would not pin their hopes on the fourth industrial revolution creating a superabundance of products and a needy mass of the unemployed.

Third to Covid, and arguably, the most threatening of the pretexts underpinning the Great Reset agenda. The response to Covid has been unparalleled in the history of plagues. A mild disease in terms of its lethality has led nearly all governments into upturning economic and social life. Even with vaccines normal life seems a distance away. As sapping as it has already been, it would be disastrous if it were a preview of the future.

New strains, ‘double mutants’ and novel viruses will regularly arise. In recent times we’ve had Asian Flu, Hong Kong Flu, Ebola, HIV, SARS, MERS, Swine Flu. And governments and their media cheerleaders are now practised in their hypersensitive response to germs. They seem to believe they’ve absolutely done the right thing by humankind. Even Donald Trump claimed he’d saved millions of American lives. Capitalism is adaptable and fleet of foot but continual lockdowns to fight viruses are not sustainable. The uncertainty created would cripple businesses, small businesses particularly, and inexorably increase dependency on government.

Leave aside the fluff about the industrial revolution, which will unravel of its own accord. Combatting climate alarmism and the attendant ineffective and costly counter measures remains core business. However, what needs to be combatted most right now is the overwrought response to Covid setting a debilitating template for the future.

What is 'Stakeholder Capitalism'? Part Two

As we saw in Part One, Klaus Schwab, the principal architect of the "Great Reset," contends that international organizations have been “too remote and impersonal for most people,” too opaque for “individual stakeholders to relate to.” The response, therefore, “must be to implement decision-making processes to include all of their stakeholders.” How is this to be done?

Somehow or other, all stakeholders will be included in a “consultative stage,” which seems more than a little farfetched. The “paperwork” would be endless and consensus difficult to achieve. And even if agreement were possible, it could easily be ignored by a supervisory committee. Yet, “stakeholder engagement in government” and “coordination on a global level” are presented as eminently feasible propositions, though their utopian shadow is scarcely to be disguised or dismissed.

Of course, it all sounds benevolent, commiserative and enlightened; we are assured that “companies, governments, international organizations and civil society can reinvent themselves” to the advantage of all. What could go wrong? 

I've got yours, Jack.

In some respects, the stakeholder blueprint reads like an update of Tommaso Campanella’s 17th century visionary treatise City of the Sun (predicated on Thomas More’s Utopia) in which private property and wealth disparities are expunged, citizens have no possessions, advanced technology is on display, and a cenacle of officials presides over just distribution of goods and chattels.

Ernest Callenbach’s Green pastoral Ecotopia lurks behind Schwab’s bucolic program as well. There is also more than a whiff of Plato’s ideal city-state as developed in The Republic, with its three social classes comprising the Commons (craftsmen, merchants, etc.), the Auxiliaries (police), and the Guardians (rulers, from which the Philosopher-King is selected). One remembers that these are all fictions with almost no purchase on reality. 

Indeed, to my mind, the project resembles an elevated, mandarin version of Portland’s CHAZ—Capital Hill Administration Zone—ruled not by gun-toting thugs but by a platoon of sophisticated oligarchs who think—or pretend—they can fence out the world of practical politics, high finance, competitive passion, the profit motive and, in brief, unreconstructed human nature. The fallen world will be replaced by an Arcadian substitute governed by a council of prebendary sages. Once the fictive paradigm is transferred to the world of practical affairs, we have a recipe for unintended consequences of the worst sort. 

For the system Schwab is proposing, as should be obvious, can neither be created nor maintained in the absence of rigid and authoritarian control by the helmers of a global fiefdom, as Joel Kotkin warns in The Coming of Neo-Feudalism. One recalls the Juvenalian maxim: Quis custodiet ipsos custodes? As for the “stakeholders” among the common people, they will irrevocably find themselves occupying serf-like status, dependent on Big Government, subject to constant surveillance, rendered largely sedentary, and generally deprived of agency.

"Stakeholder Capitalism" ultimately favors neither labor, small business, the middle class nor an open, free market economy. Politically, it is Karl Marx redivivus, whose “dictatorship of the proletariat,” elaborated in his seminal The Class Struggles in France, 1848-1850, leads inevitably to the dictatorship of a privileged elite, as history has decisively shown. Milovan Djilas’ The New Class and Karl Popper’s The Open Society and Its Enemies are essential reading here. Culturally, it is Antonio Gramsci released from his cell to sherpa the long march through the institutions. Herbert Marcuse’s “repressive tolerance” is the name of the game. Clearly, the only stakeholder who will benefit from the Reset is the manorial elect of politicians, technocrats and the super-wealthy.

We're ba-ack!

To give Schwab his due, he writes well. The prose is clean, his facts, though selective, are cleverly arrayed, and his claims, though outrageous, appear to attest to a modest and empathetic sensibility. He is a formidable adversary.

The reader must remain alert to Schwab’s sources and the historical context from which his argument arises: the mix of Fascist practice, that is, the intimate alliance between business and government, or syndical corporatism—as Cardiff University historian Kevin Passmore points out, the word “totalitarianism” was invented by Italian fascists—and Communist theory, the putative erasure of class distinctions and the emergence of an egalitarian society in which the state controls all property, resources and wealth.

Democratic capitalism is a deeply flawed system which nevertheless yields better social and economic results than any other. Moreover, it is always subject to improvement over the historical continuum. What Churchill said of democracy applies to its economic offspring, free-market capitalism. In a speech on Nov. 11, 1947, he reminded the U.K.’s House of Commons that “many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.” This is vintage Churchillian wisdom, which is sorely lacking in all world-utopian schemes like Schwab’s. 

Those who suspect that “stakeholder capitalism” is a euphemism for a nefarious plot using climate change and COVID as pretexts to capture the levers of power, shut down the functional energy sector and replace it with a futuristic iteration of techno-primitivism, kill small business, reduce the population to a condition of civil subservience, eliminate the free market, crash the economy and Reset to Zero may not be wide of the mark. Caveat emptor.

What Is 'Stakeholder Capitalism'? Part One

The concept of “stakeholder capitalism,” proposed by Klaus Schwab in his various books on the subject—in particular COVID 19: The Great Reset, co-authored with Thierry Malleret, and his latest foray in the field Stakeholder Capitalism, which faithfully reprises the points and principles of the earlier volume—is far more insidious than it sounds. From the perspective of the Left, the progressivist, the woke, “Capitalism” is, of course, a loaded word, but it remains the engine of the world’s most advanced economies, and its kinetics cannot be dispensed with. Market-dominated societies are perforce competitive and revenue-driven.

“Stakeholder,” however, is a detergent term, bleaching the semantic grime from its verbal companion, which is why it functions as a remedial descriptor. It comes across as friendly, compassionate and inviting. In its current usage, the word derives from the education industry, where it has become ubiquitous, highlighting the educators’ presumably favonian sympathies toward their students, fawningly regarded as “stakeholders.”

Originating in John Dewey’s child-centered, student-oriented educational theory, which he called “progressivist,” the idea has proliferated to the present day when students are empowered to issue demands, decide whom they want to be taught by and whom they want to be fired. It explains why we should be wary when it is used to qualify a social and economic program as vast and disruptive as the Great Reset.

Trust me, I'm German.

Placed under the loupe, stakeholder capitalism reveals itself as a sobriquet for international socialism. The corporate impetus is no longer exclusively directed toward profits but will be supervised, guided and restrained by government intervention. Or so we are led to believe.

In the wake of the pandemic, Schwab writes in The Great Reset, “Societies could be poised to become either more egalitarian or more authoritarian…[ E]conomies, when they recover, could take the path of more inclusivity and more attuned to the needs of our global commons.” Ironically, as history has proven time and again, in order to become more egalitarian, society will of necessity become more authoritarian. It’s a dynamic that approximates to a historical law. 

Schwab assesses the social and political impact of the pandemic in the five domains of Society, Economy, Environment, Technology and Geopolitics. This is what he calls the Macro Reset (of which the Micro Reset—industry and business—and the Individual Reset are specifications), a transformation which involves a “redefinition of the social contract” in the direction of “stakeholder capitalism and environmental, social and governance (ESG) considerations.”

The result will be a “better world,” portrayed as “more inclusive, more equitable, and more respectful of Mother Nature.” He envisions a tectonic shift from capital to labor, of wealth distribution from the affluent to the needy, and of greater government interventions in the functioning of the economic system, customary arrangements, social architectures and cultural dynamics in order to ensure “global sustainability.”

It's easy, too!

A proper management of the economy and social life will entail a number of salient factors. Companies, for example, will have to reconceive their “fundamental purpose” from unbridled financial profit to that of “serving all their stakeholders, not only those who hold shares.” Wages will be raised and substantial health benefits guaranteed, regardless of the bottom line. The massive expansion of stimulus funding will create “37 million nature-positive jobs” and a Green economy will be resolutely promoted to fight climate change, generating employment and profits along the way. There exists, plainly, not a shred of empirical evidence to justify Schwab’s prognostics.

It is hard to say whether Schwab’s arguments—or some of them—are cleverly devious or childishly naïve. For example, he urges us not to fear the dystopian fatality of entrenched tech-and-government surveillance following recovery, since it is “for those who govern and each of us personally to control and harness the benefits of technology without sacrificing our individual and collective values and freedom.” This analysis seems a colossal oxymoron. Surveillance will be pervasive but our values and freedoms can somehow be preserved.

When he argues that governments must do “whatever it takes and whatever it costs” to ensure our wellbeing, otherwise people afraid of the virus will not shop, travel or dine out, thus hindering economic recovery, he appears oblivious to the fact that it was intense government panic-mongering that led precisely to the adverse consequences he wishes to avoid—probably the greatest political error of a generation. Is Schwab deceiving us or deceiving himself? Such instances of double-think can be multiplied throughout his text.

As to be expected, Schwab has bought wholesale into many contemporary shibboleths and intellectual sedatives. He enthusiastically accepts the dodgy hypothesis of "global warming" and is indifferent to both the uselessness and devastation wrought by the costly scam of Green energy as a replacement for reliable fossil fuels. “The climate risk is unfolding more slowly than the pandemic did, but it will have even more severe consequences”—a premise that has been robustly challenged by some of the most reputable and knowledgeable researchers in the field.

Money for nothing, and stuff for free.

In The Fourth Industrial Revolution, Schwab supports the accelerating “innovation in genetics, with synthetic biology now on the horizon,” involving “biotechnology techniques using RNA and DNA platforms… to develop vaccines faster than ever”—except that these substances are not vaccines but computer-like “operating systems” that alter “the unique mRNA sequence that codes for a protein,” and rely on pathogenic priming that can make people sicker than the disease would have.

In Stakeholder Capitalism, we learn that Schwab is all for “contact tracing” which “has an unequalled capacity and a quasi-essential place in the armoury needed to combat COVID-19”—the “quasi” is a bet hedger, just in case things go sideways. He is an avid supporter of Mark Zuckerberg, whose Facebook is a censuring giant, and regurgitates Zuckerberg’s deceptive and self-serving pitch that greater regulation is needed to hold companies accountable.

Schwab regards COVID-panic-stricken, shut-down countries like New Zealand as “trailblazers.” He is a Net-Zero Telamon for the United Nations Sustainable Development Goals (SDGs) and Agenda 2030 with their animus against individual property rights. He has proposed a scheme of “non-financial metrics” to chart a company’s progress toward virtue, and affirms that “such virtuous instincts can become a feature of our economic systems,” assuring us they will continue “creating prosperity for all their citizens and businesses.” John O’Sullivan correctly notes that “the hairshirt economic policy of Net Zero [is] a dystopian delusion.”

[Part two tomorrow]