I have been attending the World Economic Forum’s annual conference in Davos, Switzerland — where the so-called global elite convenes to discuss the world’s problems — since 1995. Never have I come away more dispirited than I have this year.
The world is plagued by almost intractable problems. Inequality is surging, especially in the advanced economies. The digital revolution, despite its potential, also carries serious risks for privacy, security, jobs and democracy — challenges that are compounded by the rising monopoly power of a few US and Chinese data giants, including Facebook and Google. Climate change amounts to an existential threat to the entire global economy as we know it.
Perhaps more disheartening than such problems, however, are the responses. Chief executive officers from around the world begin most of their speeches at Davos by affirming the importance of values. They said their activities were aimed not just at maximizing profits for shareholders, but also at creating a better future for their workers, the communities in which they work and the world in general. They might even pay lip service to the risks posed by climate change and inequality.
However, by the end of their speeches, any remaining illusion about the values motivating Davos CEOs was shattered. The risk that these CEOs seemed most concerned about is the populist backlash against the kind of globalization that they have shaped — and from which they have benefited immensely.
Not surprisingly, these economic elites barely grasp the extent to which this system has failed large swaths of the population in Europe and the US, leaving most households’ real incomes stagnant and causing labor’s share of income to decline substantially.
In the US, life expectancy has declined for a second year in a row; among those with only a high school education, the decline has been under way for much longer.
Not one of the US CEOs whose speech I heard (or heard about) mentioned the bigotry, misogyny or racism of US President Donald Trump, who was present at the event. Not one mentioned the relentless stream of ignorant statements, outright lies and impetuous actions that have eroded the standing of the US president — and thus of the US — in the world. None mentioned the abandonment of systems for ascertaining truth, and of truth itself.
Indeed, none of the US corporate titans mentioned the administration’s reductions in funding for science, so important for strengthening the US economy’s comparative advantage and supporting gains in Americans’ standard of living.
None mentioned the Trump administration’s rejection of international institutions, either, or the attacks on the domestic media and judiciary — which amounts to an assault on the system of checks and balances that underpins US democracy.
No, the CEOs at Davos were licking their lips at the tax legislation that Trump and congressional Republicans recently pushed through, which will deliver hundreds of billions of US dollars to large corporations and the wealthy people who own and run them — people like Trump himself.
They are unperturbed by the fact that the same legislation will, when it is fully implemented, lead to an increase in taxes for the majority of the middle class — a group whose fortunes have been in decline for the past 30 years or so.
Even in their narrowly materialistic world, where growth matters above all else, the Trump tax legislation should not be celebrated. After all, it lowers taxes on real-estate speculation — an activity that has produced sustainable prosperity nowhere, but has contributed to rising inequality everywhere.
The legislation also imposes a tax on universities like Harvard and Princeton — sources of numerous important ideas and innovations — and will lead to lower local-level public expenditure in parts of the country that have thrived, precisely because they have made public investments in education and infrastructure. The Trump administration is clearly willing to ignore the obvious fact that, in the 21st century, success actually demands more investment in education.
For the CEOs of Davos, it seems that tax cuts for the rich and their corporations, along with deregulation, is the answer to every nation’s problems. They claim that trickle-down economics will ensure that, ultimately, the entire population benefits economically and that the CEO’s good hearts are apparently all that is needed to ensure that the environment is protected, even without relevant regulations.
Yet the lessons of history are clear. Trickle-down economics does not work and one of the key reasons why our environment is in such a precarious condition is that corporations have not, on their own, lived up to their social responsibilities.
Without effective regulations and a real price to pay for polluting, there is no reason whatsoever to believe that they will behave differently than they have.
The Davos CEOs were euphoric about the return to growth, about their soaring profits and compensation. Economists reminded them that this growth is not sustainable and has never been inclusive — but such arguments have little impact in a world where materialism is king.
So forget the platitudes about values that CEOs recite in the opening paragraphs of their speeches. They may lack the candor of Michael Douglas’s character in the 1987 movie Wall Street, but the message has not changed: “Greed is good.”
What depresses me is that, though the message is obviously false, so many in power believe it to be true.
Joseph Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University.
Copyright: Project Syndicate
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe. Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains. Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.