Terry Bell: Davos and the spectre of populism | Fin24
 
  • New Notes

    Long queues have formed in Harare after Zimbabwe released new bank notes and coins.

  • Open Book

    Former President Jacob Zuma says the public protector can access his tax records.

  • Electricity

    Sowetans should pay rate of R150/month to foster a payment culture, says an ANC councillor.

Loading...

Terry Bell: Davos and the spectre of populism

Jan 25 2019 06:00
Terry Bell

The World Economic Forum (WEF) annual meeting in the Swiss resort of Davos got underway again this week. And a fact that needs to be repeated is that this gathering, for all its public relations pretensions, has no democratic credentials whatsoever: it is a private club whose members are 1 000 of the world's richest and most powerful chief executives.

As such, Davos is a lavishly prepared master's table at which heads of state and government ministers are bribed, bullied and flattered to pursue policies that favour big business. At the same time there is considerable debate about how best to manage and sustain a global economic system that has made the club's members and their cohorts wealthier — and now possibly more worried — than ever before.

Decades of general optimism was undimmed even by recognition of the 2008 economic crunch. The Davos theme for 2009, for example, was "Shaping the post-crisis world", implying that the crisis was over. It wasn't and still isn't, but hope seemed to spring eternal. 

Even as late as 2013, WEF founder, Swiss billionaire, Klaus Schwab, was expressing "cautious optimism". He noted: "In some quarters, the world appears to be on the road to recovery despite the structural challenges of widening income disparities and fiscal deficits."

There was concern then about what the International Monetary Fund (IMF) head, Christine Lagarde, called "the middle-class crisis". Middle class, in these terms, referred mainly to better paid workers in more developed economies who perhaps owned a mortgaged house, a car, could afford an annual holiday and perhaps had some savings.

These were the people whose wages were stagnating and whose jobs were disappearing as corporations, their profits squeezed, sought out ever cheaper labour in a globalised world. It was this that largely gave rise to the optimistic boast — still current in Davos this week — that more people have been "lifted out of poverty", earning more than $1.90 (R27) a day than ever before.

But this rosy claim was demolished by a report from human rights group, Oxfam, released to coincide the Davos 2019. Entitled "Public Good or Private Wealth", it points out that the 26 richest billionaires in the world own as many assets as the 3.8 billion people who make up the poorest half of the planet's population.

While there may be some dispute about the precise statistics, the overall validity of the findings cannot be disputed. The super-rich have certainly become richer over the past year — billionaires, according to Oxfam, by $2.5bn (R35bn) a day — while the poorest half of humanity has become poorer.

This apparently inexorable trend is one that the global corporate chiefs and their institutional backers such as the IMF know can lead to social and political instability that could challenge their positions. It is for this reason that the spectre of populism this year haunts the meeting halls at Davos. This is the emergence of nationalistic, protectionist movements epitomised by Donald Trump in the US and developments in Italy, France, Hungary and Austria.

This does pose a threat to global corporations, but not to the system based on competition and the exploitation of labour. Nationally based businesses want to "lock out" the competition from global corporations. In this they hope to rally local workers — and voters — to their cause by claiming that "foreigners" are stealing jobs. 

Such populist movements often have the support of many working people and trade unions. And a nasty offshoot of this thinking and support is xenophobia.

However, instability is bad for business, across the board. So there are now calls, both from national capital and the Davos coterie, for "more redistributive policies", something trade unions around the world have long demanded.

Like Oxfam, the labour movement also calls for "universal free health care, education and other public services" to be paid for by fairer tax regimes that would stop corporations and the super-rich from using means such as tax havens to avoid paying tax. But this seems rather like doing nothing to stop a habitual bully and thief other than asking him to please give up such activities.

At least the SA Federation of Trade Unions (Saftu), in welcoming the Oxfam report, and endorsing the calls for redistribution, went one step further. In a statement this week, the federation noted that such policies "will never be fully implemented without a fundamental transformation of the economy".

Saftu claims this would require "the nationalisation of the banks, mines and key industrial monopolies under democratic workers and community control". But nationalisation implies state control which — given the experience of the Soviet Union, China etc — does not mean democratic worker/community control.

The world — South Africa included — is clearly in a mess. But perhaps a first step should be to decide how best to extend democracy to the managerial and regulatory authority that is Parliament.

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...