Umsebenzi Online, Volume 19, No. 1, 29 January 2020
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Volume 19, No. 1, 29 January 2020 |
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The triple-headed spectre haunting Davos |
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Jeremy Cronin
The Word Economic Forum's (WEF's) annual Davos jamboree has just ended. The gathering brings together global corporate CEOs, the mega-rich, along with government representatives, supplicants, well-heeled Third World sycophants, hangers-on and an assortment of neo-liberal soothsayers. This year's mood was more sombre than usual. A triple-headed spectre was haunting Davos.
Among many of the overlords of the universe (but not all, not Trump) there is now a belated awareness that trouble is looming. The deepening global social, environmental and economic crises out here in the real world, beyond the Davos bubble, are a threat to profits and to the sustainability of capitalism itself.
Inequality, founder and executive chair of WEF, Klaus Schwab worries "has profound and far-reaching consequences", it is eroding the "social contract" - by which he means the social hegemony of neo-liberalism. Indeed, the facts are grotesque. As the global elite gathered in Davos, Oxfam released its annual report on global inequality. The world's 2 153 billionaires now have more wealth than 4.6 billion people - 60 per cent of the world's population. The 22 richest men in the world have more wealth than all the women in Africa. Women and girls put in 12.5 billion hours of unpaid care-work each and every day - a contribution to the global economy of at least $10.8 trillion a year, more than three times the size of the global tech economy.
Meanwhile the ravages of profit-driven capitalism on the environment are becoming ever more drastic and apparent. The bush fires raging in Australia are among the most dramatic and most noted (they are occurring in a rich country, unlike the crippling drought in Zimbabwe, or floods in Indonesia).
Larry Fink, CEO of BlackRock, at $7 trillion the world's largest asset manager, has begun to notice with alarm that climate-change is eroding not just coral reefs, but the very foundations of the capitalist financial system. "What will happen", he wonders, "to the 30-year mortgage - a key building block of finance - if lenders can't estimate the impact of climate risk over such a long timeline, and if there is no viable market for flood or fire insurance in impacted areas?"
The global capitalist economy in the narrow sense, too, is ailing. While the speculative, casino world of the stock-market is pumping like an athlete on steroids, the IMF has just reduced once more its global growth forecasts. Secular stagnation is entrenched in most of the developed world, just as in South Africa.
These triple global crises of inequality, environmental destruction and economic stagnation are intertwined as even the IMF now recognises. In the words of IMF managing director, Kristalina Georgieva, there are dangers of an impending "financial disaster" akin to the Great Depression of the 1930s, due to "rising inequality and increased uncertainty caused by the climate emergency and trade wars".
So, what has last week's Davos WEF gathering prescribed in the face of these challenges?
The buzz-word is "stakeholder capitalism".
Schwab tells us that: "Generally speaking, we have three models to choose from. The first is ‘shareholder capitalism', embraced by most Western corporations, which holds that a corporation's primary goal should be to maximise profits. The second model is ‘state capitalism', which entrusts the government with setting the direction of the economy, and has risen to prominence in many emerging markets, not least China."
"But", adds Schwab, "compared to these two options, the third has the most to recommend it. ‘Stakeholder capitalism'…positions private corporations as trustees of society and is clearly the best response to today's social and environmental challenges."
(Note, in passing, that, as you might expect, the only options we are given are supposed variants within capitalism - nothing beyond it.)
But what is "stakeholder capitalism"? Schwab's Davos Manifesto calls on corporations "to treat customers with dignity and respect, to respect human rights throughout their supply chain, to act as a steward to the environment for future generations and, most significantly, to measure performance, not only on the return to shareholders but also how it achieves its environmental, social and good governance objectives."
That all sounds hunky-dory - but can the leopard really change its spots? Can unelected capitalist corporations at the service of the 0.1 percenters, the global rentier class, really become dependable "trustees of society", "stewards of the environment"? Our experience of state capture here in South Africa suggests otherwise. Leaving aside the Guptas, even global big-hitters, the supposed over-seers of universal "good governance" and "due diligence", the likes of KPMG, Deloitte and McKinsey, have been active colluders.
As Nick Buxton writes of the "stakeholder capitalism" version propounded in the Davos Manifesto: "The catch is that nowhere…is there a mention of enforcement mechanisms, legislation or regulation to ensure companies abide by their commitments." ("Has the era of the ethical corporation arrived?", www.opendemocracy.net). And that's because Schwab has conveniently consigned any leading strategic role for the state, as in China, to "state capitalism", which is posited as an entirely different version of capitalism antithetical to his preferred "stakeholder capitalism". The Davos version of "stakeholder capitalism" is an entirely voluntary process left in the hands of corporations. It does not challenge the over-riding profit-making purpose of corporations.
We can be sure that the Davos championing of "stakeholder capitalism" will now spawn a local fan-club here in South Africa. But is there nothing to recommend the idea of "stakeholder capitalism"? How should the left position itself on this terrain? Are there entry-points for a more radical intervention? In the first place, we should note that, in its Davos version, it owes some of its appeal to the fact that at least it is diverging from the short-termist, climate-denialism, imperialist chauvinism of Trump. (Although in its Davos version it represents a different imperialist aspiration - not Trump's America first imperialism, but the imperialism of cosmopolitan corporate CEOs, trustees of the universe.)
The socialist left in South Africa and internationally is not about to abolish capitalism as much as we might legitimately wish to do so. Radical environmental collapse will destroy capitalism, but it will also destroy the prospects for any kind of human civilisation, socialist or otherwise. Without any illusions or naiveté, as the left we should note that some of the more enlightened factions of capital recognise that the current trajectory of global capitalism is unsustainable. We should welcome the fact that the likes of BlackRock, entirely for reasons of ensuring medium- to longer-term sustainable profitability, are advocating a green transition.
But that transition will not happen, still less will it be a socially just transition, unless we effectively use popular state power and social mobilisation to ensure that the future is not left in the hands of Klaus Schwab's Davos Man.
* Cronin is SACP Central Committee and Politburo member
Umsebenzi Online is an online voice of the South African working class
