World Economic Forum Powerless at Davos

The leaders meeting in Davos this week can't control world events the way they used to, writes Handelsblatt's deputy editor in chief.
From left to right: Robin Niblett, director of Chatham House Enterprises Ltd., Mark Rutte, Dutch prime minister, Manuel Valls, France's prime minister, Alexis Tsipras, Greece's prime minister, Emma Marcegaglia, chairman of Eni SpA, and Wolfgang Schaeuble, Germany's finance minister.

There they are, “summiting” again: More than 2,500 leading politicians, managers and scientists are meeting at the World Economic Forum in Davos to discuss the state of a world which, at least in earlier times, they could claim to shape on their own. But is this carnival of lofty egos and VIPs still really the grand event it likes to make itself out to be?

These summits have become inflationary, in contradiction to their classic conception dating back to the 1970s, when elites could still be sure of being left to their own devices. A summit was once an assertion of hierarchy and differentiation. But this view of the world is obsolete in an era when five entirely new power factors influence, even dominate economic and political events around the globe.

First of all, there is the financial industry. At the latest since the severe crisis in 2008, it is no longer only investor Warren Buffett who knows that derivatives, for example, are genuine “weapons of mass destruction.” They can bring down individuals, and even entire countries.

Recent decades saw the growth of an industry that often doesn't itself know exactly what sort of complex and therefore dangerous products it is selling. The protagonists are often at the mercy of forces beyond their control when, as minuscule traders, they manage to send billions up in smoke. What matters is technology. The algorithms that take care of daily business, not only on the exchanges, have acquired a power whose control is still an outstanding issue.

A summit was once an assertion of hierarchy and differentiation. But this view of the world is obsolete.

Secondly, hackers have developed a similarly virtual but destructive impact, from mass attacks on our savings books to attacks on companies or even power plants. Cyber-criminality causes damage running in the billions. And it's not only the hackers that are an enemy that can scarcely be located or combated.

It is also difficult to keep the religiously embellished guerrilla war of a group like IS at bay. Minimal means are designed to impose maximum damage. With their everyday bloodbaths and globalized violence, al Qaeda, IS or Boko Haram – power factor three – simultaneously thrust a new problem in the faces of all those still clinging to the notion that they are the only true movers and shakers in the world. The international influx of refugees – power factor four – have become a challenge that Davos also doesn't know how to meet.

It will no longer be possible to simply put the brakes on the migrations that are bearing down on Europe for the foreseeable future, one whose contours are still blurred. The political discourse in both Berlin and Brussels shows how hopelessly overwhelmed the protagonists already are today at their traditional “summits.”

The political establishment, but also the media and economic leaders are being tested and questioned – not only regarding the refugee issue – by a fifth, relatively recent power factor: The social media are part of the fourth industrial revolution that still tends to be underestimated by the old elites.

Networking doesn't just mean that in the future, a refrigerator will be able to communicate with a delivery service. It also means: The populace organizes itself, clusters into swarms, provokes firestorms, and becomes a watchdog.

 

WTB WEF Davos World Economic Forum 2015

 

The individual is nothing; the orchestra of the many is everything. Its members don't need a summit to exchange ideas. The largest country in the world is no longer of this world: Facebook already connects and controls 1.4 billion people. So it is somehow comforting that the American company and its number-two Sheryl Sandberg are physically represented at Davos with a large pavilion.

This is perhaps even an opportunity for the forum that is no longer a summit. It must become accessible. Open. It has to make itself small in order to remain big as a transfer site for ideas.

It is true that the top 1 percent of humanity owns more than all the rest below. Oxfam released this disturbing figure right at the start of Davos, which is thus supposed to be criticized, because where else is the concentration of millionaires so dense at the moment?

But money does not inherently mean more power. The “powerful” in the economic and political spheres need to discuss their limitations. At the moment, it is rather the "others" who are limitless.

 

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