The Elite Meet in Davos As Trump, Who They Helped Create, Is Inaugurated

Two important events take place on tomorrow, the inauguration of Donald Trump and the start of this year’s Davos meeting of world ‘leaders’ organised by the World Economic Forum (WEF). They may seem like unrelated events but they are very closely related. ?

Donald Trump, a convicted felon, will soon be sat in the oval office rather than behind bars. That is a direct consequence of the actions, and inactions, of many of those at Davos who like to think of themselves as leaders.

Through their use and abuse of power, in the way they run their organisations, in the investment decisions they make, and the lobbying they undertake, many are either directly or indirectly responsible for creating the conditions that gave rise to the grotesque spectacle. They are also responsible for the equally hideous events we are seeing in other parts of the world.

The blame for what I call the “Global Governance Crisis,” must be directed squarely at the global elites, such as those arriving at Davos.

Among those who go to Davos are the members of other organisations that have also failed to achieve their stated missions as spectacularly as the World Economic Forum has. They include:

The Business Roundtable (BRT). “An association of more than 200 chief executive officers (CEOs) of America’s leading companies.” Established over 50 years ago the organisation claims, “members develop and advocate directly for policies to promote a thriving U.S. economy and expanded opportunity for all Americans.” ?

The International Corporate Governance Network (ICGN) was “established in 1995 by the world’s most influential investors,” “to promote effective standards of corporate governance and investor stewardship to advance efficient markets and sustainable economies worldwide.” ?

The Thinking Ahead Institute (TAI) is “a not-for-profit research and innovation network motivated to influence the investment industry for the good of savers worldwide and to mobilise capital for a sustainable future.” It’s stated mission is, “to achieve systemic change across the investment industry, so that the provision of new capital and the stewardship of existing capital adds long-term value to the end saver, wider society and the planet.”

The WEF, and these three other entities, are representative of other such organisations. You may well be able to name others in the comments?

They each boast about the influence they have, and the influence their members have. Without doubt, their members certainly do have influence. These organisations clearly do not is judged against their stated missions:

In the case of the BRT, the economy certainly isn’t thriving and the opportunities for many Americans are far less than they were. The American Dream is dead.

In the case of the ICGN, markets are not efficient. The global economy is not stable. Nor are the economies of a growing number of countries. They are more unstable than they have been in a long time.

In the case of the TAI, the industry is not operating for the good of savers. And capital is not being mobilized for a sustainable future.

You are probably familiar with how influential the Davos meeting participants are, but what about the BRT? It boasts, “Business Roundtable CEOs lead U.S.-based companies that support one in four American jobs and almost a quarter of U.S. GDP.”

The ICGN says it was “established in 1995 by the world’s most influential investors” Today it is “led by investors responsible for assets under management of around US$77 trillion.” That represents 77% of the estimated US$100 trillion assets under management in the whole world in 2023. That is all the assets managed by all the world’s pension funds, sovereign wealth funds, mutual funds, hedge funds, and private equity firms combined. ?

The TAI says, “Our membership comprises 52 asset owners and asset managers, with combined responsibility for approximately US$16 trillion.” “The Asset Owner 100 is a Thinking Ahead Institute study which gathers data on the total assets of the top 100 asset owners around the world,” which it describes as “the most influential capital on the planet.” This 100 were “responsible for US$ 26.3 trillion as of the end of 2023.” The TAI notes, “These organisations are enormously important to the futures of people and planet,” adding “from great power flows great opportunity.”

Such an unfortunate concentration of control, over such massive amounts of wealth, certainly gives the AO100 obscene amounts of power. And, yes, it also gives them a great opportunity as the TAI states. They had the opportunity to meet the Millennium Development Goals, but failed to take it. They have the opportunity to meet the Sustainable Development Goals, but are failing to take it.

Critics of my last comment will say that addressing those challenges is not the responsibility of the asset owners and managers. They are wrong for a host of reasons that I cannot go into in detail in this article, but will in future article. For now. I can state that by not addressing them they expose the world, and those whose interests they are supposed to serve, to massively increased costs and tremendous risks. And the risks they are storing up for the future will make the costs being incurred today seem almost insignificant. They threaten our ability to survival.

The inaction cannot be justified on moral or ethical grounds. It is even inexplicable in financial terms. The investment returns that could be realised by addressing the problems represent an enormous opportunity that is being missed. The estimated value of meeting the Sustainable Development Goals is US$ 12 trillion per year according to the Business and Sustainable Development Commission. That represents a great return on the estimated total cost, US$3.5 trillion a year, according to the United Nations. And their calculation should also factor in the financial, and non-financial, costs of not meeting the goals. ?????????????

When talking in trillions the figures can be almost impossible to comprehend. To give them some perspective the value of all the good and services produced in the whole world in 2023 was an estimated U$104 trillion according to the International Monetary Fund (IMF). For the US it was US$26.9 trillion, for the whole of the EU US$17 trillion, and for China US$17.7 trillion.

Given the failure of the WEF, BRT, ICGN and TAI to achieve their objectives, and the WEF and the BRT in particular given they have been around for over half-a-century, we must ask ourselves what their real purpose is? Perhaps they are very effective platforms for virtues signalling in the eyes of their members? What other conclusions could be drawn?

Remarks like that need to be substantiated. So, let me share the words of Raghuram Rajan a former Chief Economist and Head of Research at the International Monetary Fund, a former Governor of India’s central bank, now a professor at the University of Chicago, and author of books including “The Third Pillar: How Markets and the State Leave the Community Behind” (2019).

In the opening comments of the book he states.....

“In my adult life, I have never been more concerned about the direction our leaders are taking us than I am today.”

He also recalls that in a precious book he “worried about the consequences of rising inequality, arguing that easy housing credit before the Global Financial Crisis was, in part, a way for politicians to deflect people’s attention from their stagnant pay checks.” He also stated he "was concerned that instead of drawing the right lesson from the crisis [the global banking crisis of 2008]—that we need to fix the deep fault lines in developed societies and the global order—we would search for scapegoats.”

He added “The first victims of a political search for scapegoats are those who are visible, easily demonized, but powerless to defend themselves. The illegal immigrant or the foreign worker do not vote, but they are essential to the economy—the former because they often do jobs no one else will touch in normal times, and the latter because they are the source of the cheap imports that have raised the standard of living for all, but especially those with low incomes. There has to be a better way?.?.?.”

In contrast he noted that, “for the first time in history, we have it in our power to eradicate hunger and starvation everywhere.” And he observes that “In an era of seeming plenty, a group that once epitomized the American Dream seems to have lost hope.”

In the Third Pillar, published six years ago, he says, “the primary source of worry seems to be that moderately educated workers are rapidly losing, or are at risk of losing, good “middle-class” employment, and this has grievous effects on them, their families, and the communities they live in.” And he adds.....

“As public anxiety turns to anger, radical politicians see more value in attacking imports and immigrants. They propose to protect manufacturing jobs by overturning the liberal rules-based post war economic order."

Back then he warned, “there is both promise and peril in our future. The promise comes from new technologies that can help us solve our most worrisome problems like poverty and climate change. Fulfilling it requires keeping borders open so that these innovations can be taken to the most underdeveloped parts of the world, even while attracting people from foreign lands to support aging rich country populations."

"The peril lies not just in influential communities not being able to adapt and instead impeding progress but also in the kind of society that might emerge if our values and institutions do not change as technology disproportionately empowers and enriches some.”

When he talks of The Third Pillar he means ‘Civil Society’. The other two are the ‘Markets’ and the ‘State.’ He warns that “when any of the three pillars weakens or strengthens significantly, typically as a result of rapid technological progress or terrible economic adversity like a depression, the balance is upset and society has to find a new equilibrium.”

“Markets and the State have not only separated themselves from the community in recent times but have also steadily encroached on activities that strengthened bonds within the traditional community.” He argues.

The reality is far worse than that comment suggests.......

The state has been captured and corrupted by the market in several countries, and in America in particular.

The arguments, and the evidence, for that was well made in “The Politics Industry” by Katherine M. Gehl and Michael E. Porter (2020).

Readers may know Porter as one of Harvard Business Schools most famous professors, a prolific author of books on competition, and the founder of a management consulting form. He describes himself as a Republican in book, which he says is probably his most important book, which they declare to be non-partisan.

Rajan said, "when the three pillars of society are appropriately balanced, society has the best chance of providing for the well-being of its people,” but “the pillars are seriously unbalanced today.” And he warned, “when the proximate community is dysfunctional, alienated individuals need some other way to channel their need to belong. Populist nationalism offers one such appealing vision of a larger purposeful imagined community.”

The populist, “blames the corrupt elite for the condition of the people.” “Populist nationalists identify minorities and immigrants—the favorites of the elite establishment—as usurpers, and blame foreign countries for keeping the nation down. These fabricated adversaries are necessary to the populist nationalist agenda, for there is often little else to tie the majority group together—it is not really based on any true sense of community for the differences between various subgroups in the majority are usually substantial.”

He adds,

“Populist nationalism will undermine the liberal market democratic system that has brought developed countries the prosperity they enjoy.? Within countries, it will anoint some as full citizens and true inheritors of the nation’s patrimony while the rest are relegated to an unequal, second-class status. It risks closing global markets down just when these countries are aging and need both international demand for their products and young skilled immigrants to fill out their declining workforces. It is dangerous because it offers blame and no real solutions, it needs a constant stream of villains to keep its base energized, and it moves the world closer to conflict rather than cooperation on global problems.”

Rajan concludes,

“While the populist nationalists raise important questions, the world can ill afford their short-sighted solutions.” “To strengthen the chances that society will stay liberal and democratic, we need profound changes that rebalance the three pillars in the face of technological change. We need more localism to empower the community while drawing on the state and markets to make society more inclusive.”

This article quotes Rajan at length since he summarises so many issues well in very few words. Importantly, he describes the direct link between the global elites, such as those attending Davos, and the conditions that gave rise to the populist politics of Trump and others like him.

Readers should not consider Rajan a lone voice because I have focused on what he says. In a previous article, The Age of Angst, Discontent, Totalitarianism, and the Twilight of Democracy & Democratic Capitalism, I referred to the warnings in books from several leading thinkers.

The conditions Rajan describes not only created the fertile ground for the far right forces, including Trump, to emerge. They also gave rise to ?problems that are on the 2025 Davos agenda, as detailed in the 2025 Global Risk Report published by the WEF. I stress again that many of those attending, through their actions and inactions, directly and indirectly, created many of the risks they pretend they are in Davos to address.

It is no wonder that Davos and the WEF get so much criticism, that many are question whether it can survive long following Klaus Schwab, the Founder, stepping down. Nor is it any wonder people are questioning its relevance.

The Financial Times Columnist Sam Jones wrote….

“The companies, billionaires and legions of consultants that fill Davos each year may want to take a pause in thinking how they can change the world through their management of it, and give a little more time to thinking about how, in the coming years, it may seek to change them.”

That is good advice to all those attending Davos. I hope they do so whilst reflecting on their role in putting Donald Trump back in power. The members of the BRT, ICGN, the TAI and other similar organisations should do the same. They need to recognise their responsibility and act with urgency to address the catastrophe they created, that is currently unfolding with their very real or tacit support and blessing. Regardless of their rhetoric, ‘actions speak louder than words.’

“The ensuing risks are becoming more complex and urgent, and accentuating a paradigm shift in the world order characterized by greater instability, polarizing narratives, eroding trust and insecurity. Moreover, this is occurring against a background where today’s governance frameworks seem ill-equipped for addressing both known and emergent global risks or countering the fragility that those risks generate.”

They are not my words. They are the words of the Managing Director of the WEF in the Preface to the 2025 Global Risk Report, just published.

The TAI notes.....

“The investment landscape is becoming increasingly complex due to rising uncertainty, expanding regulations, and the involvement of a growing number of stakeholders, each with unique interests and expectations. 73% of the Asset Owner Peer Study 2024 participants said that managing complexity is their top concern.”

They are also correct. But they has the power to create such conditions, so they can use their power to fix the problems they caused.

The TAI calls for an entirely new approach to risk management using systems thinking, “an approach to understanding complex, interconnected systems by recognising the relationships and interactions among their parts rather than focusing on individual components in isolation. It emphasizes a holistic perspective, acknowledging that changes in one area can have ripple effects throughout the entire system. Systems thinking allows them to understand complex systems, such as organisations, at a nuanced level and recognise patterns, comparing different perspectives, and prepare for what might happen in the future,” they argue.

Since 2020 I have been arguing a major cause of today’s problems is the “systems thinking capabilities gap”. Put simply, even the well intentioned and enlightened leaders and organisations do not have the capabilities they need to address today’s challenges if they have only had a classic management education.

Nobody understands this better than Dr Michael C Jackson, the Founder and Former Dean of Hull University Business School in the UK, an international authority on Systems Thinking and Practice, and author of Critical Systems Thinking and the Management of Complexity.

In his book Jackson summarises the problem as follows….

“What help can decision‐makers expect when tackling the “messes” and “wicked problems” that proliferate in this age of complexity? They are usually brought up on classical management theory that emphasizes the need to forecast, plan, organize, lead, and control. This approach relies on there being a predictable future environment in which it is possible to set goals that remain relevant into the foreseeable future; on enough stability to ensure that tasks arranged in a fixed hierarchy continue to deliver efficiency and effectiveness; on a passive and unified workforce; and on a capacity to take control action on the basis of clear measures of success. These assumptions do not hold in the modern world, and classical management theory provides the wrong prescriptions. This is widely recognized and has led to numerous alternative solutions being offered to business managers and other leaders, for example, lean, six sigma, business analytics, value chain analysis, total quality management, learning organizations, process reengineering, knowledge management, balanced scorecard, outsourcing, and enterprise architecture. Occasionally, they hit the mark or at least shake things up. It is sometimes better to do anything rather than nothing. Usually, however, they fail to bring the promised benefits and can even make things worse. They are simple, “quick‐fix” solutions that flounder in the face of interconnectedness, volatility, and uncertainty. They pander to the notion that there is one best solution in all circumstances and seek to reduce complex problems to the particular issues they can deal with. They concentrate on parts of the problem situation rather than on the whole, missing the crucial interactions between the parts. They fail to recognize that optimizing the performance of one part may have consequences elsewhere that are damaging for the whole. They often fail to consider an organization’s interactions with its rapidly changing environment. Finally, they don’t acknowledge the importance of multiple viewpoints and internal politics.”

Working with Mike the Enlightened Enterprise Academy has develop executive programmes to help the Enlightened Leaders overcome the critical systems thinking capabilities gap, to reduce the chances they will find themselves on the wrong side of history, and who choose not to be wilfully blind to the consequences of their actions. From the 25th January or before, the Systems Thinking & Practice Magazine will be available online.

Individuals, businesses and organisations that do not want to find themselves on the wrong side of history, and who want to be pioneers of? solutions to today’s challenges are invited to subscribe to the Enlightened Enterprise Magazine online

You may also like to engage in the events related to my book project, “The Better Way”

And you may like to subscribe to, and get involved in, “The Governance Inquiry” also launching on or before the 25th January, to address the global governance crisis.

Another offering from the Enlightened Enterprise Academy is the Salon. It aims to be a catalyst for the New Enlightenment, by bringing together the world’s leading thinkers from all relevant disciplines.

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