Why both the left and right are wrong about Davos

DAVOS, SWITZERLAND — Leaders from business, government, NGOs and academia are assembling in this Swiss ski village again for the annual meeting of the World Economic Forum. The purpose of the organization is “to improve the state of the world.” That is a tough assignment, given the growing global mess and increasing bifurcation of political perspectives to the far right and far left.

A curious phenomenon of this new political situation is that the left and right agree on one thing: The “Davos Class,” as they both call it, is hardly the solution – it’s the problem.

Leftists such as Naomi Klein describe the event as a gabfest for the rich and powerful. To them, the Davos Class’s talk about inclusive growth and shared prosperity is bogus. Davos is strictly for show, and in the end nothing changes. Corporate titans leave the Swiss resort and go back to their day jobs of pitiless and amoral global capitalism.

Similarly, on the far right, emboldened by president-elect Donald Trump’s success, Breitbart News Network belittles the so-called Davos Class for misguided and cowardly liberalism. It dismisses the notion that we should all work together for a more prosperous and caring society.

As a long-time Davos attendee, I can say that the capitalism advocated by most Davos attendees and the capitalism promoted by Mr. Trump and his acolytes have little in common. Mr. Trump’s version is ugly. He and his wealthy cronies believe in a zero-sum game, a winner-take-all economy, as long as the United States is the winner. His weapon of choice is protectionism.

To be sure, many banking executives think Mr. Trump’s low-regulation and low-tax philosophy will provide opportunities, at least for the short term. But to me – and, I suspect, to most others attending Davos – Trumpism is a clear threat to global prosperity. It chokes the possibility of a rising and more equitable standard of living for the world’s citizens. We need, as this year’s Davos theme says, “Responsive and Responsible Leadership.”

Mr. Trump’s ascendency will be the backdrop for most Davos discussions. He and some of his supporters have changed the discourse about a civil and humane society. They promote xenophobia and misogyny. They hope to defund public education, privatize health care and undermine science and data as a basis for truth. Some are climate-change deniers. Breitbart News just claimed that 2016’s record-high global temperatures were not caused by climate change but by El Nino. All these themes are anathema to a typical Davos attendee.

The forum will focus on how countries should respond better to the insecurity and inequality that comes with technological change and globalization. This insecurity is causing tremendous upheaval, such as Mr. Trump’s victory, the Brexit vote and extreme populism in many countries.

The result is a prosperity paradox, the United States being the worst example. We see wealth creation but declining prosperity, the gutting of the middle class and the end of the American Dream.

Technology, and the Internet in particular, shares the blame for some of this. Yes, the digital revolution has brought many wonders. But it has led to a fragmentation of public discourse in which we follow our own point of view in digital echo chambers. In many countries, privacy is being undermined by hackers of corporate data and rampant government surveillance. Structural unemployment is emerging as brilliant machines begin to replace everything from truck drivers to radiologists.

The benefits of the digital age have been captured asymmetrically. And, paradoxically, there are a billion people who have a supercomputer in their pocket but who don’t have a bank account and are excluded from the normal economy.

This is a formula for social unrest or worse. We are in uncharted waters. I’ve attended a majority of the forum’s annual meetings and I don’t remember ever being more concerned about the state of the world.

Few in Davos see the solution as turning back the clock, closing borders to people and trade, promoting nationalism, ripping apart social safety nets, abandoning refugees, undermining international institutions and trying to build outmoded industrial-age industries.

Clearly the growth model and measurement tools that have guided governments for decades are fundamentally flawed. The forum argues that we should look at sustained, broad-based progress in living standards. Rather than obsessing over GDP growth, countries should use metrics that go beyond income. Our metrics should include economic opportunity, security and quality of life. This would be an amazing achievement.

Both the left and right are wrong about Davos. For 75 years, we have relied on nation states and their institutions such as the United Nations, the World Bank, the International Monetary Fund, the World Trade Organization, the Group of 20 and the Group of Eight to solve global problems. Increasingly, we can also make progress though non-state networks and organizations involving business, not-for-profits and governments. This is the real meaning of Davos. Established in 1971, the forum has scores of initiatives to build networks to help solve global problems. This week’s meeting is just one node on a year-round series of events and projects. There is no other institution like it, and over all it makes a very positive contribution.

Don Tapscott is CEO of the Tapscott Group Inc. in Toronto, and the co-author (with son Alex Tapscott) of the bestselling book Blockchain Revolution. Don’s TED Talk (the first TED Talk on Blockchain) at the TEDSummit in Banff, Canada in June has garnered over 1.4 million views.

Follow Don Tapscott on Twitter: www.twitter.com/dtapscott

This article was originally published in The Globe and Mail