WEF Davos 2013 – Inequality destroys everything

World Econo­mic Forum Annual Meeting 2013 from Janu­ary 23^rd to 27^th

(Jakob Jordaens – „Feast of the Bean King“ – Wikipedia)

If this week in Davos, like every year, the powerful busi­ness leaders and poli­ti­ci­ans meet to rendez­vous, they will once more be summing up and looking forward.

It can be admi­ra­b­ly specu­la­ted, just like during the „Bean­fe­ast of pomp and plati­tu­de“ (The Sunday Times Online 2006), how a key issue, such as the growing social inequa­li­ty, could come to last.

The suppo­si­ti­on that it was like a form of „social washing“ can not be dismissed out of hand. A global citi­zens unsett­ling theme is posi­tio­ned, suggest­ing that they are at least worried about it. But how important is this drama­tic deve­lo­p­ment for orga­ni­zers and guests really? This could be evalua­ted, for exam­p­le, by the amount of doubt that the élite in Davos actual­ly has in the exis­ting finan­cial system. But this topic will not at all be discussed.

The study to evalua­te global risks, commis­sio­ned in prepa­ra­ti­on for this year’s „World Econo­mic Forum“ (WEF), comes to conclu­si­ons which have alre­a­dy been iden­ti­fied as future risks and submit­ted for discus­sion by other experts for years.

OXFAM, a global opera­ting aid and deve­lo­p­ment orga­niza­ti­on, points out on the occa­si­on of this years World Econo­mic Forum that the 100 richest people of the world (of which many will certain­ly attend in Davos – editor’s note) earned four times the sum that would be needed to over­co­me global pover­ty in the last year only. A global „New Deal“ is needed to rever­se the inequa­li­ty growing for decades.

Joseph E. Stieg­litz recent­ly denoun­ced in the New York Times that, after four deca­des of enlar­ging inequa­li­ty, still no action against this deve­lo­p­ment was taken. He draws parti­cu­lar atten­ti­on to the drama­tic disap­pearance of the middle class in favor of a growing distance to the abso­lu­te wealt­hie­st who get richer with incre­asing speed and breath­ta­king growth figures.

Also in the NYT Paul Krug­man repli­es Stig­litz with an argu­ment that makes you think:

„So am I saying that you can have full employ­ment based on purcha­ses of yachts, luxury cars, and the services of perso­nal trai­ners and cele­bri­ty chefs? Well, yes. You don’t have to like it, but econo­mics is not a mora­li­ty play, and I’ve yet to see a macroe­co­no­mic argu­ment about why it isn’t possible.“

These highly deco­ra­ted experts suggest basi­cal­ly why the elites still not (want to?) reco­gni­ze what the actual causes of inequa­li­ty are. If the accu­mu­la­ted finan­cial assets constant­ly would be spent for yachts and luxury cars, we possi­bly would have a smal­ler inequa­li­ty problem. But the immense­ly growing finan­cial wealth of the „1%“ are not growing by consum­ing, but by inves­t­ing. Growth in invest­ments is only possi­ble through growth of debt on the other side. And the other side, those are the 99%, direct­ly and indi­rect­ly feed the wealth of the „1%“.

They still act like the income of the richest has any kind of rela­ti­on to a speci­fic service provi­ded by the wealt­hy. But growing income through wealth is the result of an allo­wan­ce of all – really all, inclu­ding the poorest people – for which the holders of capi­tal provi­de abso­lut­e­ly no service. The exis­ting finan­cial system, more precis­e­ly, the mone­ta­ry system, protects the feeding of the wealth of the „1%“, and in this respect is non-refor­ma­ble. The mone­ta­ry system should be repla­ced by a comple­te­ly new one, geared to the needs of man and nature.

It is ther­e­fo­re only logi­cal that in Davos the finan­cial system will not be up for discus­sion. Becau­se this would indeed ques­ti­on the „busi­ness basis“ of nearly ever­yo­ne present.

Important is the signal to the frigh­ten­ed people in the world that the elites are aware of the growing inequa­li­ty and that they take people’s concerns of further social decli­ne serious­ly. That has to be enough.

One would hope that there would be some „rich and powerful“ in Davos, who for once had the coura­ge to ques­ti­on this system that feeds them. But these kind of spee­ches proba­b­ly only exist in Holly­wood movies. It could mean the salva­ti­on of at least part of their curr­ent­ly exis­ting wealth, becau­se one thing is clear: The growing inequa­li­ty will lead to total destruc­tion in the end. Inclu­ding the wealth of the „1%“.