The World Economic Forum and its Davos Conference by Dan Mitchell

Every January, because of its annual conference in Davos, I get asked about the World Economic Forum (WEF).

It’s time to finally respond to those inquiries. Three things come to mind, one positive and two negative.

• One the positive side, the WEF used to publish a Global Competitiveness Report that I often favorably cited (2009, 2010, 2011, 2012, 2016, 2018), even though it was not as methodologically sound as Fraser’s Economic Freedom of the World or the Heritage’s Index of Economic Freedom.
• On the negative side, as illustrated by this tweet, the WEF’s annual conference in Davos has attracted lots of wealthy hypocrites who fly to Switzerland in their private jets while pushing a climate agenda that would lower living standards for ordinary people.
• Also on the negative side is that the WEF and the Davos conference have tended to be platforms for other misguided ideas, such as global governance (cartels to empower politicians) and the so-called Great Reset (dirigiste policies such as eroding shareholder rights).

I might overlook that last negative point if there were lots of pro-liberty speakers like President Milei of Argentina. Sadly, people like him are the exception rather than the rule. It seems that there are always many more statists on the agenda.

Weighing the positives and negatives, I’m not a fan of the World Economic Forum. That being said, I also think it is silly to view the organization as being part of some grand conspiracy.

It’s more akin to a global Chamber of Commerce, with the same problems that sometimes are found with the U.S. Chamber of Commerce (support for cronyism, bailouts, industrial policy, etc).

The bottom line is that the rich and powerful often are more interested in preserving their wealth than they are in policies that enable the creation of new wealth.

Especially since they might lose out if there is creative destruction!

Let’s look at what some other people think.

Writing for the U.K.-based Daily Telegraph, Dan Hannan has a good description of the Davos crowd.

While the WEF does not have a unified party line, delegates at its smugfest have a great deal in common. They like regulations, which are designed by and for people like them and which, though they are dressed up as being about consumer protection or greenery, end up keeping out the competition. They approve of government task-forces and advisory agencies – indeed, they meet in Davos partly to lobby each other for jobs on such bodies. They love supranational institutions, and regard sovereignty as dangerous, atavistic and, worst of all, low-status. …There is nothing pro-market about Davos. Here are the directors and lobbyists of Atlas Shrugged brought to life: woke, subsidy-hungry, pleased with themselves, ambitious, conformist, reluctant to express a view until they have a sense of the room. …our own age is corporatist, managerialist and high-spending, and delegates duly parrot those orthodoxies.

Walter Russell Mead had similar observations last year when writing in the Wall Street Journal about the WEF meeting in Davos.

It is that time of year again. The skies over Davos are thick with private jets flying in billionaires to bemoan the problems of climate change… It isn’t only the discordant but relentless mix of green virtue-signaling and conspicuous consumption. You will hear more talk about the evils of inequality…, yet everyone wears a badge that delineates his exact place in an elaborate and inflexible pecking order. …The WEF grows out of a German understanding of capitalism. …Business needed to demonstrate that capitalism could beat the socialists at their own game. Big business would work with the government to achieve important social-welfare goals. …That ethos of coordinating public and private efforts to achieve social goals powered the WEF from its earliest years, and the vision of public/private partnerships in service to the forum’s vision of the common good remains the animating principle of Davos to this day.

Here are excerpts from a 2023 column by Jim Geraghty in National Review, which focuses on hypocrisy.

…among many conservatives the reflexive response to the Davos conference is disdain, and there’s no getting around the fact that our world’s elites have earned their share of contempt. …so many Davos attendees arrive with an ambitious plan to save the world, and that plan to save the world usually involves making the rest of us change to fit their visions. …instead of sounding the alarm about China or Russia endangering the rest of the world, Davos attendees seem a lot more riled up about you, your sport-utility vehicle, your house, your diet (specifically the meat you consume)… Axios writes, “quips about taking private planes to a ski resort to lament climate change have become an annual tradition.” Er, yes, but it’s not like the critics of Davos made that up or exaggerate the reality. The need to reduce carbon emissions is, year in, year out, one of the biggest themes and messages of the Davos conference, while the attendees rank among the individuals with the highest carbon footprints on earth. Last year the attendees used roughly 1,000 private jets.

Adding outrage to injury, American taxpayers are subsidizing Davos, as reported by Adam Andrzejewski .

You probably didn’t even realize it, but you – the American taxpayer – helped fund the sponsoring organization with tens of millions of dollars in federal grants. Since 2013, WEF received nearly $60 million from U.S. taxpayers. Our auditors at OpenTheBooks.com found that under the Trump Administration, the WEF received $33 million, which outpaced the $26 million in second-term Obama-era funding. …So, how did WEF soak up nearly $60 million in U.S. taxpayer funding since 2013? It was mostly through the State Department’s USAID; taxpayers paid $16 million to support the WEF Grow Africa program, which facilitated trade partnerships between agricultural businesses and African governments. Another $43 million went to WEF’s Global Alliance for Trade Facilitation program, to “boost competitiveness and business conditions, which are key drivers of inclusive economic growth and poverty reduction” in developing countries.

Notwithstanding all the above criticisms, Peter Roff has argued in favor of participation.

…the World Economic Forum held each year in Davos, Switzerland. …a pricy gathering of global glitterati that helps determine what the rest of us will be doing not weeks but years ahead. With so much at stake, you’d think the most ardent supporters of free minds and free markets would be beating down the doors of the complex where it’s held. …Instead, they write it off as some sort of global socialist conspiracy… Darrell Issa, the…California Republican congressman..agrees with the criticism but is aware of the importance of being part of the discussion. “We should not accede to being excluded from a deeper dialogue at the World Economic Forum any more than being shut out of college campuses, online platforms, or public forums,”

I agree with Peter. I frequently speak at conferences, testify to Congress (here and here), or participate in media panels (here, here, and here) where I am the token supporter of freedom.

But I do it in hopes of winning converts (which may be naive on my part, but it’s my job).

So if I ever get invited to Davos, I would participate. But I’m not holding my breath waiting for it to happen.

P.S. I can’t resist the humor value of this Daily Mail article.

The global elite tackling the world’s greatest problems – including gender inequality -at the Davos summit are fuelling a surge in prostitution in the Swiss resort town. Demand for sex work skyrockets each year at the meeting of world leaders and business tycoons who jet in from all around the world to rub shoulders with each other. …One sex worker named Liana said she dresses in business attire so she doesn’t stand out among the executives, despite prostitution being legal in Switzerland. …Liana charges around €700 ($760) for an hour and €2,300 ($2,500) for the whole night, plus travel expenses. The manager of one escort service in Aargau, 100 miles away from the summit, says she has already received 11 bookings and 25 inquiries – and expects many more to follow this week. …In 2020, an investigation by The Times found at least 100 prostitutes travel to Davos for the summit according to a Swiss police officer.

Since I don’t patronize those types of prostitutes (I only deal with the version you find in Washington), I don’t know if Davos attendees are getting a good price. But I hope the government officials at the conference are not financing their hijinks with tax dollars (though that might do less damage than some of the other ways they squander our money).