Challenging the WEF and Its Assumptions
The World Economic Forum (WEF), founded in 1971 by Swiss-German economist Klaus Schwab, has become known in recent years for taking on topics ranging from poverty to climate change to security policy. The organization generates a substantial body of reports with the participation of businesspeople, academics, policymakers, and other public intellectuals. It is perhaps best known for its annual Davos Summit where the group convenes its leading members and sponsors. However, Davos is just one of many recurring meetings around specific projects and topics that the WEF views as fundamental to its mission.
With the renown of the contributors to the WEF and the level of its attendees, readers of its reports might walk away with the idea that their conclusions are in some way definitive and backed by top economic science. After all, the name “World Economic Forum” suggests an international organization that is balanced in its viewpoints, a sort of Congress of economic policy where all views are represented and conclusions are based on sound, agreed-upon economic theories and evidence.
In our observations of the WEF’s activities, however, we see a substantial contrast between the confidence with which it claims to represent sound economic policy and the shaky foundations on which many of its policy recommendations are built. In this forthcoming series of short articles, we will address some of the ideas coming out of the WEF and examine the extent to which they are well-founded in actual economics.
One of the WEF’s major conferences took place this past month when global leaders from business, government, academia, international organizations, and civil society descended upon Geneva, Switzerland for the NGO’s 2023 “Growth Summit”. Here leaders discussed what they believed were the world’s most pressing economic and social issues and the policies that could assist in ameliorating their negative impacts.
Some participants placed special emphasis on an obfuscatory concept called “resilient growth” – a term that on its face conveys political agnosticism but that actually replaces the typical neo-classical understanding of economic growth with broadly left-wing political goals.
The proceedings of the conference emphasized three of these goals in particular: (1) eliminating income and wealth inequities supposedly slowing down economic growth in developing nations[1], (2) ramping up investment more aggressively into green energy projects, and (3) instituting more “inclusion” focused policies such as gender quotas on company boards[2]. Green energy investment in particular was a major focus since the participants believe that investment into these projects could serve a dual purpose in both creating a vast number of new jobs in the global economy and helping the globe reach “net-zero” emissions by 2050.
The framing of each of these issues is fraught with inaccurate assumptions. Our first several pieces will examine these in turn, beginning with the claim that classical approaches toward economic growth have failed to solve “inequities” between rich and poor countries and thus a new approach must be adopted.
[1] https://www.weforum.org/agenda/2023/05/growth-summit-2023-economic-equity
[2] https://www.weforum.org/agenda/2023/05/growth-summit-2023-resilient-growth
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