What sort of ‘capitalism’ will the Davos elites give us?
Economic and political elites meeting this week at the Swiss resort of Davos will be asked to urgently find ways to reform a capitalist system that has been described as “outdated and crumbling.”
“We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations,” said Klaus Schwab, host and founder of the annual World Economic Forum.
“Solving problems in the context of outdated and crumbling models will only dig us deeper into the hole.
“We are in an era of profound change that urgently requires new ways of thinking instead of more business-as-usual,” the 73-year-old said, adding that “capitalism in its current form, has no place in the world around us.”
“capitalism in its current form, has no place in the world around us.”
If you were to go back and read Whipping the horse to death and Rome, America, and the Collapse of the Welfare State, you would see that I agree with that statement. Capitalism, in the form that it is practiced in most developed countries, is not a sustainable thing. Governments across the western world have promised too much—far more than any system, capitalist or otherwise, can possibly deliver. Public pensions. Massive retirement and medical supports. Huge transfer payments from productive citizens to other cohorts.
That system as it is currently constituted, cannot last and has no place in the world around us. But is that what Mr. Schwab means? Is that what the elites at Davos will feel?
The “elites” of the western world have given us the collapsing version of capitalism we have today, by hanging too many government millstones around its neck. The failure is not capitalism’s fault. The private sector, left unencumbered by such government mandates, would be producing greater amounts of wealth for everyone. Not equally, but in greater amounts for people at all levels than they would otherwise enjoy in any other circumstance.
But if the elites who gave us the massive government that overburdened and distorted capitalism all get together for a conference, what are the odds that they will all suddenly see the light? Will the spirit of the great Milton Friedman visit them, like Jacob Marley? Will they be converted, with the help of the ghosts of capitalisms past, present, and future?
Or, will they follow another path?
Step 1: Destroy capitalism with excessive government
Step 2: Blame the failure on capitalism
Step 3: Determine that the solution is more government
I’ll hold out hope for conversion. I won’t, however, hold my breath.