The World Economic Forum is an international non-government organization that doesn't
technically have any practical power like the IMF, World Bank or World Trade Organization does.
Even still every year it attracts some of the most powerful economists, policy makers,
business executives, celebrities, religious leaders, journalists and politicians
to a summit that it holds in Davos, a small skiing town in Switzerland.
With no real international function it can be hard to understand why so many powerful people
go so far out of their way to attend an event that has been mired in controversy
almost since its inception. The World Economic Forum itself honestly hasn't done much good to
ease those controversies and has in many ways intentionally made them worse by pushing ideas
that most people might even agree with in ways that are clearly going to be controversial,
inflammatory, misleading and worst of all counterproductive to the arguments they're
trying to make. Unfortunately this often means that controversies around the true
role of the World Economic Forum are often dominated by critics that assume everything
that they do is inherently evil and that Davos is little more than a meeting of
supervillains to discuss their plans for world domination.
Now when a secretive organization hosts the world's most powerful people in a remote
mountain hideout to discuss critical aspects of the global economy and then use branding
terms like the great reset, it's understandable why people are genuinely concerned about the
influence of this organization. Now I know I shouldn't say this at the beginning of a video
that I want you to watch the whole way through, but the level-headed reality is far less interesting
than lizard people and world domination, but in many ways it might be even worse,
and to understand why we need to as always answer a few important questions.
So how did the World Economic Forum grow to be as powerful and influential as it is today?
What is the supposed role of the organization? And finally, what are the genuine problems with
the World Economic Forum that tend to get overlooked by the more sensationalist conspiracies?
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The world economic forum is often thought about in the same group as other international
organizations like the world bank, the international monetary fund, the world
trade organization and even the united nations. These are all large entities that are clearly
involved in macroeconomic, geopolitical and even social issues around the world,
but in a way that's not immediately clear. Now while there are a lot of similarities
between these groups, they all do a lot of independent economic research, they provide
advice to policy makers, they employ thousands of economists, and they all operate as a supposedly
impartial force between national governments. The world economic forum is different because
it wasn't created by governments, and it doesn't get its funding from them either.
Something like the world bank was formed from a delegation of 44 countries after the second
world war. The world bank now has 189 member countries that all contribute funding to the
organization through their national budgets to various degrees. Some poorer member countries
don't contribute anything, and some very wealthy nations like the USA contribute a lot.
This particular organization uses that money with the intention of providing
loans to developing economies so that they can make investments into infrastructure and tooling
to become a productive member of the global economy.
That is the world bank's clear and public objective, and while they do other stuff like
collecting economic data, a lot of which we use here on this channel when addressing things like
GDP figures, they only do this so that they have the data that they need to carry out their primary
mandate of providing funding to developing economies. The world bank doesn't really care
if we have reliable data to put on the economics explain leaderboard or not.
The world economic forum on the other hand was not created by nations,
it had a far more modest origin story.
It was founded by Klaus Schwab, an engineer and business professor,
originally as the European Management Forum.
Schwab got a grant from the European Commission to host a conference where western European
business executives were invited to Davos to learn about different management practices
been employed by companies in the more economically successful USA.
It was really not much different to most boring management seminars happening all over the world
today. Over time though, the scope and guest list of these annual conferences expanded to
global macroeconomic concerns and the policy makers who could make them a reality.
Now a lot of politicians and policy makers are not economists, most of them have a background
in law, so they usually need to learn about the economic implications of their decisions
and policies from economic advisors. There is a genuine value to having a platform like the Davos
conference where the people that are making the big decisions in our own economies can learn about
what has worked and what has not worked in other countries from economists from all over the world.
There is a reason why the UK took 100 years to fully industrialize,
but it only took a country like South Korea two decades. And that's because our world is
now really good at sharing technological and economic know-how. So in theory,
something like the Davos conference can be a real force for good in the world,
but what's more important is how it acts in reality.
It should be noted that the World Economic Forum insists that the annual summit in Davos
is not a conference, it's instead a series of meetings between participants,
although there's really no discernible technical difference, so whatever.
The organization also now does a lot more than just host the annual conference that
it's best known for every year. It funds and publishes economic research, pushes initiatives
like its trillion tree campaign, and also gives out awards to people that it decides
have had a positive impact on the world. The funding for these events and other operations
for the non-profit are provided not by governments, but mostly by businesses
who want to be involved in these talks. Companies that want to attend the Davos
meeting and be engaged with the forum's activities have to pay substantial membership fees that can
be over $600,000 a year on top of individual admission costs.
Of course, the organization, even though it is a non-profit, needs to get its funding from
somewhere, but this in itself created the first genuine problem with the World Economic Forum.
The list of companies that currently partner with the WEF is extremely long,
and it includes a very good share, if not a majority of major international corporations
from every industry around the world. This makes it a bit difficult for the World
Economic Forum to genuinely accommodate what it claims to, which is an intellectual community
for the frank exchange of ideas. Their annual meetings in the past have had a strong focus
on things like sustainable capitalism, environmentalism, renewable energy
development, and social entrepreneurship. But while it boasts of its independence,
it wouldn't be possible for the WEF to continue its operations without this long
list of international companies paying to keep it going.
The small disclaimer here is that on a much more modest scale, even the team here at EE
needs to consider that if we take money from a sponsor to make a video, we can't talk about
stuff that would hurt that sponsor's business, which is why we try to avoid anything that
could conflict with an unbiased analysis of the topics we want to discuss.
So when the WEF wants to host discussions about a shift away from fossil fuels,
while being sponsored by BP, Shell, and Aramco, it raises an obvious question.
If it effectively advocates against the best interests of these corporations,
why do they still support it? This either means that it is not effective,
in which case all of the big talk about making the world a better place is just greenwashing,
or there is some other reason that it's worth it for these companies to still be there.
Another criticism of the organization and its meetings is that these initiatives are
hard to take seriously with such blatant hypocrisy amongst attendees.
All the talk of a green economy or sustainable capitalism won't do much good when the people
with the power to influence this change flew in to talk about it on a mission spewing private jets.
For an event that is so well funded, there have also been criticisms that the Swiss
government has to spend millions of dollars every year providing security in Davos.
Perhaps the even more concerning thought though is that if the topics discussed at Davos do
effectively find their way into real policy debates that have the potential to hurt the
companies paying to make it all possible, they pay up anyway because there is a more
important reason to be involved, the stuff that happens behind closed doors.
Most of the talks, Q&A panels, and roundtables that happen at Davos are available to watch online,
which is great, but it also means that instead of paying hundreds of thousands of dollars,
attendees could just get the same information online for free.
If the open discussions and free exchange of ideas really were the true draw of Davos,
it wouldn't make sense to be paying that much for it when it could be had for free.
Of course, the real reason that companies pay so much to attend this event is to be
involved in the discussions that are not posted online, which means that most of the talks and
panelists are vaguely marketable window dressing for the real attraction, which is a networking
event for some of the most powerful people in the world. One lucrative deal hammered out with a
world leader or even another company executive would pay the price of admission a thousand
times over, and the price of not being involved is that a business might get cut out of an
opportunity that gets discussed at this event and granted to their competition.
Part of the reason that the world economic forum and the Davos meetings get as much criticism as
they do is the understandable animosity that people have towards a big club that they are
not invited to, especially when that club is discussing things that could have a very
tangible impact on the way that they live their lives. It also in many ways detracts
from their apparent mission of acting as a forum for a broad range of ideas when the
barriers to have a voice at the event are so high, and the group of people that regularly
attend the event do so so regularly and change so infrequently that Klaus Schwab himself has
referred to it as the Davos family. Usually the people who are coming to Davos are part of this
what I would call Davos community of regulars. The same people in the same location all from
the same overwhelmingly privileged backgrounds are not going to have the broadest ideas,
opinions and objectives, or even objectives that align with regular people for that matter.
They could lower these barriers to entry, but they won't because their major partners want
a place to lobby, not a place to hear about the challenges of working class families.
These concerns over time naturally evolve from it would be nice to know what gets talked about
at Davos to they are lizard people secretly plotting to take over the world.
Now the world economic forum also could have taken steps to address these concerns,
but for some reason they have gone in completely the opposite direction
and seem to be trying to put out the conspiracy bonfire with gasoline.
The best example of this is that every year they have a general theme that they run their
meetings around that most of the presentations are supposed to link back to. A big focus from
a few years ago was the great reset. We did an entire video on that back when it was first
announced because the world economic forum, an organisation that is supposed to be about
the clear discussion of ideas, did an absolutely terrible job of explaining what the great reset
even was. In reality it was just a thought experiment about how the global economy could
be built back better after the global pandemic since it was such a major global shock that it
was almost like a reset to the system. It was an opportunity for participants to discuss ways
to implement new ideas that could have very well had real advantages, but would be difficult to
roll out when an economy was operating at full capacity. To make major modifications to a car,
the car is usually turned off. Unfortunately an economy can't normally be turned off to do the
same which is why it was seen as such an opportunity. The world economic forum needs
to keep its attendees interested to keep them coming, and it needs important people to keep
coming to stay relevant. So something like the great reset was little more than clickbait for
the global elite when the content of the forum would be pretty mundane discussions about economics.
Instead of clearly explaining that, the WEF doubled down on something that without context
sounds extremely scary and made press releases about eating bugs and owning nothing featuring
an unelected world leader that is divisive at best. Now the people that run and attend these
events are all very smart, and some of them, especially the politicians only have their
careers because they know what will resonate well with people. The great reset very clearly wouldn't,
so they were either so out of touch that they somehow thought this sounded appealing to regular
people or so untouchable that they just didn't care. The reality is that Davos is just a boring
conference that has morphed into a key event on the networking calendar where businesses and
politicians know that they can talk directly to one another outside of official channels.
It's not a mountain lair where lizard people are secretly plotting to change the world,
it's kind of worse. It is a very well-publicized event where they don't even really bother to try
and hide what goes on and almost antagonistically play into the concerns that people have about
what their elected and unelected leaders are doing up on that mountain every year.
Now if you want to learn about what the great reset was supposed to do,
as we mentioned earlier we made a video a few years ago about that.
We didn't want to repeat too much here, especially since it's now an out of date
topic for the world economic forum, but you should be able to click to that on your screen now.
Thanks for watching mate, bye.