The Anxiety at Davos

Are the world's most powerful capitalists finally feeling as pessimistic about the economy as nearly everyone else?

Ruben Sprich / Reuters

On Wednesday, the World Economic Forum’s annual meeting—a gathering of business and political elites from around the world—began in Davos, Switzerland. The stated goal of the three-day event is “improving the state of the world.” It’s only the first day, but there’s one distinct note issuing from Davos so far: pessimism.

Expanding on the myriad reasons for pessimism about the world economy would go far beyond the scope of this article, but a few preoccupations on display at Davos so far include worries about global growth, emerging markets, China’s slowdown, Europe’s future, extremely low oil prices, the boardrooms’ gender gap, the automation of jobs, and, perhaps the most pessimistic of all, the threat of another financial crisis and no regulatory tools left to fight it. CEOs are reportedly anxious: Only 27 percent feel optimistic about economic growth worldwide, according to a PwC survey. (Worry isn’t exactly new, though: Global financial instability figured heavily in last year’s annual meeting too.)

While the negative emotions and beliefs that people hold during times of economic instability can matter a lot, there’s another anxiety at Davos that could be a little more productive. Though the World Economic Forum has often been written off as an elite schmoozefest, the issue of global inequality has been a theme at Davos for the last five years.

This particular anxiety might be a positive sign of change. When Klaus Schwab started the conference in 1971, the retreat focused on corporate management practices. But about a decade ago, journalists started wondering why Davos participants appeared to start caring about the world beyond corporate interests. William Keegan wrote in The Guardian, “Can it really be that the World Economic Forum of Davos, described by one (French) participant as the 'temple of capitalist narcissism,' now places the elimination of poverty at the top of its agenda?” In 2007, Daniel Ben-Ami observed the same shift:

Something weird seems to be happening to the world’s elite. Many of them have apparently become deeply concerned about the poor wages being paid to workers in the developed world. To many observers this might seem as likely as a snake playing the violin. But judging from the discussions at the World Economic Forum in Davos last week, the rich and their advisers are genuinely worried.

Those who are cynical, such as Ben-Ami, suspected that the discussions of inequality at Davos have simply been for show. (If Davos participants really care about stagnant wages, why don’t corporate leaders commit to paying their employees more?) Others suspected at the time that the emergence of inequality at Davos stemmed from fears of a backlash for those globalization wasn’t working out for.

That backlash came during the financial crisis. Now, inequality is an issue that’s very much on the table for discussion. Nonprofits, activists, and even the pope encourage Davos participants to address it. Oxfam’s yearly report on inequality, which is released the week before Davos, is grimmer than ever: The wealth of the 62 richest people in the world have about the same amount of money as the poorer half of the world—3.5 billion people—has. (In 2015, it took 80 billionaires’ riches combined to reach that level.) In a letter to Klaus Schwab, now the executive chairman of the World Economic Forum, Pope Francis wrote, “To all of you I appeal once more: ‘Do not forget the poor!’ This is the primary challenge before you as leaders in the business world. ”

Since the financial crisis, there’s been a renewed, more urgent focus on inequality at Davos. The PwC survey, in which CEOs expressed pessimism about global growth, also found that corporate leaders are increasingly pressured by both customers and their own employees to address social issues. For those who are not the economic elite, that might be reason for some optimism: The pessimism at Davos is at least a sign that the those at the top of the world are getting a sense of the view from the bottom.