Davos dodges the future of capitalism
If you’ve come to Davos for answers, panels are not the place to start. An hour into the “TIME Davos Debate on Capitalism” there were, by my count, just two or three concrete proposals for creating jobs.
The panel included Bank of America CEO Brian Moynihan; Carlyle Group co-founder David Rubenstein; Ben Verwaayen, the CEO of Alcatel-Lucent; Raghuram Rajan, a renowned economist; and Sharran Burrows, the general secretary of the International Trade Union Confederation.
The focus of the panel wasn’t quite “Is 20th century capitalism failing 21st century society?” Instead, it was most certainly about non-specific change at the margins. Rajan called for better worker training, Burrows wants corporations to invest a portion of their income into job creation and a VC audience member bemoaned the U.S. immigration policy and a lack of skilled workers. Despite a few exchanges between Burrows and Alcaltel’s Verwaayen, there was almost nothing in the way of real debate.
Take the “too big to fail” banks, for example. When asked about the issue, Bank of America’s Brian Moynihan claimed that his bank simply needed to be massive to serve an increasingly global economy:
It was unfortuante that Rajan, one of the most pointed critics of the “too big to fail” problem, didn’t fight back on this. Bank of America, after all, grew to its current size thanks to an almost unprecedented series of domestic bank acquisitions. There was nothing inevitable about this acquisition binge (just ask Ken Lewis), just as there was nothing inevitable about Bank of America’s disastrous Countrywide acquisition. These were capitalists decisions that had crucial consequences for the global economy, led to government bailouts and tarnished the name of, you guessed it, capitalism.
Moynihan’s argument that his bank’s size simply “comes from the economy” and “reflects its excess,” to me, seems like the central argument we should be having about capitalism. In short: what parts of capitalism are socially useful?
Alcatel’s Verwaayen made a nice point when he complained about the “battle of nostalgia” over the financial crisis, but none of the panelists even mentioned massive global dissent movements like Occupy Wall Street and the Arab Spring. For these movements, the specific choices (read: capitalist choices) made by Davos leaders are exactly the problem.
It’s certainly great news that the world’s elites are paying lip service to inequality and the future of commerce as we know it. But if the Davos Man simply sees himself as a conduit for market demand, there’s no reason to have lofty panels on the nature of capitalism.