The Great Reset of Capitalism from Davos to Singapore

tHe gReat >Reset

Of Capitalism from davos to singapore

by Giovanni Di Lieto

Giovanni di Lieto, International Trade Specialist asks whether The Great Reset will bring real change or just more of the same?

The World Economic Forum Special Annual Meeting 2021 will convene in Singapore on the 17th to the 20th of August to further develop the Davos Agenda. The Forum will gather global stakeholders to address the steps for global recovery in the aftermath of the COVID-19 pandemic. Klaus Schwab, Founder and Executive Chairman of the

World Economic Forum, is adamant that we can emerge from this crisis a better world, if we act quickly and jointly. In his latest book, The Great Reset, Schwab writes that the changes we have already seen in response to COVID-19 prove that a reset of our economic and social foundations is possible, and that this is our best chance to instigate stakeholder capitalism. Thus, Schwab urges a new social contract to reform education and working conditions together with the transformation of key industries, from oil and gas to tech. In short, Schwab calls for a “Great Reset” of Capitalism. But it’s an ambitious goal that begs the question: Can global capitalism be saved from itself, by itself, despite itself? To attempt an answer, first we need to consider that the World Economic Forum’s Great Reset Initiative is the vanguard of an ideological re-foundation from above, which is expressly proposed by the elites for the elites facing the abyss of an existential crisis due to internecine economic conflict, faltering political domination and social revolt from below. For Schwab and his acolytes, it is a question of taking up the challenge posed by the evident failure of the neoliberal economy and by the end of its economic, political and cultural hegemony that became globally entrenched after the Cold War ended. The COVID-19 pandemic cruelly made evident that amoral shareholder capitalism within a context of small government is simply no longer sustainable. So, after more than three decades of neoliberal determinism, what is to be done to save capitalism according to the World Economic Forum? Reading through the Great Reset Initiative, one may have the impression that the COVID-19 pandemic converted Schwab into a bleeding-heart liberal. More cynically, one may add that he is expediently repositioning the World Economic Forum at the spearhead of a reprise of neo-classical liberalism.

Be that as it may and whatever the political labels in use, the Great Reset of Capitalism is the Trojan horse of an elitist attempt at class re-aggregation in the face of the evolving balance of power between the US and China. Basically, the Great Reset Initiative sounds a lot like a job application template for seasoned executive leaders in the post-pandemic brave new world. But in substance it is more of a face lift for the henchmen of 1990s neoliberalism who are vying to turn its demise into their own success. I guess that this shift has already procured prestigious new jobs for septuagenarians like Joe Biden and Mario Draghi, so others will surely follow in their steps. A sure indicator of such politicoideological expediency is that the whole conceptual framework of the Great Reset Initiative is based on complexity theory, which explains change in systems by way of interactive feedback loops operating horizontally and interdependently (see figure below).

Anyone wishing to seek a comprehensive explanation of economic redevelopment, or a teleology of social change, would therefore be disappointed. The World Economic Forum offers no holistic narrative in this regard, and it beggars belief that the Great Reset of Capitalism may occur from above by the old neoliberal

The Global Risk Interconnection Map Source: World Economic Forum Global Risks

leadership who have no consciousness of hierarchically-ordered links and causal mechanisms of change within a social system. Taking into account the Global Risks Interconnections Map, the COVID-19 crisis is essentially interpreted by Schwab as a very powerful accelerator of disparate, if intertwined, dynamics. But then where is the real, effective change in the social contract coming from? Note that Schwab calls it the great reset, and not change. A reset is inherently the act of setting the same thing again, sure enough differently in process but not in substance. Indeed, when the Great Reset Initiative looks at technological reorganisation, the emphasis is on the acceleration of digital transformations and changes in consumption and regulation. For instance, COVID-19 introduces elements of uncertainty, including the choice between saving lives and the economy, in the link between economic growth and employment, monetary and fiscal policies, the alternative between deflation and inflation, the fate of the US dollar as the global reserve currency, and the decoupling of global supply chains. But then I ask how on earth can social rearrangement move towards a new social contract from dynamics of widening inequality trends, which exacerbate every crisis with stimulus packages glutting the equity markets with low-interest capitals? Is the resumption of "big government" all there is to the Great Reset of Capitalism? In this respect, it is hard to think that re-industrialisation and social welfare problems can be tackled with integrally marketbased solutions, unless the delicate balance between public and private (indeed the raison d’etre of the World Economic Forum) will shift decisively back in favour of the former. If I am reading this right, the World Economic Forum is then arguing for global capitalism with Chinese characteristics. Indeed, on the geopolitical level, it is all but a question of managing economic growth through the deepening rivalry between the US and China, as well as navigating the trends towards a new regionalization of corporate value chains addressing pandemic and environmental risks. Of course, all of this falls in line with the corporate and governmental greenwash which does little more than kick the can of effective climate change policies down the road and into the lap of future generations. Though greenwashing is coherent with the World Economic Forum’s big picture, as in reality it is only about climate reset rather than change. In conclusion, Schwab is certainly right to point out to the economic elites of the world that, despite the fact that their wealth is continually increasing, doing nothing is not an option. Nevertheless, the Great Reset of Capitalism which is being set up in the air between Davos and Singapore seems poised to disappoint the masses who wake up every morning on the wrong side of capitalism. It is encouraging that the World Economic Forum is even contemplating a Great Reset of Capitalism, but it remains to be seen whether a radical change of system is instead required to benefit the many and not just the lucky few.