Bailout

The global risk that is Davos

By Felix Salmon

Jim Ledbetter reads the 50-page Davos global risks report so you don’t have to, and comes away with three and a half questions, all of which boil down to more or less the same thing: what if Davos is itself a global risk?

Reading the report, you get the strong sense of a circular argument along these lines: ?My tools are broken. How will I fix them? I will use my tools!? About as close as the WEF gets to a solution for broken global governance is ?a well-informed and well-mobilized public opinion sharing norms and values of global citizenship.? Yes, well ? good luck with that.

The one thing that a Davos risks report can never say is that there’s some non-negligible chance that the World Economic Forum itself will make things worse. Last year, when I went looking for contrition in Davos, I sought but did not find “an indication that much if not all of the crisis was caused by the arrogance of Davos Man and by his unshakeable belief that the combined efforts of the world?s richest and most powerful individuals would surely make the world a better, rather than a worse, place.”

That belief remains intact and inviolate, and it severely constrains the ability of the WEF to change its ways for the better: you can’t learn from your mistakes if you never admit that you ever made a mistake in the first place.

Whether we like it or not, there’s no doubt that the delegates at Davos are important and powerful; what’s more, many if not most of them have genuinely good intentions. They also love to talk about quantifiable deliverables, both in business and in philanthropy, which allow people to measure whether what they’re doing is working. But they never apply that mindset to the WEF itself. Because they know that if they did, they would risk finding out that the value it adds is negative.

Full post as published by Macroprudential on January 14, 2011 (boomark / email).