What is the Great Reset?

The earth wearing  a mask and virus icons against it

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The World Economic Forum (WEF) has announced that it will be holding a unique twin summit in January 2021 on the theme of “The Great Reset”. The idea is to build the foundations of a new economic and social system out of the chaos caused by the pandemic this year.

The World Economic Forum

The World Economic Forum (abbreviated as WEF) is an NGO that was founded in 1971 by Klaus Schwab, a business professor at the University of Geneva. Originally called the European Management Forum and focused on business practices, the name was changed in 1987 to become the World Economic Forum. Over time, this NGO has grown to focus on broader economic and social issues. Since 1974, political leaders have been invited to attend the annual conference at Davos.

The WEF is funded by over 1,000 member companies, typically global enterprises with more than five billion dollars in turnover. Through the WEF these influential companies engage in projects and initiatives to address broader socioeconomic issues. The forum’s action is guided by the ethical principles established in the Davos Manifesto.

The Davos Manifesto of 2020

In the Davos Manifesto of 2020, Klaus Schwab defines one of the universal purposes of a company as “more than an economic unit generating wealth. It fulfils human and societal aspirations as part of the broader social system. Performance must be measured not only on the return to shareholders, but also on how it achieves its environmental, social and good governance objectives” acting as “a steward of the environmental and material universe for future generations”. These ideas are linked to the concept of stakeholder capitalism promoted by the WEF and discussed later in this article. If you’re interested in environmental protection, you might also like to read the JackpotCity online casino blog article on casino carbon emissions.

The Great Reset – an economics book, a conference theme and a series of talks

In June 2020, Prince Charles of Wales and WEF Founder and Executive Chairman, Klaus Schwab, announced that the 51st World Economic Forum Annual Meeting (2021 edition) will focus on the theme of the Great Reset in a post-pandemic world. Moreover, the meeting will be open to a broader group of people than previous years seeking to involve more of the global community, particularly young people. This will be done through the Global Shapers Community with hubs located in 400 cities around the world remotely connected with the leaders in Davos. These hubs propose to allow any interested citizen to take part in the dialogue. Global media and social media will also be calling for people to share their input and will provide access to the discussions at Davos. However, the ways that citizens can do this have yet to be clarified and the hubs appear to be only for young people between 18–27 years old.

The announcement about this year’s meeting, coincided with the launch of a book, COVID-19: The Great Reset by Schwab, which explains the WEF’s ideas about a post-pandemic recovery. The Great Reset is also a virtual series of discussions named, The Great Reset Dialogues, which will take place in the lead up to the 51st annual meeting in January 2021.

What the WEF describes as a “dual summit” will involve in-person and remote discussions connecting key government and business leaders in Davos with the wider global community. The aim being to “bring together global leaders from government, business and civil society, and stakeholders from around the world”. The hope is to seize on the collective wisdom and ideas of people from the worlds of politics, religion, technology, business, science, the arts and civil society in order to look for the best way out of a dangerous situation in which depleted resources, rising populism, state aggression, inequality and poverty, climate change and now the coronavirus pandemic threaten our way of life. The forum isn’t designed to control and shape the world for its own benefit; but is designed to address changes that are taking place anyway and attempting to reduce the damage they will cause.

Conspiracy theory alert!

A conspiracy theory about the Great Reset has been embraced on the Internet and social media. A conspiracy theory is certainly more interesting than an annual leadership conference or economics book. Consequently, it seems to be getting more coverage than the real Great Reset conference. The only news article I could even find from a reputable NZ source about the Great Reset was focused on a conspiracy theory, and aptly titled “Global Plandemic”. The article by Mark Peters describes the antics of Billy Te Kahika (self-proclaimed political leader) who refers to Jacinda Ardern as a labour communist and sort of deep state manipulator. You can find the link to it here. The best part of this article was by far the comments section, particularly the remark made by Stuart Perry of Hastings, and I quote: “I can’t believe that a reputable paper like The Gisborne Herald would give these wingnuts air-time. I’ve been involved in politics for many decades and read some absolutely preposterous drivel, but this bunch really take the cake. But then I guess when they are supported by conspiracy theorists, anything goes. The real surprise is that The Herald published this diatribe!”. So superbly summarised, I couldn’t say it better myself. Back to the real Great Reset…

The 51st Annual Meeting of the WEF at Davos

So, is it just another WEF annual meeting? That’s right, plus a book, plus a series of online discussions. Each year, the WEF holds its annual meeting in Davos, a town with a large conference centre and popular ski resort in the Swiss Alps. The meeting usually brings together roughly 3,000 business leaders, political leaders, economists, celebrities and journalists to talk about the most important global issues across 500 sessions. Over the years, the annual meeting has been criticised as being a chance for the wealthy global elite to set their own agenda without regard to broader society. It’s true that the conference invites the wealthy global elite to participate, but in order to come to agreements on how to solve critical problems facing the world and with a very clear set of ethical guidelines in the Davos Manifesto.

The WEF annual meeting in 2020 ended in disagreement, with a heated discussion taking place between US Treasury Secretary Steven Mnuchin and Christine Lagarde, the president of the European Central Bank, which highlighted the divisions that exist between the United States and Europe over the climate crisis. Greta Thunberg memorably slammed Davos attendees for talking too much and taking no action. Her fellow activist Louis Neubauer said, “Here at the WEF we see and hear a lot of nice words and a lot of big speeches, and we expect throughout the next days and months every single one of those to be turned into action”. He will have been sorely disappointed in 2020. The ensuing COVID-19 pandemic has meant that many climate policies have been put on hold if not reversed entirely in efforts to save the economy, which shrank alarmingly during lockdowns.

Considering the disruptive events of 2020 and the quarrelling at the last meeting, it is more important than ever that the WEF 2021 annual meeting results in effective action.

Pandemic 2020 – catastrophe as catalyst

In many ways, the year 2020 seems to be a year of catastrophes in which intolerance, persecution, climate change and health crises have converged, aptly summarised by one writer, Alex Liu as the “no normal”. Ian Bremmer in Time magazine tells us that “the pandemic […] turbocharged four of the most significant geopolitical trends of recent decades: growing inequality, eroding legitimacy of democratic institutions, antiquated global architecture and ever faster levels of technological disruption”. This technological disruption is part of what the WEF calls the Fourth Industrial Revolution. The very nature of an industrial revolution means that there will be winners and losers in this technological leap forward. The Great Reset is an attempt to help shape the future so that as many people as possible are provided for during and after this transition. For example, while the most innovative parts of our society have been largely unaffected by the turmoil of the pandemic, as most of them already have experience working remotely and ordering food and supplies online; those left behind in the digital transition have found themselves completely isolated and cut off.

The pandemic has had serious long-term consequences for economic growth, public debt, employment and human wellbeing. According to the Financial Times global government debt is at its highest level ever seen in peacetime. Some countries have already used the crisis as an excuse to weaken environmental protection measures. All of these things could leave the world less equal, less sustainable and more fragile. But on a more positive note from Prince Charles in May: “Its unprecedented shockwaves may well make people more receptive to big visions of change”.

The WEF hopes that out of the health and economic crises caused by the pandemic we can build the foundations of an economic and social system for a more fair, sustainable and resilient future with a “new social contract centred on human dignity, social justice and where societal progress does not fall behind economic development”. This type of change is urgent, since if nothing is done, we make ourselves vulnerable to worse disasters in the future. As Klaus Schwab explains, the pandemic is a rare but narrow window of opportunity to reflect, reimagine, and reset our world. The changes we have seen during lockdown show us that a new way of living is possible, and that we can reset our economic and social foundations. It’s vital that we do this now because if we don’t do anything about it, we could be facing the worst depression since the 1930s. Historians recognise many parallels between today’s political climate and the interwar period. Thankfully, there are also differences and what could be grounds for despair, could also be a catalyst to build something better. As Prince Charles explains, “there is a golden opportunity to seize something good from this crisis”.

Interconnectedness and stakeholder capitalism

Greater connection between leaders and the people, and between people, has the potential to effect the most change. The spread of the coronavirus showed us just how interconnected the world is today. Our fast transport systems and efficient logistics chains have also sped up the propagation of the virus. Significant drops in air pollution during lockdown are a clear sign (if anyone ever had doubts) that pollution and climate change is caused by human behaviour and could easily be solved by it too.

Part of the Great Reset discussions will be focused on implementing stakeholder capitalism. In this ideological system, corporations strive to serve the interests of all stakeholders: customers, suppliers, employees, shareholders and local communities. The focus of the corporations is to create long-term value rather than maximise profits or maximise shareholder value at the cost of other groups and the planet. The World Economics Forum’s central theme in 2020 was shareholder capitalism for a cohesive and sustainable world.

The concept of shareholder capitalism, in reality, is nothing new. It’s one of the original precepts of Adam Smith, the father of economics: the responsibility of a business is to give back to the community and enrich everyone. Jean Jacques Rousseau, advocated that governments should intervene to ensure that any society’s economic benefits should be fairly and meaningfully distributed. The primacy of shareholders in 20th century capitalism has driven us further and further away from Smith and Rousseau’s ideas. The result has been rising inequality, a gargantuan gap between rich and poor and an increasing North-South divide.

What does Stakeholder Capitalism look like in practice?

Investopedia gives us a good definition of stakeholder capitalist. In a real-world situation, if a company is guided by the objectives of stakeholder capitalism it will pay fair wages, reduce the CEO-worker pay ratio, ensure safety in the workplace, lobby for higher tax rates and avoid tax loopholes, provide good customer service, engage in honest marketing practices, invest in local communities and prevent environmental damage. These practices can be adopted by the leader of an individual company or enforced on a wider scale by governments through legislation and regulations. These are precisely the sort of changes that the WEF’s Great Reset will be focusing on implementing with an extra emphasis on “preventing environmental damage” and helping the global community.

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