Last week should be the last Davos

Apparently, the World Economic Forum – a pre-skiing holiday talking shop for many of its attendees – exists as “an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas”.

If some global business people, journalists and academics wish to waste their own money attending this conference, then I guess we would have nothing to complain about. However, the World Economic Forum, which deliberated last weekend, is also a huge magnet for politicians and public intellectuals to make grand-stand speeches and for politicians to mix with and exchange ideas with major business leaders. It is, in other words, a perfect environment for “crony capitalism” to flourish. Will small businesses be there to make the case against the expansion of regulation such as the EU temporary workers directive? Of course not. They will be hard at work trying to make a living in an increasingly hostile economic climate. David Cameron says that he wants to root out crony capitalism. He should therefore have boycotted Davos.

But, the main objection to Davos must surely be the hubris of those involved. We do not need the “global industry agenda” shaping by self-appointed experts. Industry is shaped by the dispersed decisions of seven billion consumers and millions of businesses. Industry is shaped from the bottom up and not from the top down. Davos attendees would do well to take note of Hayek’s appeal to economists: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design”. How little we know is perhaps indicated by the Davos Reports on risk at the 2007 meeting. I could not find any concern about risks within the banking system – bird flu was the main worry.

Read the rest of the article on ConservativeHome.

Philip Booth is Senior Academic Fellow at the Institute of Economic Affairs. He is also Director of the Vinson Centre and Professor of Economics at the University of Buckingham and Professor of Finance, Public Policy and Ethics at St. Mary’s University, Twickenham. He also holds the position of (interim) Director of Catholic Mission at St. Mary’s having previously been Director of Research and Public Engagement and Dean of the Faculty of Education, Humanities and Social Sciences. From 2002-2016, Philip was Academic and Research Director (previously, Editorial and Programme Director) at the IEA. From 2002-2015 he was Professor of Insurance and Risk Management at Cass Business School. He is a Senior Research Fellow in the Centre for Federal Studies at the University of Kent and Adjunct Professor in the School of Law, University of Notre Dame, Australia. Previously, Philip Booth worked for the Bank of England as an adviser on financial stability issues and he was also Associate Dean of Cass Business School and held various other academic positions at City University. He has written widely, including a number of books, on investment, finance, social insurance and pensions as well as on the relationship between Catholic social teaching and economics. He is Deputy Editor of Economic Affairs. Philip is a Fellow of the Royal Statistical Society, a Fellow of the Institute of Actuaries and an honorary member of the Society of Actuaries of Poland. He has previously worked in the investment department of Axa Equity and Law and was been involved in a number of projects to help develop actuarial professions and actuarial, finance and investment professional teaching programmes in Central and Eastern Europe. Philip has a BA in Economics from the University of Durham and a PhD from City University.

3 thoughts on “Last week should be the last Davos”

  1. Posted 01/02/2012 at 01:12 | Permalink

    In other words, it’s a load of tosh, just like all these other big-wig worldy conventions where self-appointed experts and blowhards get together to decide what is best for their own self interests, then come back to their respective countries and begin a unified approach to inflicting it on to everyone else not of their grandiose status and high calibre. I’m certain it’s even nicer for them when they can get government tax money or corporate charity to pay for it. But since I am of lowly sort, I guess my opinion would be considered worthless.

  2. Posted 01/02/2012 at 14:34 | Permalink

    Canadian economist Ian Lee sizes up Davos rather nicely.

  3. Posted 02/02/2012 at 17:33 | Permalink

    I think I agree with you on this. One thing is nothing is ever achieved. They meet, they spend money on expensive hotels, they get nice food then they do it again two months later.

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