27.02.2019 Author: Deena Stryker

The New Davos Gospel, Democratic Socialism Rescues Capitalism


Although ignored by the US media, the message to come out of The World Economic Forum this year was nothing short of revolutionary: the movers and shakers of the world have been informed that globalization is in need of a serious overhaul. As one lone congressman from Ohio, Tim Ryan, recently put it, summing up a largely unspoken concern among American politicians as well: “We need to rescue capitalism from itself.”

The United States is the only country where, a hundred and fifty years after Marx wrote Das Kapital and the first social democratic party was founded in Germany (1863), ‘socialism’ is still a dirty word. A year after Bernie Sanders ran for the nomination against Trump as a Democratic Socialist, Alexandria Ocasio Cortes, a freshman rep already known by her initials, put forth an ambitious plan to beat climate change, yet pundits still refer to the Democratic Party’s socialist as the ‘far-left’.

The Washington Post does pay a young woman to write about socialism, probably because she does it from a Catholic point of view. But after watching a recent interview with Liz Bruenig, I fear her contribution could do more harm than good: She stated that under communism ‘there is no government’, a total distortion of the communist aspiration to see government gradually wither away! (As any communist will tell you, this hasn’t happened anywhere.)

Although socialism and democratic socialism have more or less ruled Europe for more than a hundred years, Americans are unlikely to become ideologically literate any time soon. This makes the news from Davos — hitherto the place where the worlds movers and shakers organized things to their exclusive advantage — all the more significant. The German economist and engineer Klaus Schwab (yes, that Schwab) who convened the first yearly Davos meeting in 1974, two years after the publication of ‘The Limits to Growth’ revealed the systems thinking that inspired that landmark work. In an address that should have made headlines, but didn’t, Schwab declared:

1. It’s not the ‘fault’ of the rich that the poor are suffering, it’s the

unprecedented complexity of our global system’, as well as:

2. The accelerating speed of change caused by the Fourth Industrial Revolution, and

3. The fact that the steering mechanism for global governance created in the mid-20th century is quickly becoming outdated, leading to

4. Popular uprisings to take back control.

While America’s European allies were refusing to adhere to America’s Iran sanctions, and Poland torpedoed an Eastern European meeting with Netanyahu because his acting PM declared that its people “sucked anti-Semitism with their mothers’ milk,” Schwab was presenting the five sub-systems that rule this fractious world: ecological, economic, technological, social and political.

Suggesting that “the world needs a New Deal for Nature as a Whole, a collaborative approach to global governance based on common interests, coordinated achievement of common objectives, and respect for multipolarity and diversity, he gave the nod to both President Putin and the multiculturalists who oppose US hegemony.

Schwab’s Global Risks Report 2019 outlines a consensus that, alongside climate, one of the biggest causes for concern are large-scale cyberattacks, the breakdown of critical IT infrastructure and networks, bias and privacy concerns. However in a first, he also acknowledged that: “Our ‘winner-takes-all’ model contrasts sharply with the situation of a new ‘precariat’ arising all over the world, requiring a new normative framework for global system change, that involves all stakeholders: civil society, business, government, and individual citizens and groups.”

Most importantly, Schwab declared that no single actor has the capability to restore order in the global system. ‘If ever the world was a unipolar world, that time is over. If ever there was a political system with absolute sovereignty, it no longer exists. We can turn our back on the digitally and environmentally connected world we live in today, but we cannot escape its reality.”

Calling for an ethically based, human-centric, gender-balanced system, Schwab recognized that elites need to be “more trustworthy role models’, stamping out corruption and other excesses.” Admitting that thismay well mean a renewed focus on redistributive policies and taxation,” he called this a re-moralization of globalization. Translated into classical political terms, it suggests replacing so-called ‘liberal’ capitalism with democratic socialism.

As suggested in the title of this article, in the years leading up to the implosion of the Soviet Union, some economists believed that sooner or later the two major world systems, capitalism and socialism, would ‘converge’ into the happy medium known as ‘democratic socialism’. Three decades later, the former ‘Communist Bloc’ has become more democratic without throwing the socialist baby out with the bath water, retaining the same social policies that have been enjoyed since the end of World War II across Europe, and most prominently, in Scandinavia. Even ‘Capitalist China’ has done so, while due to a lack of political literacy, the United States remains mired in antiquated anti-communist rhetoric.

After decades of elite acceptance of US hegemony, Schwab declared that no single actor has the capability to restore order in the global system. ‘If ever the world was a unipolar world, that time is over. If ever there was a political system with absolute sovereignty, it no longer exists. We can turn our back on the digitally and environmentally connected world we live in today, but we cannot escape its reality.”

It will be up to Bernie Sanders, who is running again, to make sure that this time around, his voters understand what he is talking about. Given the huge role Davos plays across the world, perhaps we can hope that Chairman Schwab’s ‘revelations’ will filter down to the press.

He recognizes that there are two ways of dealing with our systemic imbalance, one negative and the other constructive: “The negative approach would allow national leaders to focus solely on their national interests, on the understanding that preserving national social cohesion is their sole priority. This would further disintegrate the global system.”

Crucially, Schwab recognizes that “the constructive approach to the new global reality cannot be done top-down as in the past, but only by strengthening the elements of the system from the base.” This coincides with the next phase of democratic socialism, which is the participative democracy the Yellow Vests and other populist movements are calling for. Hopefully, reading Schwab’s report, the US media will decide to ‘go all the way’ and learn the ins and outs of democratic socialism, so that convergence really happens.

They could start by explaining to Americans that it doesn’t mean the government will run their lives: only that it will take the responsibility of making sure every life can be lead with dignity.

Deena Stryker is an international expert, author and journalist that has been at the forefront of international politics for over thirty years. She can be reached at Otherjones. Especially for the online magazine New Eastern Outlook”.

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