One of the best things about Davos is the train ride up the mountain. It is not just that the views are stunning. Nor is it simply that the trains always run on time. It is also the absence of the noise pollution found when travelling by rail in the UK.
There are no messages telling you the station is being monitored 24 hours by CCTV; nobody telling you it is important for your own safety to stand back from the platform edge or that this is a no-smoking station. Above all, no “See it. Say it. Sorted” messages – a form of acoustic torture that is both constant and mindless. The way to make the railways safer is to do what they do in Switzerland: have a guard on every train.
Even high up in the Alps it is still not possible to get away from these kind of mindless mantras because after a week spent at the World Economic Forum it is clear Davos does its own version of see it, say it, sorted.
No question, the people who show up at the World Economic Forum see it. They see inequality is on the rise. They see it is no accident that weather-related incidents are happening a lot more frequently. They see another financial crisis is lurking out there somewhere. They see all that because you don’t have to be all that clever to see these things, and the people who turn up at Davos are not lacking in the brain cell department.
Are they saying it? Yes, some of them are. For several years, Davos has resounded with warnings from important people about the need to take inequality seriously, to take action against global warming before it is too late, to put some serious curbs on the ability of the financial industry to blow up the world.
This year was no exception. Davos started with an award to Sir David Attenborough for his contribution to environmentalism and ended with the 16-year-old Swedish climate change activist Greta Thunberg telling world leaders she wanted them to start panicking about global warming. By the time the WEF annual meeting came to an end, Thunberg was having an audience with Christine Lagarde, the managing director of the International Monetary Fund. Lagarde herself cited an Oxfam report showing that the 26 richest billionaires own the same amount of wealth as half the world’s population.
Other big international organisations are saying it, too. Kristalina Georgieva, the acting head of the World Bank, said climate change was happening much faster than had previously been thought and had to be tackled urgently. “Put a picture of your children and your grandchildren in front of you,” she told the audience at the WEF’s closing session. “I guarantee it works.”
The tumbling price of renewable energy and advances in battery storage means the old argument – that reducing carbon emissions is “bad” for the economy – is no longer heard, at least in public, at Davos. The new mantra is that restricting the increase in temperature to 1.5C above pre-industrial levels would be a win-win – good for the planet and good for the economy.
Even so, there remains a yawning reality gap between what is said and what is actually happening. Many countries, the US and Brazil, for example, are led by climate change sceptics. Companies that pollute do not themselves pay the cost of doing so. Using recycled materials is more costly for a firm than using up primary products. Poverty wages mean it is harder for consumers to shop sustainably even though they might want to.
A serious attempt to reduce inequality would require stronger trade unions with the ability to negotiate higher wages for their members. It would require governments willing to be bolder in taxing the rich. The International Labour Organisation last week called for a universal labour guarantee to safeguard workers’ fundamental rights. There seems little real appetite for a new social contract among CEOs, despite the warm words.
Nor will there be while economics is underpinned by the notion that more is always better, that the overriding goal of policy should be to maximise growth, and that interference in a system where power is skewed towards the rich and powerful should be kept to a minimum. The depressing conclusion from a dinner held in Davos to discuss new thinking in economics is that – with one or two notable exceptions – there has been very little new thinking in economics. A decade after the biggest crisis in living memory and with the clock ticking away on climate change, it’s business as usual.
It took a trio of Yale psychology professors to point out where economics is going wrong: our brains are lying to us. The people who show up at Davos are at the pinnacle of a value system that insists more money equals greater happiness. But as Laurie Santos, one of the Yale academics, said, the things that actually make us happy: being with friends, doing things for others, enjoying our time off work, have very little to do with money. Money only seems to make billionaires happy when they are giving it away.
The conclusions from this should be obvious. Economics in its traditional sense is useless when it comes to addressing the urgent problems that need to be solved. Other disciplines, such as psychology, can actually be more helpful than models based on supposedly rational consumers maximising their utility. And unless we rethink our economic model and retrain our brains, we can see it and we can shout it from mountain tops in Switzerland. But it won’t be sorted.
