Money Makes The World Economic Forum Go Around.

Posted February 1, 2014

by Jerry Alatalo

“There is hardly any inequality among men in the state of nature.”

– Jean Jacques Rousseau (1712-1778)

At the 2014 World Economic Forum there were a number of panels convened to talk about various issues around the world. In this one the topic was “Money and Influence”. One man is a hedge fund manager, another a historian, then two economists. It is an interesting conversation, but somewhat uneventful with respect to specific steps needed to tackle the problem of the topic: money’s influence in politics and society.

It could be said that what has become a widely publicized subject – increasing wealth inequality – is a radical trend that requires radical ideas. American writer and publisher Elbert Hubbard (1856-1915) thought that “an idea that is not dangerous is unworthy to be called an idea at all”. There is a sense during this talk that it has yet to be completely proven that money and influence is a problem at all.

Perhaps because the panel members are reluctant to sound like economics extremists of some kind, the intensity level of the discussion isn’t high enough – given that 85 people own as much wealth as 3.5 billion people on Earth seems to suggest a sense of urgency absent here. At the start of the talk the audience responded to a poll on the question “is democracy being corroded by wealthy individuals and corporations?”

Those who thought so, and voted “yes”, was 64%; those who didn’t think so, and voted “no”, was 36%.

It would seem beneficial to remember that this is the World Economic Forum and not an Occupy Wall Street gathering. The men and women who attended the event in Switzerland are not a group of people who have felt the harsh negative effects of the economic crisis that began in 2008, or earlier, and has continued and is felt by people around the world to this day. So, for this group to vote close to 2/3 in the affirmative in answer to that provocative question is significant.

The woman moderator asked some thoughtful questions. Like: “when inequality rises, can wealth simply “buy” the representation in government they want, the best lawyers and win most of their lawsuits, and the media to get their view and agenda embraced by the people?” The panel members did a good job of answering the questions given the broad quality of the moderator’s suggestions. One person on the panel suggested that wealth inequality leads to political inequality, where the “rules of the game” are set mostly by the present political power, which says that the “rules of the game” will remain until the vicious cycle of wealth and influence is stopped through legal means.

Then voting was the issue. One of the panel pointed out that only 20% of the young people in America voted in 2010, when they are the age group who has the most “skin in the game” compared to elders in their 70’s. The example of Australia was given, a country where voting is mandatory by law. Citizens United was brought up and talked about. But none on the stage suggested a constitutional amendment to overturn the ruling, thereby putting a stop to massive, secretive, campaign spending by the people practicing the game of “money and influence”.

The one fellow suggested that wealth inequality needs to be mitigated, not exacerbated. Another thought that sufficient funding for regulatory agencies and good pay for regulators would be helpful. Another added that a nonpartisan redistricting of congressional districts by a nonpartisan panel would increase democracy, reversing recent years’ practice of rigging elections for either republicans and democrats in a process call “gerrymandering”.

Finally the audience this question from the woman moderator “can democracy defend itself?”

Perhaps the discussion made the men and women in the audience more optimistic – 70% voted “yes” and 30% voted “no”.

It would have been good if the woman moderator forced the idea of solutions – specific solutions. In this regard these men, who have reached a level of ability and success where they received invitations to this thought of as prestigious event of the world’s movers and shakers, were in the same boat as those who attended the rallies during the American Occupy movement. They were in the same boat by failing to offer any specific solutions to problems they believe need addressing.

It is obvious that money has become hugely influential in the world, and that is at all levels of government from city hall to the capitals of nations around the Earth. Wealth inequality can be seen as a pendulum that has swung way, way too far toward money, where a time has arrived that requires dramatic – perhaps radical and dangerous – ideas be brought forth to stop the pendulum so it swings toward the so-called 99%.

It was disappointing to find the lack of solutions offered in this panel. Perhaps one has a naïve understanding of the World Economic Forum that it was convened to specifically offer solutions to problems in this world. Perhaps the people in Davos received invitations to speak because they were the type of people who are ones that will not “rock the boat”. For this reason, it can be assumed that there was a less-than-complete effort put forth by the people at Davos in 2014 to solve problems they were supposedly invited to grapple with.

At risk of sounding like a “radical” with “dangerous ideas”, how about the following proposals? One wonders how the audiences at World Economic Forum 2014 would have voted:

Constitutional amendment to eliminate Citizens United

No taxes until $50,000 in income

Significant, progressive increase in tax rates after $250,000 of income

Consideration of a “maximum wage”

Consideration of a $1 billion maximum wealth

Banishing completely money from campaigns / no political advertising whatsoever

Free, lengthy debate time on the people’s airwaves

Inclusion of all parties in debates

Shutting down all tax schemes and tax havens

Wall Street financial transaction tax

Banning Wall Street transactions that bet on others’ misfortune

Prosecution of all financial crimes with real jail time

Significant reduction of the 57% share of U.S. budget to military

End the Federal Reserve system and replace with a public-owned central banking system

other/any and all measures that swing the pendulum back toward the 99%

Please add any measures you believe would effectively deal with the problems associated with money’s overwhelming and growing influence in the world.

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(Thanks to World Economic Forum @ YouTube)