Klaus Schwab's World Economic Forum in Davos exposed as place where 'cronyism can flourish'
What started in 1971 as an effort to get Europeans to learn from America’s business expertise has morphed into an unaccountable monster that looks more and more like a club for global elites.
There are many organizations in the world where business leaders and governments work closely together. But few are said to be as polarizing as the World Economic Forum and its founder, Klaus Schwab.
On the one hand, almost every January a few thousand leading business executives, politicians, journalists and others flock to the miniscule alpine village of Davos-Klosters, Switzerland, for WEF’s exclusive invitation-only annual meeting. TV, radio and print reporters fawn over the so-called good and the great.
The likes of Jamie Dimon, CEO of JPMorgan Chase, and Microsoft founder Bill Gates, were both there for the event that lasted from Jan. 15-19, and both were seen on TV. On the surface, things might seem benign. But scratch the surface, and you see something quite different.
"What is interesting when you look at how the WEF was started," says Alan Mendoza, executive director of the Henry Jackson Society, a policy think tank in London, England. "It wasn’t random."
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In 1971, with the help of the European Commission (EC), a governmental body, Klaus Schwab, then a business professor at the University of Geneva, founded the European Management Forum and invited 450 business executives to a conference in Davos. The idea was to get European leaders to learn something about how American business works.
"You had institutional backing," Mendoza says. "That then attracts business leaders and then politicians." He also thinks one of the most shocking achievements by Schwab the "scale of what he has achieved."
However, there are worries about the WEF’s future after Schwab, who is 86. So far he hasn’t named a successor and that in turn has the organization’s backers concerned about the future of WEF, according to a 2023 Politico report.
The Politico report cites insiders as saying he’s like a monarch who will stay in the job until death. In a similar way, he also employs family members in high-ranking posts within the not-for-profit organization. The report also states that insiders wouldn’t talk on the record as they feared reprisals such as being banned from WEF events or even being fired just for talking.
Other insiders, both current and former employees, anonymously compare Schwab to Russia’s dictator, according to a Guardian newspaper report last year. "Klaus picks his leaders using the same criteria Putin uses to pick deputies for the state duma: loyalty, guile, sex appeal," the paper quotes one of the sources as saying. Another source in the report called Schwab’s top team "nobodies."
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By 1987, it had morphed into the WEF, and from then, seemingly nothing could stop it. And that’s where critics say the first problem with WEF arrives.
As the WEF has grown in popularity, they say it looks more and more like an exclusive networking club for the mega-rich and super-powerful. "It is nothing more than an official mechanism by which cronyism can flourish," says Ben Habib, co-deputy leader of British political party Reform UK. "The event legitimizes cronyism."
Others who have attended Davos, as the annual event is known, see it as a competitive event where the guests play a game of high-stakes social climbing where the winners get cushy high-paid jobs at the top of massive multinational corporations.
Facebook and Blackrock are examples of where former U.K. government ministers have taken on senior roles. Nick Clegg, former leader of Britain’s center left Lib-Dems, is now the president of global affairs at Meta. Similarly, for a while, George Osbourne, former chancellor of the exchequer (finance chief) for the U.K. government, took a role as a senior adviser to the giant U.S.-based fund management company Black Rock.
Habib says it’s no wonder big business and top politicians are deeply in bed with each other. And it is viewed by many as a powerful yet unaccountable organization that doesn’t reflect the needs or wants of all society. Instead, it has an invitation-only policy to the annual event.
Indeed, WEF has the following statement on its website: "Our activities are shaped by a unique institutional culture founded on the stakeholder theory, which asserts that an organization is accountable to all parts of society."
The WEF didn’t immediately respond to a request for comment on the seeming discrepancy between its statement about serving everyone and having an invite-only policy.
"The little guy is not represented anywhere in these major international forums," Mendoza says. The issue with WEF is its huge scale, he says. "If we have problems with [the little guy being silent], it is not a WEF problem, it's a broader capitalism issue."
Another issue that has irked its critics revolves around demands at past WEF events calling for a greener global economy and the idea of reducing the world's use of carbon-based energy. That contrasts with the 1,000 private jets that reportedly ferried in the big shots this year for the annual meeting, which ended Jan. 19. Those private jets emit 10 times more carbon than commercial jetliners and 50 times more than trains.
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Mendoza notes that while a couple of decades ago the secretive Bilderberg Group had been the focal point of conspiracy theorists, now WEF has become a lightning rod for similar ideas. Habib concurs, stating, "There are many people who think Schwab controls the world. I’m not one of them." But he doesn’t like the people who Schwab hangs out with. "He has embedded himself with the ‘great and good,’ but they ain’t so great and ain’t so good."
Observers say a turning point was in 2021 after the previous year’s COVID-19 pandemic. It was then that the idea of "the Great Reset" took off. "The pandemic represents a rare but narrow window of opportunity to reflect, reimagine, and reset our world to create a healthier, more equitable, and more prosperous future," Schwab said. And he spoke about wealth taxes.
Instead of something new and better happening in the economy, something as old as the hills manifested; The richest people got even richer, and the poor got poorer. Earlier this month, Forbes magazine found that the top five wealthiest people in the world had collectively more than doubled their wealth. These include investing guru Warren Buffett and Amazon founder Jeff Bezos.
Meanwhile, U.K.-based charity Oxfam says five billion people got poorer over the same period, primarily due to surging inflation and war.
The WEF didn’t respond immediately to Fox News Digital's request for comment on the huge global wealth shift.
Mendoza wonders why WEF doesn't fight back on its poor public image. "You have to ask, is there any sense that it continues with this negative image?" he says. "I am not sure it is a sensible place for anyone to want to be."