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The Fortunes of Others
Don't let the cynics fool you; Davos is not just a talking shop. I think you can make a strong case that without the WEF, the principles of corporate social responsibility, and the very idea that corporations have a moral responsibility to do more than maximize shareholder value, would be nowhere near as prominent as they are. Global corporate citizenship is at the heart of Schwab's vision of the world (his own foundation supports social entrepreneurs), and over the years there must have been hundreds of corporate executives who have come away from Davos inspired with plans for broadening their contribution to society.
So it made sense that Davos should be the location for a major speech by Bill Gates on (no false modesty here) a new approach to capitalism in the 21st century. This Davos forum, Gates said, was the last he would attend as a full-time employee of Microsoft (starting this summer, he will devote himself to the Bill & Melinda Gates Foundation), and he used the opportunity to challenge other business leaders to rethink the way they see the world. At the heart of Gates' analysis was his sense of a partial failure of the market. "Capitalism," Gates argued, "harnesses self-interest in a helpful and sustainable way, but only on behalf of those who can pay." Gates cited Adam Smith — the Smith of The Theory of Moral Sentiments rather than The Wealth of Nations — quoting from him to remind the audience that "How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him." A new creative capitalism, Gates said, would take "this interest in the fortunes of others and tie it to our interest in our own fortunes in ways that help advance both." Or, to put it more pithily, he made the case for doing well by doing good.
Where Gates encouraged one generation of business leaders to broaden their horizons (it was at Davos, in 2000, that he promised the Global Fund for Children's Vaccines $750 million, a gift that has saved countless lives), the two founders of Google are the inspirations for the next. These guys think big. At an off-campus session on climate change and the plans for their own foundation, which, among other things, aims to develop cheap sources of renewable energy, Larry Page made a simple but far-reaching point. The necessity for policies to combat climate change, he argued, does not mean that energy is bad; it means, rather, that we should seek to harness technology to provide energy that is clean, cheap and ubiquitous. There's a challenge for socially conscious entrepreneurs.
Page's point is an important one. At a session earlier the same morning, Al Gore and Bono had debated climate change and poverty reduction. Naturally, they both wanted to argue that the two were never in conflict — that global warming will disproportionately impact the poor, and hence that to tackle climate change is to help those most in need. Still, there are tensions between the two objectives. Turning land previously used to grow food crops into farms devoted to producing ethanol pushes up the price of food. And Bono gently reminded Gore that to demonize air travel — as some European greens do — does Africa no good. In many African countries, tourism from the rich world is an economic driver; in others, it is a vital way to get crops to market. But throw Page's argument for cheap and clean energy into the mix, and you can end up thinking that it is possible to both combat climate change and at the same time use technology to better the life chances of the poor.
Davos is full of moments like that, which is one reason so many keep going back. For more than 10 years, I've read that the annual meeting of the WEF is past its best, that its glory days are over. But that's like a Manchester United fan saying that today's team, with Cristiano Ronaldo and Wayne Rooney, couldn't hold a candle to the one with Denis Law and George Best 40 years ago. It doesn't make sense. "Look," said my friend the British writer Grenville Byford, when the whole thing was done. "You've got 2,000 of the smartest people in the world together in one small town for a week. If you can't enjoy that, you're nuts."