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Jim Wallis, Davos Capitalism, Cronyism, and the ‘New Social Covenant’
Jim Wallis, Davos Capitalism, Cronyism, and the ‘New Social Covenant’
Oct 7, 2024 2:26 AM

Sojourners’ Jim Wallis has been at the Davos gathering in Switzerland and is urging us to be guided by a new Davos “covenant.” If you’ve never heard of Davos, Michael Miller’s RealClear Politics piece “Davos Capitalism” describes the gathering and its unassailable hubris this way:

Davos capitalism, a managerial capitalism run by an enlightened elite–politicians, business leaders, technology gurus, bureaucrats, academics, and celebrities–all gathered together trying to make the economic world smarter or more humane…. And we looked up to Davos Man. Who wouldn’t be impressed by the gatherings at the annual meeting of the World Economic Forum at Davos, a Swiss ski resort? Sharply dressed, eloquent, rich, famous, Republican, Democrat, Tory, Labour, Conservative, Socialist, highly connected, powerful and ever so bright.

Then, when the whole managerial economy collapsed, the managers and technocrats lost faith in markets. But they did not lose faith in themselves, and now they want us to entrust even more of the economy to them.

As if on cue, Jim Wallis writes in a recent public letter:

This week at the World Economic Forum in Davos, Switzerland, we are looking to the future and asking “what now?” At a Saturday session — “The Moral Economy: From Social Contract to Social Covenant” — a document will kick off a year-long global conversation about a new “social covenant” between citizens, governments, and businesses.

Why dispense with the yeomen-like “contract” language in favor of a new “social covenant”? Wallis explains that “in the past 20 years, the world has witnessed the death of social contracts. We have seen a massive breakdown in trust between citizens, their economies, and their governments…. Former assumptions and shared notions about fairness, agreements, reciprocity, mutual benefits, social values, and expected futures have all but disappeared. The collapse of financial systems and the resulting economic crisis not only have caused instability, insecurity, and human pain; they have also generated a growing disbelief and fundamental distrust in the way things operate and how decisions are made.”

Greed and unscrupulousness was part of the mix, of course, but we’ve had these in the mix ever since Adam and Eve took the bite from the forbidden fruit. What we got more and more of in the past few decades is the kind of big, top-down Davos planning that helped precipitate the economic crisis.

During that period, European governments promised ever more lavish union wages, pensions and fringe benefits until many Euro-zone economies began collapsing under the sheer, unsupportable weight of it all.

Meanwhile, in the United States, Washington policy makers were pursuing top-down and Keynesian schemes to spread home ownership to more and more American citizens through bination of government interest-rate manipulation and policies that coerced panies to issue home loans to people with terrible credit records. Together, these policies fueled a housing bubble as people rushed to get loans for homes they couldn’t afford in a “sure fire” housing economy fueled by artificially cheap credit and artificially cheap access to that credit. When the bubble generated by these Davos-style schemes finally burst (as economic bubbles inevitably do), the Davos crowd rushed to blame the free market and now are talking about the need for a new social covenant, which is mostly just more of the same top-down, redistributive “social justice” that hurried us into the present fix.

Certainly there were rich capitalists who behaved badly in the run-up to the economic crisis, and many of them were at meetings like the Davos Forum making sure they were plugged into all of the latest big-government crony capitalist schemes. This “new social covenant” makes an admirable call for greater virtue in public life, but it overlooks the fact that as governments gain greater and greater power to control and regulate the economy–to pick winners and losers–the more fuel there is for corruption as politicians and corporations find all kinds of new opportunities for trading favors.

The Davos statement begins with language it would be difficult for any reasonable person to argue with: “The dignity of the human person,” the mon good,” a “need for stewardship,” a due regard “not just for ourselves, but for posterity.” But when you scratch the surface, you find more of the same calls for top-down, big government redistribution and economic planning.

As a Christian, I find covenant language genuinely appealing. But talking about covenants, dignity, stewardship, mon good and posterity while peddling more of the same centralized, bureaucratic, government-corporate partnerships that led to the mess in the first place is only a recipe for a bigger political and economic mon bad, if you will.

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