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Stakeholder Capitalism Ch.1: Post WO2 growth and decline

In aĀ seriesĀ of blogpost, Iā€™m reflecting on the bookĀ Stakeholder Capitalism, written by Klaus Schwab with Peter Vanham. I wrote on the preface and my approach to this seriesĀ previously.

Growing inequality

The first chapter opens with optimism over all that was achieved during the 75 years after World War II. But the growth is stalling, and inequality is on the rise:

ā€¦ not everyone gets the same chances in life. Those with more money, better connections, or more impressive ZIP codes were affected by COVID at far lower rates; they were more likely to work from home, leave densely populated areas ā€¦

This matches with what happened in my country, Holland, so Iā€™ll give the reader my own reflections on this. TheĀ deplorablesĀ orĀ somewheres, often more sympathetic to the conservative right and Trump, were more heavily affected by the crisis than theĀ anywheresĀ who got their salaries from big companies or the government. Interestingly though, theseĀ deplorablesĀ are first in line to distrust anything connected with the WEF, which is being associated with globalism. Distrust overrides logic.

Understanding such distrust calls for deeper cultural and psychological analysis and (IMHO) more appreciation for traditional communities, but such is outside the scope of the book. Still, the divide betweenĀ rootedĀ somewheres vs.Ā theĀ unrootedĀ anywheres is globally becoming the main political cleavage, so letā€™s see whether the authors are rooted or not.

Is Stakeholder Capitalism only for anywheres?

Klaus recalls his personal history, when in 1945 his country, Germany, lay in ruins. They had toĀ rebuildĀ from ā€œZero Hourā€, which reminds us of the ā€œback build betterā€ slogan. Interestingly, he talks about local companies connected to his local small town, Ravensburg.

The name of that town reminds me of very old roots, even pre-Christian roots, of Europe. The ravens of Wotan are still flying in the myths of this part of the world, scouting for danger and opportunity.

Small and midsized companies and average city dwellers, called theĀ MittelstandĀ (Dutch:Ā Middenstand), would play a critical role in taking new opportunities in the post-war world. A world in which technology and two superpowers would create global opportunities.

A pattern emerges: Klaus isĀ rootedĀ in his history, butĀ unrootedĀ by the war. Both are true. In order to rebuild, theĀ rootedĀ middle-class had to think and act in anĀ uprootedĀ global world. Still, while Klaus talks with CEOs of multinational companies and political leaders in a global setting, he shows concerns for his former home, theĀ Mittelstand, who might become deplorables. The following citation from the book captures the core motivation:

Having worked during more than a year on the shop floor of companies, experiencing real blue-collar work, I have also developed a special respect for the contribution of workers in developing economic wealth. My belief was that business, like other stakeholders in society, had a role to play in creating and sustaining shared prosperit. The best way to do so, I came to think, was for companies to adopt a stakeholder model ā€¦ I decided to turn that idea into action by organizing a management forum [WEF].

This line of thinking shows his roots in Germany, where this is called the Rhineland model. The pattern also holds true for Peter, the co-author. In the previously mentioned interview inĀ BooviĀ (Dutch), Peter tells about his studies and career in New York. He loved to work and live in a globalized world. At the same time, he tells about his pride for Belgium, his home country. While in the US, he often got himself a lunch in Belgian restaurants. Eventually, the raven did fly back, closer to home.

75 years of growth is now ending

The history of the OECD, Marshall plan, EU, and so on is discusses and as those histories are widely known, Iā€™ll skip these. Although first prosperity was for all, later some cracks appeared, and the Club of Rome warned about unsustainable growth. In the 1980s the social contract broke and Friedman-style ā€œmarket fundamentalism and individualismā€ reigned. Deregulation and privatization added to that.

The fall of communism (Soviet Union) came andĀ The end of historyĀ was proclaimed by Francis Fukuyama. Personally, I always regarded that as an idiotic statement. The authors strangely donā€™t mentionĀ The Clash of CivilizationsĀ by Samuel P. Huntington, whose realistic analysis proved to be closer to the events that would follow.

The end of communism brought increased globalization. However, anti-globalization took hold as multinational companies got more control over national economies. In late 2000, the dot-com crash came. I remember that quite well as I was working as a webdeveloper and sysadmin forĀ IntappsĀ (Internet Applications), an English-Dutch enterprise. The dot-com crash didnā€™t slow down the advancement of information technology. A Fourth Industrial Revolution is happening. Such technology will be the subject of chapter 6.

Iā€™m not convinced that the authors have a good grasp on this new technology. In this first chapter, they write:

machine learning ā€“ now dubbed ā€œartificial intelligenceā€

Anyone a little bit acquainted with the history of computer science (CS) knows that artificial intelligence (AI) started off as a subfield of CS, with some input from the cognitive sciences, philosophy of mind, and (yeah) science fiction, somewhere in the 1950s. Machine learning (ML) is just a subfield of AI, a younger phenomenon, and currently the most promising subfield, but that doesnā€™t mean that all AI is now ML.

Yet AI (including ML) could bring changes to workers. The authors cite their Davos declaration. In point 3, I recognize theĀ shepherd principleĀ as I like to call it. Management must serve employees by integrating their interests. Such a position naturally raises questions, as you can see in the screenshot below. Steve Denningā€™s tweet was already shown in the previous post in this series. New is the comment of Richard Straub.

Steve Denning and Richard Straub raising legitimate questions in a tweet.

Source: tweet

In 2007-2008, the banking system broke down. In 2020, public debt is again skyrocketing. The authors cite that ā€œwe use up more than 1.75 times the resources the world can replenishā€. Maybe so. In the next chapter, the issues of the word economy today will be described. My next piece in this review series will reflect on that subject.


If you want to follow my adventure with this book, just follow thisĀ weblogĀ or check myĀ twitterfeedĀ or Facebook timeline with the hashtagĀ #wefbookclubĀ or the mentionĀ @WEFBookClubĀ for the next few weeks. You might also order the book, and maybe even join theĀ WEF Book Club on Facebook, so you can make this a participatory experience for yourself.

Also check theĀ index pageĀ of my review series that I will update as I add blogposts on this subject.


Deze blogpost werd in december 2022 overgezet van WordPress naar een methode gebaseerd op Markdown; het is mogelijk dat hierbij fouten of wijzigingen zijn ontstaan t.o.v. de originele blogpost.