Davos 2012: Capitalism debate sets WEF agenda

 
World Economic Forum logo This year's World Economic Forum in Davos takes place amid a gloomy economy

This year's World Economic Forum (WEF) has kicked off with a debate on capitalism, which Bill Gates labelled a "phenomenal system".

"We're going through a tough period, but there is no other system that has improved humanity," the Microsoft founder told the BBC.

The future of the world economy is high on the agenda as some of world's most powerful people gather in Davos.

They meet annually in the Swiss resort to discuss the state of the world.

The WEF comes amid sluggish growth in the West versus soaring growth rates in emerging economies such as China and Brazil, and uprisings and protests across the globe.

The eurozone debt crisis also continues to disturb financial markets.

Before Davos, WEF founder Klaus Schwab had said: "Capitalism in its current form no longer fits the world around us."

Speaking in London ahead of his arrival in Davos, Mr Gates told BBC Radio 4's Today programme that "the world is better off" because of capitalism.

"I think capitalism is a phenomenal system because it has generated so much innovation - the chance I had as a young boy to start Microsoft, hire my friends," he said.

"Other systems don't allow that to happen."

First debate

It was fitting that these concerns of the future of the world economy were reflected in the opening debate: "Is 20th-century capitalism failing 21st-century society?"

Start Quote

Has capitalism got a future? Is it fit for the 21st Century? And if it has and is, how must capitalism change?”

End Quote

Referencing Winston Churchill, one of the panellists, David Rubenstein, co-founder of the private equity Carlyle Group, said: "Capitalism may be the worst form of systems, except for every other system."

The chief of the International Trade Union Confederation disagreed. Sharan Burrow said "we've lost a moral compass" and warned of social unrest.

She called for companies globally to invest 2-3% of real investment in the creation of jobs, or what she termed the "productive economy".

A distinction was also made between the economies of the US and Europe - dubbed "laissez-faire capitalism" - and state capitalism, where the governments of nations such as China and Russia take a big role in creating jobs.

Later, amid the heaviest snow in Davos in 66 years, German Chancellor Angela Merkel will provide the keynote address that will officially begin the WEF, scheduled for 16:30 BST.

 

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  • rate this
    +1

    Comment number 55.

    Capitalism as is usually practised is failing the many & favours the few. It won't change until we the consumers organise & rally against what is being done to us in the name of profit. Humanity is overlooked for the sake of obtaining more & more money. I'm sick of feeling so powerless in the face of vested interests & I sincerely want change & I want my representatives to carry that message!

  • rate this
    +3

    Comment number 34.

    Capitalism is an unsustainable system that relies on the poor - it’s like fossil fuels – the day will come when the planet runs out of the raw material. With capitalism the system crumbles when the supply of really poor people who can be exploited by the rich dries up. That is the process we are going through now.

  • rate this
    +8

    Comment number 13.

    I believe free trade is generally a good thing, built up over the millennia & embedded in human nature.

    However, in modern times what we have is not free trade but monopolisation where the small guy effectively gets swallowed up & spat out.

    The big corporates have too much political power with politicians all on their gravy train payroll.

    This is not good for society & needs to be challenged.

  • rate this
    -1

    Comment number 10.

    Capitalism encourages & rewards individual ability risk taking & hard work, This is something other systems can only emulate through co-ercion

    Were capitalism has gone wrong is that some people (bankers) have been rewarded when they effectively took no risks resulting in unnecessary risk & social loss

    Solution, make sure all the risk is borne by the inviduals & companies who stand to gain

  • rate this
    -2

    Comment number 8.

    The dictionary definition of Capitalism totally misses the root cause of Capitalism, which is the recognition and protection of the "individual rights" to life, liberty, property and the pursuit of happiness. Any society which does not recognise and protect those rights is inherently NOT Capitalist. No society has ever truly recognised and protected those rights, but America came the closest.

 
 

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