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

    Comment number 67.

    In the 1960s they predicted that with machines and computers doing all the work we would be lying in bed late every day before a round of golf and a leisurely evening meal.

    They forgot to mention that capitalism needs vast numbers of poor people to function properly.

  • rate this

    Comment number 66.

    Mr. Gates, how can you say "the world is better off with Capitalism"? Capitalism has failed to eradicate hunger. It puts personal goals above societal goals. With Capitalism, increased productivity doesn't mean an increase in free time. Instead workloads increases. Eradicate hunger and give me more leisure time and I'll gladly stop using Windows 7. Actually, I've been a Mac user for 20+ yrs.

  • rate this

    Comment number 65.

    "The Banking House of Morgan declared that when FDR took the US off the gold standard this action saved the country from complete collapse.With bills now payable in paper money,with more money in circulation,prices and stocks rose.Consumer buying power increased and business prospered. Did FDR save capitalism?

  • rate this

    Comment number 64.

    Well I think, first of all it needs to be analysed and said what went wrong. This has not really happened at all yet, especially here in the UK. The question is: Do people understand the difference between economy and financial engineering? Do people understand now that they are not wealthy when they have lots of debt? Do people realise how much need for change there is?

  • rate this

    Comment number 63.

    Gates would say that! Hardly a surprise that he thinks it’s the best given how crap his product is, if Microsoft is the best we can do then drop the bomb now! Capitalism has had its day, it can go no further, hence why its circular. Now is the time for people of the rest of the world to make choices about their lives and dump the elitist minority version.

  • rate this

    Comment number 62.

    I think I'm going to throw up

  • rate this

    Comment number 61.

    capitalism is a corrupt and despicable system which favours the rich and powerful at the expense of the ordinary person. The filthy rich feed themselves like pigs at the trough, they own the media so that they can misguide a gullible public and they ultimately help themselves to money that doesn't belong to them. Then they get off scott free because they also own mostly corrupt governments

  • rate this

    Comment number 60.

    This sounds like the West doing what it always does best - changing the rules when it doesn't suit them. Eg. invading and exploiting the resources of other nations during the Empire days. Once the wealth of those nations were used to make them first world countries, they "changed". Now, capitalism isn't working for THEM, but not others. Let's change it!

  • rate this

    Comment number 59.

    Could the WEF-partygoers be decent enough to qualify the problems as those of Western capitalism? The developing world is not facing these! The real problems are the structural inequities in the West which politics has tried to cover up with cheap credit for decades. Now that strategy has come back to haunt them. Let the EU practice austerity-it's not going to get better for them. Period!

  • rate this

    Comment number 58.

    The EU says Oil embargo, IMF says a possible 20-30% spike in oil prices.
    Go figure.

  • rate this

    Comment number 57.

    Flora says that sound bites are worse than a waste of time because they stop us exploring complexity. I suppose that's a sound bite in itself - all the same I agree with her.

  • rate this

    Comment number 56.

    Davos, Stavros, 'Loads a money'

  • rate this

    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

    Comment number 54.

    53. yowatusay

    Bill is right, what other system would let someone get a patent on air or water or seeds, and make $millions on it."


    How exactly does one patent water, seeds or air?

    Ooh, I get it! You're being OTT to make a point that actually doesn't exist without you being OTT! Sorry, missed that one.

  • rate this

    Comment number 53.

    Bill is right, what other system would let someone get a patent on air or water or seeds, and make $millions on it.

    And the rest of the world starves if they cannot afford it or they would be a slave to the rich that owns it.

    What a great system to make money and get rich, but not for the poor with no education, skill or trade.

  • rate this

    Comment number 52.

    Capitalism in its true form is the only fair way in which society should survive. Unfortunately people in all walks of life today have no morals business or otherwise. The consequence being that dishonesty rewards. A return to living within the ten commandments would be a good start. No I am not a religious nut.

  • rate this

    Comment number 51.

    World Economic Forum (WEF) ?
    There are times I sit and a premonition hits me that leaves me baffled.

    The latest one is the European Fiscal Problem... you know... where the Greeks are causing EU to stumble.

    Here is my thought...
    If Greece got into such a mess during good times what is investment and return prospects in Greek now it has austere measures to restrain its growth?

    You would lose !!!

  • rate this

    Comment number 50.

    The problem with the current form of capitalism is that too many people are getting money without effort. Manipulation, poitical influence, insider trading and all such methods are the corruption at the heart of capitalism. Perhaps taxing people significantly more on income not generated from actual work in some way might be a way forward.

  • rate this

    Comment number 49.

    So, the people who got us into this mess and profited from it are meeting to decide how WE pay for it and they get even richer? And all against a backdrop of a luxury Swiss resort from which no doubt they can check their Swiss bank accounts. It sure is a mad world ...

  • rate this

    Comment number 48.

    24. The Ace Face

    "A damn sight better than if we laboured (or more likely, forced to labour) under any of the other systems available."

    Capitalism doesn't involve forced work?"


    We both know the difference between working because you need/want money, and being forced to labour on pain of death/torture...


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