Global risks according to Davos

21 January, 2021

The World Economic Forum, better known as the Davos Forum, presented yesterday its Global Risks Report, a two-, five- and ten-year analysis assessing whether present trends will get generalized. The panorama is awful and therefore a true confession of historical and systemic incompetence.

In the immediate term: pandemic and impoverishment

Waiting in the food bank cue. Orcasitas, Madrid.

The table above summarizes the perspectives of the experts in the service of this global lobby and think-tank of financial capital. Two years from now, obviously, the pandemic, and at the same time and afterwards a massive wave of pauperization of workers that it labels as a livelihood crisis and that it characterizes as a:

Structural deterioration of the working age population’s prospects and/or working standards: unemployment, underemployment, lower wages, fragile contracts, erosion of workers’ rights, etc.

It is not without surprise: Davos, champion of the flexibilization of labor markets, that is, of the expansion of the precarization, now sees its immediate and obvious consequence, poverty, as a danger. Its ideological framework has not changed; it never wanted to accept that whatever capital needed to recover from its crises would end up damaging its own market base.

The general impoverishment and persistence of the pandemic slaughter are signs of the growing inability of the ruling class to provide the very basic stuff required by its ideology in order to justify its own existence as a ruling class: it can no longer pretend to magically create wealth and its state can no longer provide the population with vital security.

In five years: signs of structural collapse

Merkel with Peña Nieto in a German AI robotics demonstration at the 2018 Frankfurt fair.

Davos warns, on the horizon of the next five years and accompanying the pandemic and pauperization, of the emergence of signs of structural collapse: financial crises due to the bursting of bubbles and catastrophic failures of basic technological infrastructure.

The bubble at the top of the list of potential candidates is the renewables bubble. The launching of the Green Deal mobilized in 2020, in the middle of a practically universal recession, 500 billion dollars. According to what we have been seeing since January 2021, that figure will be exceeded this year. These enormous masses of capital are being used to implement a technological change that, for the first time in the history of capitalism, will lower productivity in physical terms: these are technologies that can produce less output per working hour than their predecessors. And yet, capital expects -and to a certain extent this is guaranteed by the states, since this is what the Green Deal is all about- a much higher than average return on the investments made to achieve it. If labor produces less per hour and capital claims to earn more per dollar invested, the contradiction can only be resolved by a transfer of income from labor to capital. That is the unconfessed goal. But the result of a reduction in the purchasing power of workers in the medium term is necessarily counterproductive: sales fall and credits become increasingly difficult to pay, profitability expectations of capital become unfeasible … and bubbles burst. New financial crisis.

The other warning is closely related. Artificial Intelligence has been successfully implemented in certain areas, and in a profitable way to the automation of some processes, but all people working with this kind of systems warn about their limitations and about the dead ends they are reaching. In the background, AI takes the empiricist conception hindering the development of knowledge in our historical era to a paroxysm. Furthermore, AI as an application of capital is a bubble in itself. And it is extremely difficult for companies to correct contradictions in their product that are at its very root, especially during the rise of a bubble that has raised billions of dollars. The problem is that more and more critical infrastructure, from new cities to robot hardware and drones depends on IAs. What are they afraid of? That the so-called AI madness that we are now seeing quite frequently in chatbots, online translation services and even games, will produce a series of high cost errors in production chains and public services leading to a rapid devaluation of the companies developing and supplying AI systems.

Both the destructive swings of the financial markets and technological disasters are signs of structural collapse. They show the inability of the ruling class to preserve a system that has long been anti-historical and increasingly confronted with human needs.

In 10 years: expansion of war and collapse of great powers

Greek soldiers in the border with Turkey.

Davos is not blind. In the long term – ten years – it clearly sees the danger of war. It modestly calls it the risk of weapons of mass destruction. But the risk is defined as:

Deployment of biological, chemical, cybernetic, nuclear and radiological weapons, with the resulting loss of life, destruction and/or international crises.

As a definition it is truly nonsense. Weapons of mass destruction are already deployed. One need only review the evolution of the Asian seas in the last year. And that deployment, by itself and without use, does not cause destruction or loss of life. Rather, its use does. That use is called war. And obviously it follows crises, it doesn’t precede them. Crises which on the other hand one finds hard to believe can be optional.

No less voluntarily ambiguous is the state collapse label. We have already seen a few of these in Africa in recent decades: Somalia, Congo, Guinea Bissau… Sudan and Ethiopia are very close to collapse right now. And of course no one can say that Iraq, Libya, and Syria were spared. But in reality the authors of the report are not talking about semicolonial countries. They take this for granted, they are actually talking about regional and even global powers. This becomes clear to us when we go to the appendix in search of the definition:

The collapse of a state with global geopolitical importance as a result of internal conflict, the breakdown of the rule of law, the erosion of institutions, a military coup, or regional and global instability.

The picture is plausible because it is very similar to the one that we have seen spreading throughout these years. Regional wars that escalate, involve global powers, and either end in the collapse of a regional power that relied on militarism to avoid economic collapse, or enter into breakdown as a result. The main difference with what has been experienced so far in the Forum’s warning is that there are not so many states with global geopolitical importance. And almost all of them, if not all, possess or are about to possess nuclear weapons.

That the perspective of Humanity in ten years has as its main risk the development of nuclear wars and the breakdown of global powers, shows to what extent the desperate preservation of the system is associated with the development of barbarity… even among the ruling class itself.

Any surprises?

The Davos Global Risk Report is not surprising because of the threats it warns about. These are the same ones that we detect almost daily in the evolution of the pandemic, the crisis and the imperialist conflicts. Neither is the urgency of the deadlines it claims surprising. All the catastrophes it sees as probable are already manifesting themselves now, although not on the same potential scale it describes. What is striking about the Davos report is that it is a confession. It is also a confession of the inability of the ruling class itself to overcome the contradictions of the system which sustains it. But above all, it is a confession of the impossibility of the system to offer a future to humanity.